Canada Goose Holdings Receives Sell Rating Due to Rising Costs and Uncertain Outlook.

Bank of America Securities analyst Alexander Perry reiterated a Sell rating on Canada Goose Holdings due to rising costs and an uncertain outlook. The company's operating profit fell short of expectations, and it has not provided guidance for fiscal year 2026 due to macroeconomic uncertainties. Perry anticipates higher selling, general, and administrative expenses outweighing the benefits of improved direct-to-consumer sales momentum, leading to a downward revision of earnings per share estimates.

Canada Goose Holdings (GOOS) reported a wider-than-expected loss for the first quarter of fiscal 2026, sending shares down 8.9% in Thursday trade. Despite revenue that significantly exceeded analyst expectations, the luxury outerwear maker posted an adjusted loss of Cdn$0.91 per share, missing estimates of a Cdn$0.63 loss by Cdn$0.28 [1].

Revenue rose 22.4% year-over-year (YoY) to Cdn$107.8 million, substantially beating the consensus estimate of Cdn$66.06 million. The company attributed the revenue growth to a 23.8% increase in direct-to-consumer (DTC) sales, which reached Cdn$78.1 million, driven by comparable sales growth of 14.8%. The earnings miss was largely due to increased expenses, including a one-time financial award of Cdn$43.8 million resulting from an arbitration resolution with a former supplier, higher costs related to retail expansion, increased marketing spend for seasonal campaigns, and investments in product design [1].

The company reported a net loss attributable to shareholders of Cdn$125.2 million, compared to Cdn$77.4 million in the prior year period. Gross margin improved to 61.4% from 59.7% in the same quarter last year, primarily due to higher margin contribution from the company’s European knitwear facility. Wholesale revenue increased 11.9% to Cdn$17.9 million, while other revenue rose 31.1% to Cdn$11.8 million [1].

Barclays analyst Adrienne Yih has released an updated report, maintaining an Equal-Weight rating while lowering the price target to $13.00 from the previous $14.00. This adjustment marks a significant change of -7.14% in the target price [3]. The decision to maintain the Equal-Weight rating indicates that Barclays sees the stock moving in line with the broader market in the foreseeable future. The adjustment in the price target reflects a more cautious outlook on the company's financial performance.

Bank of America Securities analyst Alexander Perry reiterated a Sell rating on Canada Goose Holdings due to rising costs and an uncertain outlook. The company's operating profit fell short of expectations, and it has not provided guidance for fiscal year 2026 due to macroeconomic uncertainties. Perry anticipates higher selling, general, and administrative expenses outweighing the benefits of improved DTC sales momentum, leading to a downward revision of earnings per share estimates [2].

Canada Goose shares were trading nearly nine per cent lower at $16.17 on the Toronto Stock Exchange as of midday Thursday [1].

References:
[1] https://finance.yahoo.com/news/canada-goose-shares-tumble-earnings-154807731.html
[2] https://www.cbc.ca/news/canada/manitoba/canada-goose-loss-clothing-lines-1.7599427
[3] https://www.gurufocus.com/news/3027065/barclays-lowers-price-target-for-canada-goose-holdings-goos-to-13-goos-stock-news