Fourth Quarter Fiscal 2022 Highlights (in
Canadian dollars):
- Total revenue $223.1m
- Net loss $9.1m, or $(0.09) per diluted share
- Non-IFRS adjusted EBIT $12.5m, representing a 5.6% margin
- Non-IFRS adjusted net income per diluted share $0.04
Canada Goose Holdings Inc. (“Canada Goose” or the “Company”)
(NYSE:GOOS, TSX:GOOS) today announced financial results for the
fourth quarter ended April 3, 2022.
“We closed fiscal 2022 with record sales for the year and
confidence in our ability to accelerate earnings growth in Fiscal
2023 and beyond,” said Dani Reiss, Chief Executive Officer. “We are
expanding to new markets with new partnerships and stores
complemented by a laser focus on customer experience. At the same
time, we are leveraging our successful playbook to continue to
expand product categories and year-round product relevance. Our
brand momentum, team and track record of execution gives us the
ultimate conviction in the road ahead.”
Fourth Quarter Fiscal 2022 Results (compared to the Fourth
Quarter Fiscal 2021)
- Total revenue increased by 6.8% to $223.1m from $208.8m. Due to
a 53-week fiscal year, the current quarter ended April 3, 2022
started and concluded one week later than the comparative quarter.
Using the same trading weeks as the comparative quarter in both
periods1, total revenue would have increased by 23.8%.
- DTC revenue increased by 8.0% to $185.4m from $171.6m. The
increase was driven by higher revenue from existing stores,
partially offset by a 12.3% decrease in e-Commerce revenue. Using
the same trading weeks as the comparative quarter in both periods,
DTC revenue would have increased by 27.8%, with e-Commerce growth
of 1.2%. In the comparative quarter last year, reported e-Commerce
growth was 123.2%.
- Wholesale revenue increased by 3.5% to $35.1m from $33.9m. The
increase was driven by higher order values. Using the same trading
weeks as the comparative quarter in both periods, Wholesale revenue
would have increased by 7.7%.
- Gross profit was $154.1m, a gross margin of 69.1%, compared to
$138.6m and 66.4%. The increase was attributable to pricing (+180
bps) and a higher proportion of sales to wholesale partners
compared to international distributors (+110 bps) partially offset
by higher sales in non-parka categories, typically with lower
margins.
- Operating income was $0.9m, an operating margin of 0.4%,
compared to $7.2m and 3.4%. Operating margin decreased due to
higher operating costs and lease impairment costs, partially offset
by gross margin expansion and a higher Wholesale operating
margin.
- Net loss was $(9.1)m, or $(0.09) per diluted share, compared to
$2.5m, or $0.02 per diluted share.
- Non-IFRS adjusted EBIT was $12.5m, an adjusted EBIT margin of
5.6%, compared to $4.8m and 2.3%.
- Non-IFRS adjusted net income was $4.1m, or $0.04 per diluted
share, compared to $0.7m, or $0.01 per diluted share.
- Cash was $287.7m as at quarter end, compared to $477.9m. During
fiscal 2022, 5,636,763 subordinate voting shares were repurchased
for a total cash consideration of $253.2m, including $65.9m for the
fourth quarter.
- Inventory was $393.3m as at quarter end, compared to $342.3m to
support future growth.
Fiscal 2023 Outlook
For fiscal 2023, the Company currently expects:
- Total revenue $1.300Bn to $1.400Bn.
- Non-IFRS adjusted EBIT $250m to $290m, representing a margin of
19.2% to 20.7%.
- Non-IFRS adjusted net income per diluted share $1.60 to
$1.90.
For the first quarter of fiscal 2023, the Company currently
expects:
- Total revenue $60m to $65m.
- Non-IFRS adjusted EBIT $(80)m to $(75)m.
- Non-IFRS adjusted net loss per diluted share $(0.64) to
$(0.60).
This outlook is based on a number of assumptions for fiscal
2023, including the following:
- Improved traffic and lower levels of operating disruptions
globally, including mandatory closures, in both Company and partner
operated retail stores, relative to fiscal 2022.
- A return to regular trading levels in Mainland China during the
peak selling season. 4 of 16 retail stores in this market are
currently closed as a result of COVID-19 restrictions, with the
remainder currently facing significant traffic impacts.
