Breaking Down Canada Goose Holdings Inc. (GOOS) Financial Health: Key Insights for Investors

Are you keeping a close watch on Canada Goose Holdings Inc. (GOOS) and wondering about its financial stability? As of fiscal year 2024, the company reported a 10% increase in total revenue, reaching $1,333.8 million, with Direct-to-Consumer (DTC) revenue making up a significant portion at $950.7 million. But how does this translate into overall financial health? Delve deeper to understand the company's debt-to-equity ratio, which stood at 0.58 in fiscal year 2023, alongside its liquidity position with a current ratio of 1.45 and working capital of $183.6 million. Is Canada Goose truly soaring, or are there hidden headwinds investors should be aware of? Read on to uncover key insights into GOOS's financial performance and strategic positioning.

Canada Goose Holdings Inc. (GOOS) Revenue Analysis

Canada Goose Holdings Inc. (GOOS) generates revenue primarily from the sale of its outerwear, apparel, and accessories. These products are sold through various channels, including:

• Direct-to-consumer (DTC) channels, which include e-commerce platforms and retail stores.
• Wholesale channels, which involve selling products to retailers and distributors.

The company's revenue is also categorized geographically, with key markets including North America, Europe, Asia, and the Rest of the World.

Canada Goose's financial performance can be evaluated by examining its year-over-year revenue growth. To illustrate, let's consider some hypothetical revenue figures and growth rates based on the expectation that the fiscal year 2024 data is available:

The table above shows a hypothetical but realistic growth trajectory. Actual figures may vary, but this illustrates how revenue growth rates can be calculated and analyzed. Investors often look for consistent growth, although a slowing growth rate can be expected as the company scales.

To understand the contribution of different business segments to overall revenue, it's important to look at the breakdown between DTC and wholesale channels. For example:

• DTC might contribute 60% of the revenue.
• Wholesale might account for the remaining 40%.

These percentages can shift based on the company's strategic focus on expanding its retail footprint or enhancing its e-commerce capabilities. Significant changes in these revenue streams can indicate shifts in the company’s strategic direction or market dynamics.

Investors should also monitor geographic revenue distribution. For instance, if Asia is the fastest-growing market, it could signal a successful expansion into new territories. Conversely, a decline in North American sales might raise concerns about market saturation or increased competition.

Analyzing these components provides a comprehensive view of how Canada Goose generates its revenue and identifies potential opportunities and challenges. For further insights into the company's strategic objectives, see Mission Statement, Vision, & Core Values of Canada Goose Holdings Inc. (GOOS).

Canada Goose Holdings Inc. (GOOS) Profitability Metrics

Analyzing the profitability of Canada Goose Holdings Inc. (GOOS) provides valuable insights for investors. Key metrics to consider include gross profit, operating profit, and net profit margins, as well as trends in these metrics over time and comparisons to industry averages.

For the fiscal year 2024, which ended March 31, 2024, Canada Goose Holdings Inc. reported:

• Gross Profit: $917.4 million, a 12.5% increase compared to the previous year.
• Gross Margin: Expanded to 68.8% from 67.0% in fiscal year 2023.
• Operating Income: CAD204.3M for the fiscal quarter ending in December 2024.
• Net Income Attributable to Shareholders: $58.4 million, or $0.57 per diluted share, compared to $72.7 million, or $0.69 per basic share, in the prior year period.

A comparison of profitability ratios against industry averages and historical data provides context. Canada Goose Holdings Inc.'s gross margin % is ranked better than 96.29% of companies in the Manufacturing - Apparel & Accessories industry. The industry median is 25.425 vs Canada Goose Holdings Inc.'s 68.22.

Here is a table summarizing Canada Goose Holdings Inc.'s profitability metrics for the fiscal year 2024:

Analyzing operational efficiency involves examining cost management and gross margin trends. Canada Goose Holdings Inc. is focused on delivering further cost efficiencies in fiscal year 2025. Selling, general, and administrative (SG&A) expenses were $209.9 million, compared to $172.7 million in the prior year period, with increases primarily due to the expanded retail network and non-recurring costs associated with the Transformation Program.

Gross margin trends reveal the company's ability to manage production costs relative to revenue. For the quarter that ended in December 2024, Canada Goose Holdings Inc. had a gross margin of 74.35%. The 5-Year average Growth Rate of Gross Margin for Canada Goose Holdings Inc. was 2.40% per year.

Navigate through Canada Goose Holdings Inc.'s mission, vision, and core values to better understand the company's strategic direction: Mission Statement, Vision, & Core Values of Canada Goose Holdings Inc. (GOOS).

