In Response To The Epidemic, Canada Goose Will Cut Production By A Third This Year

Canada goose, a Canadian down jacket brand, recently released key financial data for the first quarter of fiscal year 2021 as of June 28. Its sales volume dropped by 63.3% year on year, and its loss expanded. Canada goose is working to strengthen its direct to consumer e-commerce business.

Dani Reiss, President and CEO of Canada goose, said, "adversity promotes change, drives innovation, and creates real winners."

"This is especially true today for Canada goose, as we are beginning to see signs of recovery around the world and we are about to enter the most critical (autumn and winter) season. Where we face uncertainty, we practice discipline and flexibility; where we see opportunities, we accelerate strategic deployment. "

The company is stepping up plans to develop "e-commerce direct business and omni channel innovation that can be extended to the world". Canada goose has stepped up its investment in these areas to meet the critical autumn and winter. This includes the introduction of mobile Omni channel capabilities in stores in the United States after a successful pilot in Canada.

Canada goose also reduced its retail investment and refocused its investment. This year's new stores will be mainly concentrated in mainland China, where passenger flow has recovered better than other markets and luxury consumption has shifted to China due to travel restrictions. Canada goose plans to open four stores in Chengdu, the first of which opened in June and is currently outperforming expectations.

Currently, Canada goose has 22 Direct stores around the world, of which 21 have reopened after the outbreak.

Canada goose also plans to significantly reduce inventory by the end of fiscal year 2021 (as of the end of March 2021), reducing down jacket production by about a third of the previous fiscal year.

Canada goose expects sales to fall sharply in the next quarter as the negative impact of the outbreak continues. Moreover, due to the strategic change, the volume of wholesale shipment and wholesale revenue will continue to decline. While the direct retail channel has not yet ushered in the sales peak season, Canada goose said it was preparing for online sales in autumn and winter.

Key financial data for Canada goose for the first quarter of fiscal year 2021 as of June 28 are as follows:

Sales fell 63.3% to $26.1 million

Retail sales decreased from $35.7 million to $34.7 million, mainly from retail sales of $34.7 million

Gross profit of $4.8 million, gross profit margin of 18.4%

The operating loss was $59.3 million and the operating profit margin was negative 227.2%

The net loss increased to $50.1 million from $29.4 million in the same period last year, with a diluted loss of $0.46 per share

The adjusted EBIT increased to $46.5 million from $25.9 million in the same period last year

The adjusted net loss increased to $38.4 million from $22.8 million in the same period last year, with a diluted loss of $0.35 per share