Canada Goose Holdings Inc. reported its global e-commerce revenue increased by 80.8 percent in the first quarter ended 27th June, 2021.
“Canada Goose is off to a great start in the first quarter. Our digital business continued at a rapid pace of growth globally, alongside improving retail trends. With strong momentum in a less disrupted operating environment, and an exciting product pipeline – including our growing apparel business and footwear launch later this fall – we are well positioned for fiscal 2022,” said Dani Reiss, President & CEO.
The Group announced global e-Commerce revenue increased by 80.8 percent. Revenue increased significantly in all geographic regions. Despite elevated retail closures, Canada grew by 126.1 percent, excluding US$7.0 million of temporary PPE sales in the comparative quarter. DTC revenue in Mainland China increased by 188.7 percent.
Total revenue was US$56.3 million from US$26.1 million. DTC revenue was US$29.4 million from US$10.4 million. The increase was driven by a lower level of COVID-19 disruptions, e-Commerce growth and new retail expansion, despite continued store traffic headwinds. Across our global store network, approximately 20 percent of total trading days were lost to temporary closures.
Wholesale revenue was US$25.8 million from US$8.7 million. The increase was a result of higher volume of shipments to wholesale and international distributor partners, driven by a lower level of COVID-19 disruptions.
Other revenue was US$1.1 million from US$7.0 million. The decrease was attributable to PPE sales in the comparative quarter, which were temporarily manufactured in support of COVID-19 response efforts.
Gross profit was US$30.7 million, a gross margin of 54.5 percent, compared to US$4.8 million and 18.4 percent.
DTC gross margin of 72.8 percent, compared to 66.3 percent (normalized from 82.7 percent as reported, adjusted for the impact of a US$1.7 million duty recovery related to shipments to Asia in the comparative quarter, which did not reoccur). The increase was driven by the favourable benefit of higher sales volumes from retail stores of US$17.5 million (+530 bps) and lower inventory provisions of US$0.2m (+70 bps).
Wholesale gross margin of 35.3 percent, compared to 17.2 percent. The increase was driven by the favourable impact of a higher proportion of sales to our wholesale partners compared to international distributors of US$10.6 million (+1,470 bps).
Other segment gross profit was US$0.2m from a gross loss of US$(5.3) million. Operating loss was US$(60.7) million compared to US$(59.3) million.
DTC operating loss of US$(9.1) million, compared to US$(12.2) million. The decrease in operating loss was attributable to a lower level of COVID-19 disruptions and the positive impact of e-Commerce growth.
Wholesale operating income of US$0.2 million, compared to operating loss of US$(7.2) million. The increase in operating income was attributable to a higher segment revenue and gross profit.
Other operating loss was US$(51.8) million from US$(39.9) million. The increase in operating loss was attributable to US$3.6 million of incremental investment in marketing and strategic initiatives, US$3.1 million of higher performance-based compensation, and US$3.7 million of unfavourable foreign exchange fluctuations.
Net loss was US$(56.7) million, or US$(0.51) per diluted share, compared to US$(50.1) million, or US$(0.46) per diluted share.
Non-IFRS adjusted EBITwas US$(60.2) million, compared to US$(46.5) million. Non-IFRS adjusted net loss was US$(50.0) million, or US$(0.45) per diluted share, compared to US$(38.4) million, or US$(0.35) per diluted share.
Cash was US$305.9 million as at quarter end, compared to US$160.1 million, alongside US$313.7 million of available borrowing capacity in the undrawn revolving facility.
Inventory was US$404.5 million as at quarter end, compared to US$428.6 million. The decrease was attributable to a reduction in finished goods of US$22.4 million, supported by sales growth and reduced production in fiscal 2021.
The Company reiterates the fiscal 2022 outlook which was issued on 13th May, 2021, in the press release announcing results for fiscal 2021, on the basis of a gradual and progressive improvement in the COVID-19 landscape.
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For the second quarter of fiscal 2022, this outlook assumes low double digit Wholesale revenue growth, and DTC revenue at roughly one and a half times last year’s level. Within the meaning of applicable securities laws, this outlook constitutes forward looking information and financial outlook. Actual results could vary materially as a result of numerous factors, many of which are beyond the Company’s control. This includes risks and uncertainties relating to retail closures and disruptions to retail traffic as a result of COVID-19.