Core Insights - Canada Goose reported a quarterly loss of $0.1 per share, missing the Zacks Consensus Estimate of a loss of $0.04, and compared to earnings of $0.04 per share a year ago, indicating an earnings surprise of -150.00% [1] - The company posted revenues of $197.96 million for the quarter ended September 2025, missing the Zacks Consensus Estimate by 4.55%, but showing a slight increase from year-ago revenues of $196.32 million [2] - Canada Goose shares have increased approximately 41.1% since the beginning of the year, outperforming the S&P 500's gain of 15.6% [3] Earnings Outlook - The earnings outlook for Canada Goose is mixed, with the current consensus EPS estimate for the coming quarter at $1.21 on revenues of $467.51 million, and $0.81 on revenues of $1.05 billion for the current fiscal year [7] - The company's Zacks Rank is currently 3 (Hold), indicating expected performance in line with the market in the near future [6] Industry Context - The Retail - Apparel and Shoes industry, to which Canada Goose belongs, is currently in the top 22% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% of industries [8] - Genesco, another company in the same industry, is expected to report quarterly earnings of $0.90 per share, reflecting a year-over-year change of +47.5% [9]

Financial Performance - Revenue increased by 2% year-over-year to $272.6 million, but decreased by 1% on a constant currency basis[31] - Gross profit increased to $170.1 million, with a gross margin of 62.4%, up 110 basis points year-over-year[47, 48] - The company reported a net loss attributable to shareholders of $15.2 million, compared to a net income of $5.4 million in the same quarter last year[47] - Adjusted EBIT was a loss of $14.2 million, compared to a profit of $2.5 million in the prior year[47] Channel Performance - DTC revenue increased by 22% year-over-year (21% in constant currency) to $126.6 million[32, 39] - DTC comparable sales growth was 10% year-over-year, marking ten consecutive months of positive comps[27, 32, 39] - Wholesale revenue decreased by 1% year-over-year (5% in constant currency) to $135.9 million[34, 39] - Other revenue decreased significantly by 62% year-over-year (63% in constant currency) to $10.1 million, due to fewer events and employee sales[32, 34, 37] Geographic Performance - Asia Pacific revenue increased by 20% year-over-year (20% in constant currency) to $79.3 million[41, 46] - North America revenue decreased by 7% year-over-year (8% in constant currency) to $112.1 million[41, 46] - EMEA revenue increased by 1% year-over-year (-7% in constant currency) to $81.2 million[41, 43] Balance Sheet - Inventory levels decreased by 3% year-over-year[50, 51] - Net debt decreased year-over-year to $707.1 million[50, 51]

Core Insights - Canada Goose reported a 1.8% increase in total revenue to CAD 272.6 million for the second quarter of fiscal 2026, with direct-to-consumer (DTC) revenue growing by 21.8% to CAD 126.6 million, driven by a 10.2% increase in DTC comparable sales [3][9] - The company experienced an operating loss of CAD 17.6 million, compared to an operating income of CAD 1.6 million in the prior year, primarily due to increased selling, general, and administrative (SG&A) expenses [3][9] - Net loss attributable to shareholders was CAD 15.2 million, or CAD 0.16 per share, compared to a net income of CAD 5.4 million, or CAD 0.06 per share, in the same quarter last year [9][20] Business Highlights - The launch of the Fall/Winter 2025 collection emphasized modern urban storytelling and bold designs, enhancing brand engagement through partnerships, including a collaboration with NBA MVP Shai Gilgeous-Alexander [2][3] - The company relocated its Paris store to Champs-Élysées, enhancing the consumer experience with a new design and curated selections from its art collection [3] - Canada Goose opened one new store during the quarter, bringing the total permanent store count to 77 [3] Financial Performance - DTC revenue growth was attributed to improved execution, a stronger mix of in-season products, and consistent marketing efforts [3] - Wholesale revenue decreased by 1.0% to CAD 135.9 million, aligning with revenue from the comparative quarter [3] - Other revenue saw a significant decline of 62.0% to CAD 10.1 million, primarily due to fewer Friends & Family events and employee sales [3] Balance Sheet and Debt Management - Inventory decreased by 3% year-over-year to CAD 460.7 million, reflecting higher demand and proactive inventory management [4] - The company ended the quarter with net debt of CAD 707.1 million, down from CAD 826.4 million a year earlier, due to disciplined working capital management and cash generated from operations [5] Corporate Governance - Stephen Gunn retired from the Board of Directors, and Belinda Wong was appointed as an audit committee financial expert [6] Shareholder Returns - Canada Goose announced an early renewal of its normal course issuer bid (NCIB), allowing for the purchase of up to 4,578,677 subordinate voting shares over the next twelve months [7][8]

Core Insights - Canada Goose (GOOS) and MINISO Group Holding Limited (MNSO) are being compared as potential undervalued stocks in the retail apparel and shoes sector [1] - GOOS has a stronger Zacks Rank of 2 (Buy) compared to MNSO's 4 (Sell), indicating a more favorable earnings outlook for GOOS [3] Valuation Metrics - GOOS has a forward P/E ratio of 13.03, while MNSO's forward P/E is 15.70, suggesting that GOOS may be undervalued relative to MNSO [5] - The PEG ratio for GOOS is 0.96, indicating better expected earnings growth relative to its price compared to MNSO's PEG ratio of 1.11 [5] - GOOS has a P/B ratio of 3.94, which is lower than MNSO's P/B ratio of 4.46, further supporting the argument that GOOS is a more attractive value option [6] Earnings Outlook - GOOS is noted for its improving earnings outlook, which enhances its attractiveness as a value investment [7]

