Canada Goose Holdings Inc. (“Canada Goose” or the “Company”) (NYSE:GOOS, TSX:GOOS) today announced financial results for the first quarter ended June 27, 2021.
“Canada Goose is off to a great start in the first quarter,” said Dani Reiss, President & CEO. “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.”
First Quarter Fiscal 2022 Business Highlights (compared to First Quarter Fiscal 2021)
First Quarter Fiscal 2022 Results (compared to First Quarter Fiscal 2021)
Fiscal 2022 Outlook
The Company reiterates the fiscal 2022 outlook which was issued on May 13, 2021, in the press release announcing results for fiscal 2021, on the basis of a gradual and progressive improvement in the COVID-19 landscape. 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. See “Cautionary Note Regarding Forward-Looking Statements”.
Conference Call Information
Dani Reiss, President and Chief Executive Officer and Jonathan Sinclair, EVP and Chief Financial Officer, will host the conference call at 9:00 a.m. Eastern Time on August 11, 2021. Those interested in participating are invited to dial (833) 952 1517 or (778) 560 2836 if calling internationally and reference Conference ID 5659259 when prompted. A live audio webcast of the conference call will be available online at http://investor.canadagoose.com.
About Canada Goose
Founded in 1957 in a small warehouse in Toronto, Canada, Canada Goose (NYSE:GOOS, TSX:GOOS) is a lifestyle brand and a leading manufacturer of performance luxury apparel. Every collection is informed by the rugged demands of the Arctic, ensuring a legacy of functionality is embedded in every product from parkas and rainwear to apparel and accessories. Canada Goose is inspired by relentless innovation and uncompromised craftsmanship, recognized as a leader for its Made in Canada commitment. In 2020, Canada Goose announced HUMANATURE, its purpose platform that unites its sustainability and values-based initiatives, reinforcing its commitment to keep the planet cold and the people on it warm. Canada Goose also owns Baffin, a Canadian designer and manufacturer of performance outdoor and industrial footwear. Visit www.canadagoose.com for more information.
Condensed Consolidated Interim Statements of Loss and Comprehensive Loss |
||||||||
(unaudited) |
||||||||
(in millions of Canadian dollars, except share and per share amounts) |
||||||||
|
First quarter ended |
|||||||
|
June 27,
|
June 28,
|
||||||
|
$ |
$ |
||||||
Revenue |
|
56.3 |
|
|
26.1 |
|
||
Cost of sales |
|
25.6 |
|
|
21.3 |
|
||
Gross profit |
|
30.7 |
|
|
4.8 |
|
||
Gross margin |
|
54.5 |
% |
|
18.4 |
% |
||
SG&A expenses |
|
71.6 |
|
|
48.6 |
|
||
SG&A expenses as % of revenue |
|
127.2 |
% |
|
186.2 |
% |
||
Depreciation and amortization |
|
19.8 |
|
|
15.5 |
|
||
Operating loss |
|
(60.7 |
) |
|
(59.3 |
) |
||
Operating margin |
|
(107.8 |
)% |
|
(227.2 |
)% |
||
Net interest, finance and other costs |
|
16.5 |
|
|
6.7 |
|
||
Loss before income taxes |
|
(77.2 |
) |
|
(66.0 |
) |
||
Income tax recovery |
|
(20.5 |
) |
|
(15.9 |
) |
||
Effective tax rate |
|
26.6 |
% |
|
24.1 |
% |
||
Net loss |
|
(56.7 |
) |
|
(50.1 |
) |
||
Other comprehensive (loss) income |
|
(1.7 |
) |
|
2.0 |
|
||
Comprehensive loss |
|
(58.4 |
) |
|
(48.1 |
) |
||
Loss per share |
|
|
||||||
Basic and diluted |
$ |
(0.51 |
) |
$ |
(0.46 |
) |
||
Weighted average number of shares outstanding |
|
|
||||||
Basic and diluted |
|
110,504,248 |
|
|
110,080,288 |
|
||
|
|
|
||||||
Non-IFRS Financial Measures:(1) |
|
|
||||||
EBIT |
|
(60.7 |
) |
|
(59.3 |
) |
||
Adjusted EBIT |
|
(60.2 |
) |
|
(46.5 |
) |
||
Adjusted EBIT margin |
|
(106.9 |
)% |
|
(178.2 |
)% |
||
Adjusted net loss |
|
(50.0 |
) |
|
(38.4 |
) |
||
Adjusted net loss per basic and diluted share |
$ |
(0.45 |
) |
$ |
(0.35 |
) |
(1) See “Non-IFRS Financial Measures”.
