Canada Goose (GOOS +10%) hit a new all-time high today after the company reported its third consecutive better-than-expected quarter since going public in March.
Canada Goose sells high-end, high-quality outerwear. It has solidified itself as the premier growth story in the retail sector.
Second quarter adjusted EPS rose 26% to CAD$0.29; adjusted EBITDA rose 37% to CAD$46 million; gross profit rose 47% to CAD$87 million, while revenue was up 35% to CAD$172 million. Wholesale revenue was up 24% to ~$152.1 million and direct-to-consumer revenue was up 270% to $20.3 million, driven by strong growth in North American e-commerce. The gross profit margin expanded an impressive 410 basis points to 50.5%.
For fiscal 2018 (ending March), Canada Goose raised adjusted EPS guidance to at least 35% growth from 20% and raised revenue guidance to at least 25% growth from the mid-to-high teens range.
"Our performance reflects the power of our brand around the world and our disciplined approach to executing our growth strategies. We have opened e-commerce sites in all seven of the new markets planned for fiscal 2018 and we remain on-track to have seven world-class retail destinations in operation in the third quarter of fiscal 2018, including our recently opened stores in Chicago and Tokyo. I am also encouraged by the response to our first knitwear collection which embodies our function-first design philosophy and stays true to our authentic utilitarian aesthetic," stated Dani Reiss, President & Chief Executive Officer.
In a world where retailers are struggling with declining traffic, Canada Goose is a scarce growth opportunity in the sector, so the stock trades at a hefty premium.
Canada Goose has a ~CAD$3 billion valuation and trades north of 50x adjusted earnings estimates, more expensive than any other publicly traded luxury brand.