On February 6th, Canada Goose Holdings adjusted its annual profit expectations downwards and fell short of quarterly revenue projections. This was attributed to inconsistent sales in China's luxury goods market, leading to a 6% drop in its U.S.-listed shares before the market opened.
The luxury industry in China has been affected by weak consumer spending, exacerbated by issues like youth unemployment and a property market downturn. This has hindered demand recovery in the region, impacting brands like Canada Goose.
Facing challenges in the Asian market, a U.S. luxury retailer launched a restructuring plan on Tuesday involving significant job cuts due to ongoing demand fragility in the region.
Canada Goose, based in Toronto, Ontario, experienced a 4.7% decrease in revenues from Greater China, contrasting with the previous quarter's 5.7% growth.
The company now anticipates flat to low-single-digit percentage growth in adjusted profit for fiscal 2025, compared to the previous forecast of a mid-single-digit increase.
In the third quarter, revenue dropped to C$607.9 million ($423.59 million) from C$609.9 million the previous year, falling short of the C$620.9 million analysts had projected, as compiled by LSEG.
Excluding exceptional items, Canada Goose reported a profit of C$1.51 per share, below the anticipated C$1.54 per share.