Canada Goose Reports Results for Third Quarter Fiscal 2021

first_img $ 36.3 CAD $ millions 127.1 2.4 118.2 Three quarters ended TORONTO–(BUSINESS WIRE)–Feb 4, 2021– Canada Goose Holdings Inc. (“Canada Goose” or the “Company”) (NYSE:GOOS, TSX:GOOS) today announced financial results for the third quarter ended December 27, 2020. “The global strength of our brand and digital business has returned Canada Goose to growth in our biggest quarter. Through HUMANATURE, we are also rapidly advancing our sustainability and purpose-based commitments,” said Dani Reiss, President & CEO. “While we remain in an uncertain world, we are very encouraged by our strong momentum as we finish the fiscal year.” Third Quarter Fiscal 2021 Business Highlights (compared to Third Quarter Fiscal 2020)Global e-Commerce revenue increased by 39.3%.DTC revenue in Mainland China increased by 41.7%.Total revenue increased for the first time since the onset of the pandemic. Third Quarter Fiscal 2021 Results (compared to Third Quarter Fiscal 2020)Total revenue was $474.0m from $452.1m.DTC revenue was $299.4m from $301.8m driven by e-Commerce growth and continued store expansion in Mainland China, offset by lower retail revenue due to COVID-19 disruptions globally.Wholesale revenue was $160.8m from $145.3m. The increase was a result of the later timing of shipments as requested from partners and international distributors relative to the comparative quarter.Other revenue was $13.8m from $5.0m. The increase was driven by PPE sales in support of COVID-19 response efforts. 10.0 % — 33.8 % Provisions 153.3 Other % 44.3 December 27,2020 — Deferred income taxes 47.8 $ 156.1 December 29,2019 0.97 40.8 149.2 Income taxes payable — 161.4 0.2 % 163.8 $ 109,714,958 149.2 110,928,199 153.3 1.0 Tax effect of adjustments 0.4 5.8 Adjusted EBIT (2.7) Non-cash provision release (f) — 67.3 1.46 53.1 1.45 Condensed Consolidated Interim Statements of Income and Comprehensive Income $ 13.4 50.6 1.01 By Digital AIM Web Support – February 4, 2021 Gross profit was $316.4m, a gross margin of 66.8%, compared to $298.4m and 66.0%. The increase in gross profit was attributable to revenue growth and $4.8m of government subsidies. The increase in gross margin was a result of higher DTC and Wholesale gross margins, partially offset by a lower Other gross margin.DTC gross margin of 77.9%, compared to 75.1%. The increase was attributable to higher pricing and favourable geographic mix (+210 bps). Gross margin was also positively impacted by $1.6m (+50 bps) of government subsidies.Wholesale gross margin of 51.5%, compared to 48.5%. The increase was attributable to the net impact of higher pricing and the positive impact of volume (+180 bps) driven by parkas, partially offset by the unfavourable impact of a higher proportion of distributor sales (-80 bps). Gross margin was also positively impacted by $3.1m (+200 bps) of government subsidies.Other segment gross profit was $0.3m from $1.3m. PPE gross loss and gross margin were $(0.7)m and (6.5)%. Third quarter ended 255.7 Trade receivables % 31.2 December 29,2019 % 22.9 — Current assets 153.3 577.4 $ 694.9 6.8 149.2 33.3 5.4 27.2 8.7 $ (1.5) Local NewsBusiness Net interest, finance and other costs — Weighted average number of sharesoutstanding — 23.9 Income before income taxes 157.9 4.6 86.4 109.1 December 27,2020 118.0 Net income (in millions of Canadian dollars) — 24.2 26.6 — 7.0 32.3 317.5 35.8 (3.3) 37.6 — 15.4 — 161.4 1.08 Other comprehensive (loss) income 2.2 (i) The non-cash unamortized costs accelerated in connection with the amendments to the Term Loan Facility on October 7, 2020 and May 10, 2019. % (2.0) — 39.1 Operating margin 1.4 Basic Earnings per share — $ 1.1 (b) 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. 2.2 143.3 0.61 0.5 1.36 975.7 35.9 160.6 509.7 1.07 18.4 Gross profit 8.1 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. 