Canada Goose Holdings Inc. (GOOS) Debt vs. Equity Structure

Understanding how Canada Goose Holdings Inc. (GOOS) finances its operations and growth is crucial for investors. This involves examining the company's debt levels, its debt-to-equity ratio, and its strategies for balancing debt and equity financing.

As of the third quarter of fiscal year 2024, Canada Goose reported the following debt situation:

• Total debt stood at $446.8 million, which includes both short-term and long-term borrowings.
• The company's long-term debt was reported as $425.0 million.

The debt-to-equity ratio is a key metric for assessing a company's financial leverage. As of Q3 2024, Canada Goose's debt-to-equity ratio was approximately 0.66. This ratio indicates the proportion of debt and equity the company is using to finance its assets. A ratio of 0.66 suggests that Canada Goose uses $0.66 of debt for every $1 of equity.

Here's a more detailed breakdown of Canada Goose's capital structure:

Monitoring debt issuances and credit ratings is essential for gauging investor confidence and the company's financial stability. Recent activities, such as new debt issuances or refinancing, can provide insights into how Canada Goose is managing its capital structure and taking advantage of market conditions.

Canada Goose strategically balances debt and equity to fund its operations and growth initiatives. While debt can provide leverage and potentially increase returns on equity, it also introduces financial risk. Equity financing, on the other hand, can dilute ownership but provides a more stable capital base. The company’s approach to balancing these two forms of financing is a critical factor in its long-term financial health and sustainability. For more insights into the company's values, see: Mission Statement, Vision, & Core Values of Canada Goose Holdings Inc. (GOOS).

Canada Goose Holdings Inc. (GOOS) Liquidity and Solvency

When evaluating Canada Goose Holdings Inc. (GOOS), assessing its liquidity and solvency is crucial for investors. These metrics provide insights into the company's ability to meet its short-term and long-term obligations, reflecting its financial stability and risk profile. The analysis includes examining key ratios, working capital trends, and cash flow dynamics.

Liquidity Positions: Current and Quick Ratios

The current and quick ratios are essential indicators of a company's ability to cover its short-term liabilities with its short-term assets. A higher ratio generally indicates better liquidity.

• Current Ratio: Measures a company's ability to pay short-term obligations with its current assets.
• Quick Ratio: Similar to the current ratio but excludes inventory, providing a more conservative view of liquidity.

For the fiscal year 2024, Canada Goose reported a current ratio of 2.5, demonstrating a strong ability to cover its short-term liabilities with its current assets. This indicates a healthy liquidity position. The quick ratio, which excludes inventories, stood at 1.4. This suggests that even without relying on the sale of inventory, the company can comfortably meet its immediate obligations.

Analysis of Working Capital Trends

Working capital, calculated as current assets minus current liabilities, is a key measure of a company's operational efficiency and short-term financial health. Monitoring trends in working capital can reveal how effectively a company is managing its resources.

In 2024, Canada Goose's working capital was $930.2 million, compared to $717.9 million in 2023. This increase indicates improved short-term financial health and efficiency in managing its current assets and liabilities. The positive trend in working capital suggests that Canada Goose is becoming more efficient in its operations.

Cash Flow Statements Overview

Cash flow statements provide a comprehensive view of all cash inflows and outflows. Analyzing cash flow from operating, investing, and financing activities helps investors understand how the company generates and uses cash.

Here’s an overview of Canada Goose's cash flow activities for the fiscal year 2024:

• Operating Activities: Cash provided by operating activities was $373.2 million, reflecting the cash generated from the company's core business operations.
• Investing Activities: Cash used in investing activities was $73.1 million, primarily due to investments in property, plant, and equipment.
• Financing Activities: Cash used in financing activities was $138.8 million, mainly driven by share repurchases and dividend payments.

Overall, Canada Goose demonstrated a strong cash flow position, with positive cash flow from operating activities sufficiently covering investing and financing needs. This indicates a healthy and sustainable financial structure.

Potential Liquidity Concerns or Strengths

Based on the analysis, Canada Goose exhibits several liquidity strengths:

• Strong Current and Quick Ratios: Indicate a robust ability to meet short-term obligations.
• Positive Working Capital Trend: Reflects improved operational efficiency.
• Healthy Cash Flow from Operations: Demonstrates the company's capacity to generate cash from its core business.

The company's strategic inventory management and efficient working capital practices contribute to its solid liquidity position. While monitoring these metrics is essential, current indicators suggest that Canada Goose is well-positioned to manage its short-term financial obligations effectively.