- Approximate % of fiscal 2023 total revenue by quarter: Q1 5%,
Q2 20%, Q3 50%, Q4 25%
- DTC % of total revenue 70% to 73%, driven by low to high teens
comparable sales growth and continued channel expansion.
- Wholesale revenue growth of 6%.
- Gross margin in the high 60s as a % of total revenue, with
expansion driven by DTC mix shift.
- Effective tax rate in the low 20s as a % of income before taxes
for fiscal 2023.
- Weighted average diluted shares outstanding of 107.7m for
fiscal 2023.
Within the meaning of applicable securities laws, this outlook
constitutes forward-looking information. The purpose of this
outlook is to provide a description of management's expectations
regarding the Company's financial performance and may not be
appropriate for other purposes. Actual results could vary
materially as a result of numerous factors, including the extent
and duration of operational disruptions that may affect our
business as a result of the COVID-19 pandemic and other risk
factors, many of which are beyond the Company’s control. See
“Cautionary Note Regarding Forward-Looking Statements”.
Conference Call Information
Dani Reiss, Chairman 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 May 19, 2022. Those interested in
participating are invited to dial (877) 804 7379 or (629) 228 0700
if calling internationally and reference Conference ID 6199963 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 Statements of
(Loss) Income and Comprehensive (Loss) Income
(unaudited)
(in millions of Canadian dollars, except
share and per share amounts)
Fourth quarter ended
For the year ended
April 3, 2022
March 28, 2021
April 3, 2022
March 28, 2021
$
$
$
$
Revenue
223.1
208.8
1,098.4
903.7
Cost of sales
69.0
70.2
364.8
349.7
Gross profit
154.1
138.6
733.6
554.0
Gross margin
69.1
%
66.4
%
66.8
%
61.3
%
SG&A expenses
153.2
131.4
576.9
437.0
SG&A expenses as % of revenue
68.7
%
62.9
%
52.5
%
48.4
%
Operating income
0.9
7.2
156.7
117.0
Operating margin
0.4
%
3.4
%
14.3
%
12.9
%
Net interest, finance and other costs
7.0
8.2
39.0
30.9
(Loss) income before income
taxes
(6.1
)
(1.0
)
117.7
86.1
Income tax expense (recovery)
3.0
(3.5
)
23.1
15.8
Effective tax rate
(49.2
) %
350.0
%
19.6
%
18.4
%
Net (loss) income
(9.1
)
2.5
94.6
70.3
Other comprehensive loss
(2.3
)
(8.0
)
(12.0
)
(5.3
)
Comprehensive (loss) income
(11.4
)
(5.5
)
82.6
65.0
(Loss) earnings per share
Basic
$
(0.09
)
$
0.02
$
0.87
$
0.64
Diluted
$
(0.09
)
$
0.02
$
0.87
$
0.63
Weighted average number of shares
outstanding
Basic
106,133,970
110,367,711
108,296,802
110,261,600
Diluted
106,133,970
111,364,712
109,154,721
111,112,173
Non-IFRS Financial Measures:(1)
Adjusted EBIT
12.5
4.8
174.6
132.6
Adjusted EBIT margin
5.6
%
2.3
%
15.9
%
14.7
%
Adjusted net income
4.1
0.7
119.4
86.2
Adjusted net income per basic share
$
0.04
$
0.01
$
1.10
$
0.78
Adjusted net income per diluted share
$
0.04
$
0.01
$
1.09
$
0.78
(1) See “Non-IFRS Financial Measures and
Other Specified Financial Measures”.
