Canada Goose lowers sales outlook due to China's recovery and announces new CFO

Canada Goose Holdings Inc. has seen a record-setting decline in its shares, dropping for 11 consecutive days after the company reduced its earning prediction for the fiscal year due to large-scale economic challenges. On Wednesday, Canada Goose's stock plunged to a new intra-day low of C$13.60 ($9.80) after it adjusted its fiscal year total revenue forecast to somewhere between C$1.2 billion and C$1.4 billion. This is notably lower than the average expectation of analysts, who predicted a total revenue of C$1.42 billion. Previously, the company had projected a range of C$1.4 billion to C$1.5 billion.

The corporation also revised the lower boundary of its earnings predictions, bringing it down to a range between C$0.60 and C$1.40 per share. This action was taken in response to what it described as a “difficult retail climate”. It's worth noting that Canada Goose reported an adjusted earning of C$0.16 per share, which surpassed Bloomberg analysts' expectation of a loss of C$0.22 per share.

Mark Petrie, an analyst at CIBC Capital Markets, mentioned in a client note that the management did not provide any details on the trends for October but he expected the slow momentum to persist. October proved to be a tough month for Canada Goose, as its shares dropped around 23% due to less-than-ideal economic reports from China. China is a significant market for the retailer and this downturn compounded pre-existing doubts regarding the company's sales. Analysts also expressed concern over predictions of milder winter weather, leading firms such as TD Securities and Wells Fargo to downgrade the company’s shares.

In an internal reshuffle, Neil Bowden is set to be promoted to Chief Financial Officer from his current position as Deputy CFO. This change is set to take effect from April 1, 2024. The outgoing CFO, Jonathan Sinclair, has been appointed as the president of operations in the Asia Pacific region. Consequently, the company’s shares fell by up to 11.6% in Toronto's early trading hours on Wednesday.