Canada Goose Earnings: One Big Key to Watch For
Canada Goose reports earnings Wednesday, and one of the biggest keys investors want to see encouraging signs on is the company's direct-to-consumer e-commerce initiative.
Canada Goose will report earnings before the market opens, and analysts polled by FactSet are looking for earnings of 4 cents per share, compared to last year's March quarter, which saw EPS of 64 cents.
Revenue is expected to come in at $118.9 million, compared to last year's $448.1 million.
But "Canada Goose -- they're shifting from being wholesale, that is, they're selling to the department stores to begin to do more in e-commerce and some of their own stores," John Morris senior brand apparel retail analyst at D.A.
Davidson & Co.
"They will probably continue to grow that business fairly significantly.
Wholesale will continue to come down.
As that happens, whether it's in store or online, that'll lift the margin for Canada Goose." Morris added, "As it does rise, that also contributes to a greater degree of margin expansion." Investors want to see the higher margin direct-to-consumer business scale as quickly as possible, and details of that initiative are sure to be revealed on the earnings call.
Goose's latest earnings report showed that the DTC operating margin was 60% for the quarter, while the company's overall operating margin was 35%.
This means that if Goose is able to continue expanding its DTC division faster than the overall company's business, operating profit and earnings should improve as well.
Meanwhile, Lulu Lemon reports earnings May 30.
Morris noted Lulu is further ahead in digital initiatives than Goose is.