A company whose founders brought the entrepreneurial spirit to the north is Canada Goose Holdings (TSX:GOOS)(NYSE:GOOS). From a small warehouse in Toronto, the retailer has grown into one of the world’s leading makers of luxury apparel, especially the high-quality Expedition Parka.
A brief history of growth
When the grandson of the founder took over as president and CEO in the late 90s, Canada Goose’s growth was ignited with a promise the company will remain “Made in Canada.” Many products were produced for diverse climates and high-intensity activities.
By 2014, Canada Goose significantly increased manufacturing capacity and hired 6% of the cut and sew labour industry in the country. The first two flagships stores — one in Toronto and the other in New York — opened in 2016. The company broke new ground the following year with the launching of wool garments, or Knitwear.
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The Artic Heritage lists on the TSX
The Toronto Stock Exchange (TSX) welcomed Canada Goose on March 16, 2017. On that day, the company was already the leading maker of Arctic luxury apparel. The day was also the start of the new phase of growth.
During that time, it was the largest retail IPO on the TSX. Canada started trading simultaneously on the TSX and NYSE. On the domestic exchange, the IPO price was set at $17 per share. In the U.S., it marked the second-biggest IPO debut for the year.
Canada Goose finally gained access to capital and liquidity to execute the strategies that will drive future success. The total amount raised from the sale of 20 million shares was $340 million. Prior to the IPO, revenue stood at $291 million with net income of $27 million.
The stock market was filled with excitement on the day the iconic Canadian brand debuted. At the close of the first trading session, GOOS finished at $21.53, or 26.65% higher than the IPO price. The trading volume reached 7,118,900.
GOOS’s price soared by 111.33% to $45.50 a year later. If an early investor sunk in $10,000 on IPO before and sold on that day, the investment more than doubled. Luckier are the investors who sold shares on November 16, 2018. The price flew to $92.18%, or a whopping 328.15% increase from the closing price on opening day.
GOOS’s current price is $56.85. Had you invested $10,000 on IPO day and are still holding the retailer’s stock today, your capital would have grown by 164.05%, or be worth an absolute amount of $26,405 after two years and four months.
The windfall you’ve earned indicates a very successful IPO for Canada Goose. However, the shares of the once super-high-growth company have pulled pack recently due to declining sales.
The drop created a decent value for investors to take a position. Canada Goose will rise again, as the company continues expanding to markets outside North America.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.
Fool contributor Christopher Liew has no position in any of the stocks mentioned.