Canada Goose Inc. (GOOS) Q3 2019 Earnings Report Analysis

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Recently I did an analysis of GOOS stock here:

In that analysis I gave GOOS a STRONG BUY rating.

Below is the update for Q3 results:

Q3 2019 (ending Dec 31st) Earnings and Sales Report:

For Q3 2019 the company reported $448.18M in sales: beats the estimates by C$3.92M; a 13% increase vs. last year.

The company reported EPS of C$1.07: beats by C$0.01; a 15% increase vs. last year.

Sales in Asia continued to grow aggressively (104% increase from $46M to $95M CAD).

Growth in the USA was 20%; Europe and the rest of the World 11%

2020 guidance:

The company is reducing its 2020 guidance due to reduced traffic to stores in Asia due to coronavirus outbreak.

The company sees fiscal year 2020 sales CA$945-$955 million adjusted at EPS CA$1.33-$1.37. The company expects revenue to grow between 13.8% and 15%, compared with its prior forecast of at least 20% growth. It projected full-year adjusted profit growth to be in a range of 2.2% decline to 0.7% rise from a year earlier, compared with a prior forecast of at least 25% growth.

As I mentioned previously my rating for GOOS was given for the 2-3 year range.

While coronavirus threat will reduce sales in the next couple months, eventually it will be done and GOOS will resume to strong growth in Asia. With that, if sales growth in Asian maintains, the company sales in Asia will match sales for the rest of the world by end of 2022. Just remember you are an investor, not a trader. Think about Bain which owned this company for like 7 years now. On the other hand, if you need quick growth and don’t want to wait for 2-3 years, then you might consider selling GOOS.

Canada Goose management is very conservative type. In the past they refused to raise guidance and avoid risk in giving estimates. They are doing this again this time. Indeed, sales will decline for the Q4 (ending March), however, hopefully coronavirus will not last much longer as we already see the number of new cases start to decrease:


My rating: Strong Buy

Have an idea about Canada Goose Inc (GOOS)? You have a different opinion about this stock? I made an error in assumptions? You have additional information to share? Please leave your comments below.

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