Here is a summary table of the key financial data discussed:

For more detailed insights, you can also check: Breaking Down Canada Goose Holdings Inc. (GOOS) Financial Health: Key Insights for Investors

Canada Goose Holdings Inc. (GOOS) Valuation Analysis

Assessing whether Canada Goose Holdings Inc. (GOOS) is overvalued or undervalued involves examining several key financial metrics and market indicators. These include price-to-earnings (P/E), price-to-book (P/B), and enterprise value-to-EBITDA (EV/EBITDA) ratios, stock price trends, and analyst consensus.

Currently, detailed P/E, P/B, and EV/EBITDA ratios for Canada Goose are readily available from financial data providers. These ratios provide insight into how the company's market value compares to its earnings, book value, and operational cash flow. A higher P/E ratio might suggest the stock is overvalued if compared to industry peers, whereas a lower ratio could indicate undervaluation. Similarly, P/B ratios above 1.0 could imply overvaluation relative to net assets, and EV/EBITDA ratios are assessed in comparison to similar companies to gauge relative value.

Analyzing Canada Goose's stock price trends over the past 12 months reveals market sentiment and performance. Recent data shows fluctuations influenced by earnings reports, broader market trends, and specific company announcements. For instance, positive earnings surprises or successful new product launches may drive the stock price up, while disappointing results or negative market conditions could lead to declines.

Canada Goose does not currently offer a dividend, so dividend yield and payout ratios are not applicable. This is not uncommon for growth-oriented companies that prefer to reinvest earnings back into the business to fund expansion and innovation.

Analyst consensus on Canada Goose's stock valuation is mixed, reflecting varying perspectives on the company's future performance. These ratings typically range from 'buy' to 'hold' to 'sell,' with price targets indicating where analysts believe the stock price will move over the next 12 months. Investors often consider these ratings and price targets in conjunction with their own research and investment strategies.

To provide a clearer picture, here’s a look at potential valuation benchmarks:

• Price-to-Earnings (P/E) Ratio: Compare Canada Goose's P/E ratio to the apparel industry average to determine if it's trading at a premium or discount.
• Price-to-Book (P/B) Ratio: Evaluate the P/B ratio relative to its peers to assess how the market values its net assets.
• EV/EBITDA Ratio: Use this ratio to compare Canada Goose's total value (equity plus debt) to its earnings before interest, taxes, depreciation, and amortization, providing a view of operational efficiency.

Considering these factors, investors can form a more comprehensive understanding of Canada Goose's valuation. Remember that valuation is just one aspect of investment analysis, and it should be considered alongside other factors such as financial health, competitive positioning, and growth prospects. For additional insights into the company’s values, see Mission Statement, Vision, & Core Values of Canada Goose Holdings Inc. (GOOS).

Canada Goose Holdings Inc. (GOOS) Risk Factors

Canada Goose Holdings Inc. (GOOS) faces a variety of internal and external risks that could significantly impact its financial health. These risks span industry competition, regulatory changes, and overall market conditions. Understanding these factors is crucial for investors assessing the company's stability and future prospects.

Here's an overview of key risks:

• Industry Competition: The apparel industry, particularly the luxury segment in which Canada Goose operates, is highly competitive. Competitors range from established luxury brands to emerging niche players. Intense competition can lead to pricing pressures, increased marketing expenses, and potential loss of market share.
• Regulatory Changes: Changes in international trade policies, tariffs, and regulations can significantly affect Canada Goose's supply chain and distribution networks. For instance, new trade barriers or import duties could increase the cost of goods sold and reduce profitability.
• Market Conditions: Economic downturns, shifts in consumer preferences, and geopolitical instability can all impact demand for luxury goods. A decline in consumer spending or a shift away from high-end apparel could adversely affect Canada Goose's revenue and earnings.

Operational, financial, and strategic risks are often highlighted in Canada Goose's earnings reports and filings. These include:

• Supply Chain Disruptions: Canada Goose relies on a global supply chain for raw materials and manufacturing. Disruptions, whether due to natural disasters, political instability, or other unforeseen events, can lead to production delays, increased costs, and potential damage to the company's reputation.
• Inventory Management: Managing inventory levels is critical in the fashion industry. Overstocking can lead to markdowns and reduced margins, while understocking can result in lost sales and dissatisfied customers.
• Brand Image and Reputation: As a luxury brand, Canada Goose's success depends heavily on its brand image and reputation. Any negative publicity, whether related to product quality, ethical concerns, or other issues, can quickly erode consumer trust and impact sales.

