Canada Goose (TSX: GOOS) is a Toronto-based company that designs, manufactures, and sells performance luxury apparel for men, women, youth, children, and babies in Canada, the United States, Asia Pacific, Europe, and many other regions around the globe. Today, I want to discuss whether this top luxury clothing TSX stock is a worthy investment in the first half of the summer of 2023. Moreover, I want to explore where the brand is headed. Let’s dive in.
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How has Canada Goose stock performed over the past year?
Shares of Canada Goose stock have climbed 7.2% month over month as of close on Wednesday, July 19. This luxury clothing TSX stock is still down 1.2% so far in 2023. Its shares are also down 4.3% in the year-over-year period. Investors can see more of its recent performance with the interactive price chart below.
Should investors be happy with this company’s recent results?
This company released its fourth-quarter (Q4) and full-year fiscal 2023 earnings on May 18. In Q4, Canada Goose achieved revenue growth of 31% to $293 million. Meanwhile, its net loss improved by 65% to $3.1 million. It also posted a diluted earnings per share (EPS) loss of $0.03, which was improved from a diluted EPS loss of $0.09 in the fourth quarter of fiscal 2022.
EBIT stands for earnings before interest and taxes. Canada Goose delivered adjusted EBIT of $27.6 million in Q4. That was up a whopping 122% compared to adjusted EBIT of $12.4 million that it reported in the prior year.
For the full year, Canada Goose reported total revenue of $1.21 billion — up from $1.09 billion in fiscal 2022. Moreover, it posted net income of $72.7 million, or $0.69 per diluted share. That is down from $94.6 million, or $0.87 per diluted share, in the previous year. Adjusted EBIT improved marginally to $175 million compared to $171 million in fiscal 2022.
Where is the brand headed for the future?
Canadian investors should be drawn to the luxury apparel market, even in the face of macroeconomic turbulence. Back in 2019, Grand View Research projected that the global luxury apparel market would deliver a compound annual growth rate (CAGR) of 3.5% through to 2025. That would cap out the market at US$84.0 billion by the end of the period.
In fiscal 2023, Canada Goose continued to benefit in a big way from its concerted push into the Asia Pacific. The brand remains very strong in this region, and sales have been rock solid, despite fears that geopolitical tensions between Canada and China could have an impact. Indeed, the Asia Pacific region achieved revenue growth of 65% in Q4.
The company has put forth a strategic plan that will run to fiscal 2028. Canada Goose aims to “accelerate consumer-focused growth” with a focus on women consumers and Generation Z. Meanwhile, it has pushed to build its direct-to-consumer (DTC) network as it aims to double its retail footprint from the current count of 51 permanent stores.
Canada Goose has also made a successful push to branch beyond its down coats and jackets. At the end of fiscal 2023, the company reported that non-heavy-weight down sales rose to 42.9% compared to 38.5% at the end of fiscal 2022. The company hopes to continue this streak as it expands its luxury clothing offerings into the summer season with offerings like sneakers, eyewear, and luggage.
Canada Goose stock: Should you buy today?
Shares of Canada Goose stock are trading in favourable value territory compared to its industry peers at the time of this writing. Meanwhile, the company is on track for very strong earnings growth in the quarters to come. Canada Goose boasts a fantastic balance sheet that should keep investors confident in its future.
