The luxury outerwear brand’s fiscal first quarter showed margin expansion and a widening product mix taking hold, even as North American store traffic softened
Key Takeaways
- Total revenue for the quarter ended June 28 rose 10.3 percent to $118.9 million, up 8.6 percent on a constant currency basis.
- Apparel, rainwear and windwear now represent nearly 40 percent of quarterly revenue, up from 15 percent a year ago and just 5 percent five years ago.
- Gross margin expanded to 62.4 percent from 61.4 percent, reflecting favorable channel and regional mix.
- Net loss narrowed to $90.8 million, or 93 cents a share, from $125.2 million, or $1.29 a share, a year earlier.
- The company opened four net new stores during the quarter, bringing its global count to 92, and projects full-year adjusted EBIT margin of 11 to 12 percent.
Canada Goose delivered a stronger fiscal first quarter, with revenue growth and narrowing losses reinforcing a multiyear strategy to widen its assortment beyond outerwear while tightening cost discipline. Chairman and chief executive officer Dani Reiss described the quarter as validation of that approach, noting that the smallest period of the fiscal year still produced solid top-line growth alongside meaningful margin gains.
The diversification push has become one of the company’s clearest through lines. Apparel, rainwear and windwear collectively accounted for close to 40 percent of the quarter’s revenue, a category mix that has expanded rapidly from just 5 percent five years ago to 15 percent last year and now approaching parity with the brand’s traditional outerwear core. Reiss framed the growth as evidence that the company has broadened its offering without diluting its identity, pointing to fleece knitwear pieces as a standout within the newer categories.
Direct-to-consumer revenue rose 8.6 percent to $84.8 million, aided by stronger performance in Asia Pacific and North America, though comparable DTC sales slipped 3.2 percent as softer store traffic in North America was only partially offset by double-digit e-commerce growth. Reiss attributed the traffic softness to macroeconomic conditions rather than a signal of weakening brand health, citing improved in-store conversion and execution. Wholesale proved to be a standout channel, with revenue climbing 66.5 percent to $29.8 million on strong reorders from accounts including Nordstrom, Bloomingdale’s, Holt Renfrew and Harry Rosen, along with early strength in spring 2027 bookings.
Profitability metrics moved decisively in the company’s favor. Gross margin expanded to 62.4 percent on favorable channel and regional mix, while operating loss narrowed to $103.8 million from $158.7 million and net loss came in at $90.8 million against $125.2 million a year earlier. Inventory rose 11 percent to $489.9 million, which the company attributed to an expanded assortment, a larger wholesale order book, and planned production growth ahead of fall.
Looking ahead, Canada Goose is projecting full-year revenue growth in the low single digits alongside an adjusted EBIT margin of 11 to 12 percent. Reiss said the company is monitoring newly announced U.S. tariffs set to take effect in August, estimating a potential impact of less than 200 basis points to operating margin if implemented as proposed without mitigating action. He also teased additional new categories still in development, with more visibility expected by fall. The quarter’s results suggest a brand increasingly comfortable treating category expansion as a durable growth engine rather than a hedge against seasonality, with wholesale and margin strength buying the direct-to-consumer channel room to stabilize.