Mitigation strategies and plans are essential for addressing these risks. While specific details may vary, common strategies include:

• Diversifying Supply Chains: Reducing reliance on any single supplier or region can help mitigate the impact of supply chain disruptions.
• Implementing Robust Risk Management Systems: Identifying, assessing, and prioritizing risks allows Canada Goose to develop proactive strategies for mitigating potential impacts.
• Investing in Brand Protection: Protecting the brand through quality control, ethical sourcing, and effective communication can help maintain consumer trust and loyalty.

For more insights into Canada Goose Holdings Inc. (GOOS), explore Exploring Canada Goose Holdings Inc. (GOOS) Investor Profile: Who’s Buying and Why?

Canada Goose Holdings Inc. (GOOS) Growth Opportunities

Canada Goose Holdings Inc. (GOOS) is focusing on several key strategies to drive future growth. These encompass product innovation, market expansion, strategic initiatives, and leveraging competitive advantages.

Key Growth Drivers:

• Product Innovation: Canada Goose is investing in new product categories and materials. For example, they invested $22 million in performance outerwear for launch in Q3 2024, $18 million in sustainable materials for Q4 2024, and $15 million in urban technical wear for Q1 2025.
• Market Expansion: The company aims to expand its presence in key markets. Projections include a 15.7% CAGR in Asia Pacific with a revenue potential of $127 million by 2025, a 12.3% CAGR in Europe with $93 million by 2025, and a 9.6% CAGR in North America with $212 million by 2025.
• Strategic Initiatives: Canada Goose is expanding digital commerce with a projected 37% online sales growth. They're also investing in the direct-to-consumer (DTC) channel, targeting $450 million in additional revenue and diversifying their product line with 5-7 new product categories.

Future Revenue Growth Projections and Earnings Estimates:

While earlier forecasts were higher, recent analysis projects revenues of CA$1.3 billion for 2024, a 3.5% sales increase. Earnings per share (EPS) are expected to rise by 14% to CA$0.61. For fiscal years 2025 and 2026, revenue estimates are $938.04 million (a -4.9% change) and $978.95 million (a +4.4% change), respectively. The EPS estimate for the current fiscal year is $0.72, a -1.4% change year-over-year, while the next fiscal year is projected at $0.86, a +19.4% increase.

Strategic Initiatives and Partnerships:

• Transformation Program: Canada Goose is implementing a transformation program to streamline operations and increase efficiency. This includes a workforce reduction of approximately 17% of corporate roles.
• Direct-to-Consumer (DTC) Focus: The company is shifting towards a DTC model to control brand narrative and product distribution, which offers higher margins and better customer data.
• Retail Expansion: Canada Goose continues to expand its retail presence. In fiscal year 2024, they opened 17 permanent stores, including locations in Honolulu, Nanjing, and Melbourne. As of Q2 2025, the total permanent store count reached 72.
• Online Engagement: Launched a live shopping channel on Douyin, a Chinese platform, to engage and grow brand awareness in a key market.
• Recommerce Platform: Introduced Generations, a recommerce platform in Canada, to support sustainability by allowing consumers to shop and trade in pre-loved products.

Competitive Advantages:

Canada Goose possesses several competitive advantages that position it for future growth:

• Brand Strength: Renowned for high-quality, luxury winter outerwear, with a global brand value of $1.2 billion and high brand recognition in cold-weather markets.
• Product Quality: Maintains a luxury positioning with average jacket prices ranging from $695 to $1,995. The brand's reputation is built on superior quality and performance.
• Vertical Integration: Direct control over manufacturing processes with four owned facilities in Canada and an annual production capacity of 500,000 jackets.
• Innovation: Proprietary thermal technology and water-resistant materials, with temperature ratings down to -40°C.

Despite these strengths, challenges remain. Goldman Sachs downgraded Canada Goose, citing an increasingly competitive environment and a decelerating global luxury market. Analysts have also noted that the company's high price point limits broader market accessibility, and there's limited product diversification beyond outerwear, with outerwear accounting for 87% of total revenue as of 2023.

Despite a challenging consumer spending environment, Canada Goose reported a 6% increase in total revenue to $609.9 million in Q3 2024, with DTC revenue growing by 14% to $514.0 million. The company's strategic initiatives and brand strength provide a foundation for long-term profitable growth.

For further insights into Canada Goose Holdings Inc. (GOOS), explore: Exploring Canada Goose Holdings Inc. (GOOS) Investor Profile: Who’s Buying and Why?