161.4 110,581,202 339.0 Diluted — $ Diluted $ 122.5 Deferred income taxes 111,092,787 — EBIT March 29,2020 1.4 211.8 Net interest, finance and other costs 36.2 19.1 185.4 36.2 110,136,707 Adjusted EBIT margin % Acceleration of unamortized costs on Term Loan Refinancing (i) $ (a) 25.6 — 474.0 19.5 Adjusted EBIT margin 111.9 118.2 Goodwill 160.6 Total current assets 18.3 Total adjustments 7.8 1.09 111,239,180 0.77 Revenue 114.7 Net temporary store closure costs (d) 415.4 240.4 412.3 209.3 $ 36.3 0.5 144.7 $ Condensed Consolidated Interim Statements of Financial Position 107.0 Accounts payable and accrued liabilities December 27,2020 December 29,2019 (e) Costs incurred during pre-opening periods for new retail stores, including depreciation on right-of-use assets. 376.1 4.8 15.6 316.4 0.77 Total adjustments 469.0 0.4 159.9 Add (deduct) the impact of: 66.0 Adjusted net income per diluted share 25.3 Add (deduct) the impact of: 66.8 Total liabilities Transition of logistics agencies (c) 19.1 (in millions of Canadian dollars, except share and per share amounts) — 69.9 15.8 217.1 18.5 (5.2) 0.61 Twitter Depreciation and amortization 956.6 1.9 15.7 Current liabilities 59.8 817.2 Net temporary store closure costs (d) (g) $ 16.4 (1) See “Non-IFRS Financial Measures”. 118.0 % 161.7 Right-of-use assets Operating income was $153.3m, an operating margin of 32.3%, compared to $161.4m and an operating margin of 35.7%.DTC operating margin of 55.0%, compared to 56.0%. The decrease was due to lower retail profitability from COVID-19 disruptions. This was partially offset by a higher gross margin and the positive impact of e-Commerce growth.Wholesale operating margin of 42.9%, compared to 38.0%. The increase was attributable to a higher gross margin and cost reduction initiatives, supplemented by $3.1m of government subsidies.Other operating loss was $(80.4)m from $(62.7)m. The increase was attributable to higher operating costs including an $8.4m increase in marketing costs, and $3.3m of product development costs. In addition, there were $7.1m of unfavourable foreign exchange losses partially offset by $1.3m of government subsidies. 2.5 % (3.0) 4.6 325.0 — — 0.1 254.4center_img 5.8 155.6 600.9 35.7 67.3 Canada Goose Reports Results for Third Quarter Fiscal 2021 % $ 1.2 $ 18.3 85.0 22.7 209.3 Other 174.9 Facebook $ 13.0 (unaudited) 25.0 5.4 Adjusted EBIT 37.6 105.5 Transition of logistics agencies (c) 30.5 — (4.4) Pre-store opening costs (h) 208.9 Selling, general and administrative expenses 19.5 4.3 December 29,2019 127.1 (0.3) $ 15.1 — — % % 111.9 % 147.6 (unaudited) 1.34 216.6 61.1 Effective tax rate 158.1 Pinterest 4.8 Twitter 348.1 % 26.4 600.1 % 110,201,805 1,120.3 21.4 % 499.7 (2.7) $ Net income 1.08 Income tax expense Revolving facility December 27,2020 Non-cash provision release (f) Adjusted net income per basic share 119.7 10.0 (3.0) 153.7 67.3 December 29,2019 — Pre-store opening costs (e) Three quarters ended December 27,2020 18.0 1.7 6.0 December 27,2020 Assets 22.7 Restructuring expense (d) 157.9 1.8 Adjusted net income (f) 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 third and three quarters ended December 27, 2020. 1.1 Short-term borrowings 0.1 $ Inventories 1.9 Unrealized foreign exchange gain on Term Loan Facility (b) 2.4 (0.3) 254.6 107.0 32.3 Unrealized foreign exchange gain on Term Loan Facility (b) — 31.7 2.4 7.0 1.0 — 22.1 — 119.7 6.0 — $ — Income tax expense Other long-term liabilities 0.7 Third quarter ended Pinterest 1,576.6 147.2 SG&A expenses as % of revenue TAGS  Previous articleGlobal Endoscopy Market in 2020 – Impact of COVID-19 on the Industry – ResearchAndMarkets.comNext articleNuStar Energy L.P. Reports Fourth Quarter and Full-Year 2020 Earnings Results Digital AIM Web Support Three quarters ended 36.8 1.4 0.1 23.9 0.9 217.1 27.3 December 27,2020 Costs of the Baffin acquisition (a) 144.4 0.9 Gross margin 113.7 45.0 Property, plant and equipment % 531.8 19.1 % Adjusted net income Other current assets 118.0 % 109,646,184 Total assets — $ 4.3 Income taxes receivable Non-IFRS Financial Measures This press release includes references to certain non-IFRS financial measures such as adjusted EBIT, adjusted EBIT margin, adjusted net income and adjusted net income per 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 income to EBIT, 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. 