Condensed Consolidated Interim Statements of Financial Position |
|||||
(unaudited) |
|||||
(in millions of Canadian dollars) |
|||||
|
June 27,
|
June 28,
|
March 28,
|
||
Assets |
$ |
$ |
$ |
||
Current assets |
|
|
|
||
Cash |
305.9 |
160.1 |
477.9 |
||
Trade receivables |
39.2 |
28.2 |
40.9 |
||
Inventories |
404.5 |
428.6 |
342.3 |
||
Income taxes receivable |
6.6 |
11.9 |
4.8 |
||
Other current assets |
34.4 |
40.6 |
31.0 |
||
Total current assets |
790.6 |
669.4 |
896.9 |
||
|
|
|
|
||
Deferred income taxes |
60.1 |
53.5 |
46.9 |
||
Property, plant and equipment |
119.9 |
115.0 |
116.5 |
||
Intangible assets |
155.5 |
159.5 |
155.0 |
||
Right-of-use assets |
240.8 |
211.7 |
233.7 |
||
Goodwill |
53.1 |
53.1 |
53.1 |
||
Other long-term assets |
4.4 |
2.2 |
5.1 |
||
Total assets
|
1,424.4 |
1,264.4 |
1,507.2 |
||
|
|
|
|
||
Liabilities |
|
|
|
||
Current liabilities |
|
|
|
||
Accounts payable and accrued liabilities |
149.6 |
134.8 |
177.8 |
||
Provisions |
13.4 |
10.8 |
20.0 |
||
Income taxes payable |
10.4 |
11.7 |
19.1 |
||
Short-term borrowings |
10.9 |
2.6 |
— |
||
Current portion of lease liabilities |
49.6 |
37.8 |
45.2 |
||
Total current liabilities |
233.9 |
197.7 |
262.1 |
||
|
|
|
|
||
Provisions |
25.4 |
21.8 |
25.6 |
||
Deferred income taxes |
14.2 |
13.1 |
21.6 |
||
Revolving facility |
— |
207.9 |
— |
||
Term loan |
363.2 |
154.6 |
367.8 |
||
Lease liabilities |
214.7 |
190.9 |
209.6 |
||
Other long-term liabilities |
27.6 |
4.2 |
20.4 |
||
Total liabilities |
879.0 |
790.2 |
907.1 |
||
|
|
|
|
||
Shareholders' equity |
545.4 |
474.2 |
600.1 |
||
Total liabilities and shareholders' equity |
1,424.4 |
1,264.4 |
1,507.2 |
Non-IFRS Financial Measures
This press release includes references to certain non-IFRS financial measures such as adjusted EBIT, adjusted EBIT margin, adjusted net loss and adjusted net loss per basic and diluted share. These financial measures are employed by the Company to measure its operating and economic performance and to assist in business decision-making, as well as providing key performance information to senior management. The Company believes that, in addition to conventional measures prepared in accordance with IFRS, certain investors and analysts use this information to evaluate the Company’s operating and financial performance. These financial measures are not defined under IFRS nor do they replace or supersede any standardized measure under IFRS. Other companies in our industry may calculate these measures differently than we do, limiting their usefulness as comparative measures. Definitions and reconciliations of non-IFRS measures to the nearest IFRS measure can be found in our MD&A. Such reconciliations can also be found in this press release under “Reconciliation of Non-IFRS Measures”.
