Canada Goose Q2 Adj. EPS C$0.57 Up From C$0.46 YoY, Sales C$294M Up From C$230M YoY

Second Quarter Fiscal 2020 Results (Compared to Second Quarter Fiscal 2019): Total revenue increased by 27.7% to $294.0m from $230.3m, or 28.3% on a constant currency basis(1). DTC revenue increased to $74.2m from

Benzinga · 11/13/2019 11:46

Second Quarter Fiscal 2020 Results (Compared to Second Quarter Fiscal 2019):

  • Total revenue increased by 27.7% to $294.0m from $230.3m, or 28.3% on a constant currency basis(1).
    • DTC revenue increased to $74.2m from $50.4m, driven by incremental revenue from new retail stores.
    • Wholesale revenue increased to $219.8m from $179.9m. The increase was driven by higher order values from existing partners, complemented by customer requests for earlier shipment timing relative to last year. It also reflects incremental revenue from Baffin in its peak quarter, which was acquired in November 2018.
  • Gross profit was $160.4m, a gross margin of 54.6%. The increase of $31.9m in gross profit was driven by revenue growth in both channels.
    • DTC gross profit was $56.1m, a gross margin of 75.6%. The 40 bps increase in gross margin reflects the net positive impact of pricing relative to costs.
    • Wholesale gross profit was $104.3m, a gross margin of 47.5%. The 290 bps decrease in gross margin reflects a normalization relative to the second quarter of fiscal 2019, which was elevated due to the timing of production efficiencies and reductions in import duties on goods sold in Europe.
  • Operating income was $75.4m. The increase of $10.4m in operating income was driven by revenue growth in both channels.
    • DTC operating income was $30.0m, an operating margin of 40.4%. The impact of strong sales productivity and profitability across all components of the channel was partially offset by the costs of a larger store opening program relative to last year. Pre-store opening costs of $3.6m were incurred for locations not yet open. Excluding pre-store opening costs in both periods, DTC operating margin increased to 45.3% in fiscal 2020 from 43.7% in fiscal 2019.
    • Wholesale operating income was $90.9m, an operating margin of 41.4%. With the decrease in channel gross margin described above, the increase in operating income was driven by revenue growth.
  • Unallocated corporate expenses were $43.2m, compared to $34.2m. The increase was primarily attributable to investments to support growth in marketing, people, technology and expansion in Greater China.
  • Unallocated depreciation and amortization expenses were $2.3m, compared to $1.8m.
  • Net income was $60.6m, or $0.55 per diluted share, compared to $49.9m, or $0.45 per diluted share.
  • Adjusted EBIT(1) was $79.2m, compared to $66.5m.
  • Adjusted net income(1) was $63.6m, or $0.57 per diluted share, compared to adjusted net income(1) of $51.1m, or $0.46 per diluted share