Canadian outdoor apparel specialist Canada Goose has hailed a strong start to the year, despite a widening of its net loss in the first quarter of fiscal 2019.
For the three months to 30 June, Canada Goose saw net loss expand to CAD18.7m (US$14.2m) from CAD12.1m in the year-ago period, despite a surge in sales. But in what is a seasonally small quarter for the luxury outerwear brand, it was hit with higher corporate expenses on marketing, headcount IT, and costs relating to public company compliance.
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Gross margin expanded to 64%, compared to 46.8% last year. The increase in gross margin was attributable to a greater proportion of direct-to-consumer revenue and to a lesser degree, wholesale gross margin expansion.
And total revenue jumped 58.5% to CAD44.7m from CAD28.2m last year, while wholesale revenue increased to CAD21.5m from CAD19.9m, driven by higher order volumes from existing retail partners.
Direct-to-consumer revenue increased to CAD23.2m from CAD8.3m in the prior-year period. The increase was primarily due to the strong performance of all existing and new retail stores, with particularly significant contributions from well-established locations. E-commerce also had a positive impact on the quarter.
“Our strong start to the year, in our smallest fiscal quarter, is a great leading indicator. Our products and our brand continue to resonate with people around the world, and our direct-to-consumer channel was a standout performer in the quarter. Productivity across our retail store network in this off-peak period was exceptional, reducing the loss impact of our strategic growth investments and giving us a favourable tailwind for the rest of the year,” said CEO Dani Reiss.
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By GlobalDataLooking ahead, the company has reiterated its fiscal 2019 outlook, forecasting annual revenue growth of at least 20% and annual growth in adjusted net income per diluted share of at least 25%.
