Company News

CORRECTED-UPDATE 2-Canada Goose profit tops estimates as ecommerce, store investments pay off

(Corrects last paragraph to say company’s debut was in 2017, not 2016)

Feb 8 (Reuters) - Canada Goose Holdings Inc on Thursday posted a 61 percent jump in quarterly profit that beat analysts’ estimates, benefiting from a plan to invest more in ecommerce and company-owned stores.

The luxury clothes company, known for its winter coats, has historically sold its products through wholesalers. It started opening its own shops in 2016, banking on its luxury tag, at a time when other retailers were fighting off falling sales and shrinking margins.

The company said its net income rose to C$62.9 million or 56 Canadian cents per share in the three months ended Dec. 31, from C$39.1 million or 38 Canadian cents per share, a year earlier.

On an adjusted basis, it earned 58 Canadian cents on the share, beating estimates of 48 Canadian cents, as per Thomson Reuters I/B/E/S.

“In our peak selling season, we delivered strong performance across geographies, channels and categories this quarter,” Chief Executive Officer Dani Reiss said in a statement.

Margins from stores and online sales were at 76.4 percent during the quarter, compared with gross margins of 51 percent from its wholesale channel.

Revenue rose 21 percent to C$265.8 million. Revenue from selling directly to customers rose almost 83 percent to C$131.6 million, driven by new company-owned stores and ecommerce sites.

The company, which sells parkas for $900, has said it expects to open up to 20 brick-and-mortar stores around the world by 2020. It has already opened stores in Toronto, New York, Chicago and London since 2016. The company also operates 11 online stores across North America and Europe.

“Year to date, we added e-commerce sites in seven new markets, opened five new stores across three continents,” Reiss said.

Shares of the company, which made their market debut in 2017, have risen more than 100 percent so far to date. They closed at C$47.83 on Wednesday. (Reporting by Nivedita Bhattacharjee,; Editing by Sai Sachin Ravikumar, Bernard Orr)