Reconciliation of Non-IFRS Measures
The tables below reconcile net loss to EBIT, adjusted EBIT, and adjusted net loss for the periods indicated. Adjusted EBIT margin is equal to adjusted EBIT for the period presented as a percentage of revenue for the same period.
|
First quarter ended |
||||
CAD $ millions |
June 27,
|
June 28,
|
|||
Net loss |
(56.7 |
) |
(50.1 |
) |
|
Add (deduct) the impact of: |
|
|
|||
Income tax recovery |
(20.5 |
) |
(15.9 |
) |
|
Net interest, finance and other costs |
16.5 |
|
6.7 |
|
|
EBIT |
(60.7 |
) |
(59.3 |
) |
|
Unrealized foreign exchange (gain) loss on Term Loan Facility (a) |
(0.9 |
) |
(0.1 |
) |
|
Share-based compensation (b) |
0.1 |
|
0.1 |
|
|
Net temporary store closure costs (c) |
0.2 |
|
5.5 |
|
|
Net excess overhead costs from temporary closure of manufacturing facilities (c) |
— |
|
4.3 |
|
|
Pre-store opening costs (d) |
0.9 |
|
0.9 |
|
|
Transition of logistics agencies (g) |
— |
|
1.5 |
|
|
Costs of the Baffin acquisition (h) |
— |
|
0.4 |
|
|
Other |
0.2 |
|
0.2 |
|
|
Total adjustments |
0.5 |
|
12.8 |
|
|
Adjusted EBIT |
(60.2 |
) |
(46.5 |
) |
|
Adjusted EBIT margin |
(106.9 |
)% |
(178.2 |
)% |
|
First quarter ended |
||||
CAD $ millions |
June 27,
|
June 28,
|
|||
Net loss |
(56.7 |
) |
(50.1 |
) |
|
Add (deduct) the impact of: |
|
|
|||
Unrealized foreign exchange (gain) loss on Term Loan Facility (a) |
(0.9 |
) |
(0.1 |
) |
|
Share-based compensation (b) |
0.1 |
|
0.1 |
|
|
Net temporary store closure costs (c) (e) |
0.2 |
|
6.7 |
|
|
Net excess overhead costs from temporary closure of manufacturing facilities (c) |
— |
|
4.3 |
|
|
Pre-store opening costs (d) (f) |
1.0 |
|
1.1 |
|
|
Transition of logistics agencies (g) |
— |
|
1.5 |
|
|
Costs of the Baffin acquisition (h) |
— |
|
0.4 |
|
|
Acceleration of unamortized costs on Term Loan Facility Repricing (i) |
9.5 |
|
— |
|
|
Restructuring expense (c) |
— |
|
1.6 |
|
|
Other |
0.2 |
|
0.2 |
|
|
Total adjustments |
10.1 |
|
15.8 |
|
|
Tax effect of adjustments |
(3.4 |
) |
(4.1 |
) |
|
Adjusted net loss |
(50.0 |
) |
(38.4 |
) |
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements, including statements relating to the execution of our proposed strategy, our operating performance and prospects, and the general impact of the COVID-19 pandemic on the business. These forward-looking statements generally can be identified by the use of words such as “anticipate,” “believe,” “could,” “continue,” “expect,” “estimate,” “forecast,” “may,” “potential,” “project,” “plan,” “would,” “will,” and other words of similar meaning. Each forward-looking statement contained in this press release, including, without limitation, our fiscal 2022 financial outlook and the related assumptions included herein is subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statement. Our business is subject to substantial risks and uncertainties. Applicable risks and uncertainties include, among others, the impact of the ongoing COVID-19 pandemic, and are discussed under the headings “Cautionary Note regarding Forward-Looking Statements” and “Factors Affecting our Performance” in our MD&A as well as in our “Risk Factors” in our Annual Report on Form 20-F for the year ended March 28, 2021. You are also encouraged to read our filings with the SEC, available at www.sec.gov, and our filings with Canadian securities regulatory authorities available at www.sedar.com for a discussion of these and other risks and uncertainties. Investors, potential investors, and others should give careful consideration to these risks and uncertainties. We caution investors not to rely on the forward-looking statements contained in this press release when making an investment decision in our securities. The forward-looking statements in this press release speak only as of the date of this release, and we undertake no obligation to update or revise any of these statements.
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