Condensed Consolidated Statements of
Financial Position
(unaudited)
(in millions of Canadian dollars)
April 3, 2022
March 28, 2021
Restated
Assets
$
$
Current assets
Cash
287.7
477.9
Trade receivables
42.7
40.9
Inventories
393.3
342.3
Income taxes receivable
1.1
4.8
Other current assets
37.5
31.0
Total current assets
762.3
896.9
Deferred income taxes
53.2
48.4
Property, plant and equipment
114.2
116.5
Intangible assets
122.2
124.8
Right-of-use assets
215.2
233.7
Goodwill
53.1
53.1
Other long-term assets
20.4
5.1
Total assets
1,340.6
1,478.5
Liabilities
Current liabilities
Accounts payable and accrued
liabilities
176.2
177.8
Provisions
18.5
20.0
Income taxes payable
24.5
19.1
Short-term borrowings
3.8
—
Current portion of lease liabilities
58.5
45.2
Total current liabilities
281.5
262.1
Provisions
31.3
25.6
Deferred income taxes
15.8
15.4
Term loan
366.2
367.8
Lease liabilities
192.2
209.6
Other long-term liabilities
25.7
20.4
Total liabilities
912.7
900.9
Shareholders' equity
427.9
577.6
Total liabilities and shareholders'
equity
1,340.6
1,478.5
Non-IFRS Financial Measures and Other Specified Financial
Measures
This press release includes references to certain non-IFRS
financial measures such as adjusted EBIT and adjusted net income
and certain non-IFRS ratios such as, adjusted EBIT margin, adjusted
net income and adjusted net income 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) income to adjusted EBIT,
and adjusted net income 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.
Fourth quarter ended
For the year ended
CAD $ millions
April 3, 2022
March 28, 2021(1)
April 3, 2022
March 28, 2021(1)
Net (loss) income
(9.1
)
2.5
94.6
70.3
Add (deduct) the impact of:
Income tax expense (recovery)
3.0
(3.5
)
23.1
15.8
Net interest, finance and other costs
7.0
8.2
39.0
30.9
Operating Income
0.9
7.2
156.7
117.0
Unrealized foreign exchange loss (gain) on
Term Loan Facility (a)
1.1
(3.1
)
2.7
(1.7
)
Share-based compensation (b)
—
0.2
0.2
0.5
Net temporary store closure costs (c)
—
0.7
0.2
7.5
Net excess overhead costs from temporary
closure of manufacturing facilities (c)
—
—
—
4.3
Pre-store opening costs (d)
0.1
0.4
3.2
5.2
Transition of logistics agencies (g)
—
—
0.1
2.2
Costs of the Baffin acquisition (h)
—
—
—
1.0
Non-cash provision release (i)
—
—
—
(3.0
)
Joint Venture transaction costs (j)
0.7
—
0.7
0.0
Impairment losses (k)
7.7
—
7.7
0.0
Other (n)
2.0
(0.6
)
3.1
(0.4
)
Total adjustments
11.6
(2.4
)
17.9
15.6
Adjusted EBIT
12.5
4.8
174.6
132.6
Adjusted EBIT margin
5.6
%
2.3
%
15.9
%
14.7
%
- The Company adopted a change in accounting policy on the
treatment of implementation costs related to Software as a Service
(“SaaS”) arrangements. See “Changes in Accounting Policies” for a
description of the impact from adopting the agenda decision and the
impact of retrospective application.
Fourth quarter ended
For the year ended
CAD $ millions
April 3, 2022
March 28, 2021(1)
April 3, 2022
March 28, 2021(1)
Net (loss) income
(9.1
)
2.5
94.6
70.3
Add (deduct) the impact of:
Unrealized foreign exchange loss (gain) on
Term Loan Facility (a)
1.1
(3.1
)
2.7
(1.7
)
Share-based compensation (b)
—
0.2
0.2
0.5
Net temporary store closure costs (c)
(e)
—
0.9
0.2
9.0
Net excess overhead costs from temporary
closure of manufacturing facilities (c)
—
—
—
4.3
Pre-store opening costs (d) (f)
0.1
0.6
3.6
6.0
Transition of logistics agencies (g)
—
—
0.1
2.2
Costs of the Baffin acquisition (h)
—
—
—
1.0
Non-cash provision release (i)
—
—
—
(3.0
)
Joint Venture transaction costs (j)
0.7
—
0.7
—
Impairment losses (k)
7.7
—
7.7
—
Deferred tax adjustment (l)
4.5
—
4.5
—
Acceleration of unamortized costs on Term
Loan Facility Repricing (m)
—
—
9.5
1.1
Restructuring expense (c)
—
—
—
1.7
Other (n)
2.0
(0.6
)
3.1
(0.2
)
Total adjustments
16.1
(2.0
)
32.3
20.9
Tax effect of adjustments
(2.9
)
0.2
(7.5
)
(5.0
)
Adjusted net income
4.1
0.7
119.4
86.2
- The Company adopted a change in accounting policy on the
treatment of implementation costs related to Software as a Service
(“SaaS”) arrangements. See “Changes in Accounting Policies” for a
description of the impact from adopting the agenda decision and the
impact of retrospective application.
