Canada Goose Holdings Inc. (GOOS) experienced a significant pre-market decline of 6.28% following the release of its fiscal third-quarter financial results. The luxury outerwear company reported earnings that fell short of analyst expectations, prompting a negative reaction from investors.
The company posted adjusted earnings per share of CA$1.43, missing the FactSet consensus estimate of CA$1.65. In U.S. dollar terms, the adjusted EPS was $1.03, below the $1.14 estimate. While quarterly sales of CA$694.5 million surpassed the CA$659.1 million forecast, the profit decline overshadowed the revenue beat.
Canada Goose's profit slipped due to increased marketing spending and one-time charges, including a bad debt charge related to a U.S. wholesale partner. The company's gross margin also slightly decreased to 74% from 74.4% a year earlier. These higher costs, despite strong direct-to-customer revenue growth of 14%, led to the earnings disappointment and subsequent stock price decline in pre-market trading.