1,136.9 Lease liabilities 205.0 (d) Total government subsidies globally of $6.4m and $27.1m were recognized in the third and three quarters ended December 27, 2020, respectively. These subsidies were recorded as a reduction to the associated wage costs which the Company incurred; as a result government subsidies were recorded as a reduction to excess overhead costs from temporary closure of manufacturing facilities ($nil and $1.3m), temporary store closure costs (less than $0.1m and $1.4m), and restructuring expense ($nil and $0.4m), for the third and three quarters ended December 27, 2020, respectively. The benefit of $6.4m and $26.7m of government subsidies therefore remained in adjusted EBIT as a reduction to the associated wage costs for the third and three quarters ended December 27, 2020, respectively. 21.0 Liabilities Costs of the Baffin acquisition (a) Basic Net income 627.2 109.1 Comprehensive income 2.6 — 85.0 192.0 Total liabilities and shareholders’ equity % 43.5 0.5 279.5 115.1 1,136.9 Total current liabilities 33.3 22.1 Net excess overhead costs from temporary closure of manufacturing facilities (d) $ 298.4 72.0 Facebook 1,576.6 WhatsApp 26.6 1.0 157.6 107.0 1.9 1.02 Lease liabilities 0.96 Shareholders’ equity 1.1 — % 7.7 520.2 (c) Costs incurred for the transition of logistics, warehousing, and freight forwarding agencies to enhance our global distribution structure. December 29,2019 36.2 Term loan 209.3 36.2 December 29,2019 Third quarter ended 185.9 % Operating income 109.1 (1.1) $ Net excess overhead costs from temporary closure of manufacturing facilities (d) CAD $ millions (0.8) Net income was $107.0m, or $0.96 per diluted share, compared to $118.0m, or $1.07 per diluted share.Non-IFRS adjusted EBIT was $157.9m, an adjusted EBIT margin of 33.3%, compared to $163.8m and 36.2%.Non-IFRS adjusted net income was $111.9m, or $1.01 per diluted share, compared to $119.7m, or $1.08 per diluted share.Cash was $469.0m as at quarter end, compared to $72.0m, alongside $256.2m of available borrowing capacity in the undrawn revolving facility. The increase in cash was driven by positive free operating cash flow and refinancing proceeds. Outlook Given ongoing COVID-19 disruptions and uncertainties, the Company is not providing an outlook for fiscal 2021. As of the date of this release, 7 of 28 Canada Goose retail stores, representing 25% of the network, are closed. Conference Call Information Dani Reiss, President 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 February 4, 2021. Those interested in participating are invited to dial (866) 211-4197 or (647) 689-6828 if calling internationally and reference Conference ID 7108676 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. 163.8 — 207.7 Other long-term assets Provisions 1.0 1,120.3 53.1 12.0 Intangible assets % (h) Pre-store opening costs incurred in (e) above plus $0.1m and $0.6m of interest expense on lease liabilities for new retail stores during pre-opening periods in the third and three quarters ended December 27, 2020 (third and three quarters ended December 29, 2019 – $0.4m and $0.9m, respectively). 452.1 (g) Includes $0.1m and $1.4m of interest expense on lease liabilities for temporary store closures in the third and three quarters ended December 27, 2020, respectively. EBIT 53.1 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,” and other words of similar meaning. Each forward-looking statement contained in this press release 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 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 March 29, 2020. 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. View source version on businesswire.com:https://www.businesswire.com/news/home/20210204005449/en/ CONTACT: Investors: [email protected]: [email protected] KEYWORD: NORTH AMERICA CANADA INDUSTRY KEYWORD: RETAIL LUXURY FASHION SOURCE: Canada Goose Holdings Inc. Copyright Business Wire 2021. PUB: 02/04/2021 06:45 AM/DISC: 02/04/2021 06:45 AM http://www.businesswire.com/news/home/20210204005449/en Other data: (1) 123.6 Cash Cost of sales WhatsApp —last_img read more

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