a. Unrealized gains and losses on the
translation of the Term Loan Facility from USD to CAD, net of the
effect of derivative transactions entered into to hedge a portion
of the exposure to foreign currency exchange risk.
b. Non-cash based compensation expense on
stock options issued prior to the Company’s initial public offering
(“IPO”) under the Legacy Plan and cash payroll taxes paid of $nil
and $0.1m in the fourth quarter and year ended April 3, 2022,
respectively, (fourth quarter and year ended March 28, 2021 - $0.2m
and $0.2m, respectively) on gains earned by option holders
(compensation) when stock options are exercised.
c. Net temporary store closure costs of $nil
and $0.2m were incurred in the fourth quarter and year ended April
3, 2022, respectively. These were comprised of temporary store
costs of $nil and $0.4m, partially offset by government subsidies
of $nil and $0.2m in Europe in the fourth quarter and year ended
April 3, 2022, respectively. Globally, government subsidies of
$0.4m and $27.5m were recognized in the fourth quarter and year
ended March 28, 2021, respectively. Government subsidies were
recorded as a reduction to excess overhead costs from temporary
closure of manufacturing facilities ($nil and $1.3m), temporary
store closure costs ($0.4m and $1.8m) and restructuring expense
($nil and $0.4m), for the fourth quarter and year ended March 28,
2021, respectively. The benefit of $0.4m and $24.0m of government
subsidies therefore remained in adjusted EBIT as a reduction to the
associated wage costs for the fourth quarter and year ended March
28, 2021, respectively.
d. Costs incurred during pre-opening periods
for new retail stores, including depreciation on right-of-use
assets.
e. Includes $nil and less than $0.1m of
interest expense on lease liabilities for temporary store closures
for the fourth quarter and year ended April 3, 2022, respectively
(fourth quarter and year ended March 28, 2021 - $0.1m and $1.5m,
respectively).
f. Pre-store opening costs incurred in (d)
above as well as less than $0.1m and $0.4m of interest expense on
lease liabilities for new retail stores during pre-opening periods
in the fourth quarter and year ended April 3, 2022, respectively
(fourth quarter and year ended March 28, 2021 - $0.2m and $0.8m,
respectively).
g. Costs incurred for the transition of
logistics, warehousing, and freight forwarding agencies to enhance
our global distribution structure.
h. Costs in connection with the Baffin
acquisition and the impact of gross margin that would otherwise
have been recognized on inventory recorded at net realizable value
less costs to sell.
i. Release of a non-cash sales contract
provision as a result of the expiration of the statute of
limitations in the respective jurisdiction in the year ended March
28, 2021.
j. Acquisition and transactions costs related
to the Japanese joint venture recognized in the year ended April 3,
2022.
k. Impairment losses for non-financial retail
assets recorded as the result of the annual impairment assessment
for the year ended April 3, 2022.
l. Deferred tax adjustment recorded as the
result of Swiss tax reform in Canada Goose International AG in the
year ended April 3, 2022.
m. Non-cash unamortized costs accelerated in
connection with the Repricing Amendment of the Term Loan Facility
on April 9, 2021 during the year ended April 3, 2022 and the
amendments to the Term Loan Facility on October 7, 2020 and May 10,
2019 during the year ended March 28, 2021.
n. Costs for legal proceeding fees including
for the defence of class action lawsuits and rent abatements
received.
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,” “intend”, “predict” and other words of
similar meaning. Each forward-looking statement contained in this
press release, including, without limitation, our fiscal 2023 full
year and first quarter 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 the evolution of the global economic
conditions, 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 April 3, 2022.
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.
1 Includes the impact of $40.9m of revenue earned during the
week ended January 2, 2022, which was previously reported in the
Company’s results for the third quarter ended January 2, 2022 and
excludes $5.5m of revenue earned during the week ended of April 3,
2022.
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Investors: ir@canadagoose.com
Media: media@canadagoose.com
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