Group 1 - Canada Goose, a 60-year-old Canadian down jacket brand, is potentially being acquired by Chinese private equity firm Boyu Capital for $1.35 billion (approximately 9.6 billion RMB) [1] - The brand gained immense popularity in China after opening its first stores in Beijing and Shanghai eight years ago, with long queues forming in cold weather for its products [3] - Despite high prices, with jackets often exceeding 10,000 RMB, Canada Goose has faced challenges, including a significant market value drop of over $1.1 billion within a year after its IPO [4] Group 2 - In 2022, Canada Goose's performance surged by 30%, largely attributed to Chinese consumers, prompting the CEO to emphasize the importance of the Chinese market for profitability [4] - Controversies arose when it was revealed that 80% of the down used in their jackets was duck down, contrary to consumer expectations for high-end products typically made with goose down [6] - The brand's refusal to adopt a global return policy in China, opting instead for a no-return policy, led to consumer backlash and dissatisfaction [6] Group 3 - Sales growth in China stagnated in 2023, forcing Canada Goose to open stores in outlet malls, which negatively impacted its luxury brand image [7] - Canada Goose was originally a niche brand catering to mountaineers and polar explorers before being transformed into a global luxury brand after being acquired by Bain Capital in 2013 [9] - The decline of Canada Goose reflects a shift in international brands' attitudes towards the Chinese market and highlights the rise of domestic competitors like Bosideng and Arc'teryx [10] Group 4 - A potential acquisition by Chinese investors may not be detrimental for Canada Goose, as nearly half of its stores are located in China, and local companies have successfully operated international brands [10] - The future success of Canada Goose will depend on its ability to adapt and understand the Chinese market, moving away from previous arrogance [10]

Company Overview - Envela Corporation (ELA) is part of the Retail-Wholesale group, which consists of 201 companies and is currently ranked 11 in the Zacks Sector Rank [2] - The company belongs to the Retail - Jewelry industry, which includes 6 stocks and is ranked 210 in the Zacks Industry Rank [5] Performance Metrics - Year-to-date, Envela Corporation has returned approximately 12.8%, outperforming the average return of 9.2% for the Retail-Wholesale sector [4] - The Zacks Consensus Estimate for Envela's full-year earnings has increased by 16.7% over the past quarter, indicating improved analyst sentiment and earnings outlook [3] Comparison with Peers - Canada Goose (GOOS), another stock in the Retail-Wholesale sector, has seen a year-to-date increase of 36.5% and has a Zacks Rank of 2 (Buy) [4][5] - The Retail - Jewelry industry, which includes Envela, has gained about 12.4% this year, showing that Envela is performing better than its industry peers [5] - In contrast, the Retail - Apparel and Shoes industry, which includes Canada Goose, has declined by 6.8% year-to-date [6]

Company Performance - Canada Goose (GOOS) closed at $14.04, reflecting a -4.03% change from the previous day, underperforming the S&P 500's daily loss of 0.05% [1] - Over the past month, shares of Canada Goose have increased by 31.45%, while the Retail-Wholesale sector gained 4.45% and the S&P 500 gained 3.44% [1] Upcoming Earnings - The upcoming earnings release is highly anticipated, with projected EPS at -$0.05, indicating a 225.00% decline compared to the same quarter last year [2] - Revenue is expected to reach $208.8 million, representing a 6.36% increase from the year-ago quarter [2] Full Year Estimates - For the full year, analysts expect earnings of $0.99 per share and revenue of $1.05 billion, marking increases of +23.75% and +8.22% respectively from the previous year [3] - Recent modifications to analyst estimates are crucial as they reflect near-term business trends, with positive revisions indicating a favorable business outlook [3] Valuation Metrics - Canada Goose has a Forward P/E ratio of 14.85, which is lower than the industry average of 19.49, suggesting it is trading at a discount [6] - The company has a PEG ratio of 1.1, compared to the Retail - Apparel and Shoes industry average PEG ratio of 2.32, indicating a more favorable valuation relative to growth expectations [7] Industry Context - The Retail - Apparel and Shoes industry is part of the Retail-Wholesale sector and currently holds a Zacks Industry Rank of 147, placing it in the bottom 41% of over 250 industries [8] - The Zacks Industry Rank evaluates the strength of industry groups, with the top 50% rated industries outperforming the bottom half by a factor of 2 to 1 [8]

Financial Data and Key Metrics Changes - The company reported a revenue increase of 22% year-over-year, supported by a 15% comparable store sales growth [8] - Gross margin stands at 70%, with operating margins approximately 40% in direct-to-consumer (D2C) and 33% in wholesale [5][6] - The company has achieved a compound annual growth rate (CAGR) of 16% over the past eight years, growing from approximately $400 million to $1.35 billion in revenue [3] Business Line Data and Key Metrics Changes - The business model has evolved to approximately 75% D2C, with 25% from e-commerce and 20% from wholesale [4] - The company is focusing on expanding luxury products into year-round categories, moving beyond its historical parka offerings [7][14] - Significant investments in product development and merchandising have led to improved product variety and consumer engagement [14][22] Market Data and Key Metrics Changes - The North American market has shown strong performance, with positive comparable sales growth for seven months [39] - The company has seen a reacceleration in its China business, attributed to effective store execution and product evolution [43][44] - The wholesale channel is stabilizing, with a cleaner inventory position and improved relationships with key partners [35][36] Company Strategy and Development Direction - The company is focused on four operating imperatives: expanding luxury product offerings, increasing brand recognition through marketing, improving DTC performance, and maintaining operational efficiency [6][7] - There is a strong emphasis on product innovation and marketing consistency to enhance brand relevance and consumer engagement [17][63] - The company aims to leverage its USMCA compliance to benefit from tariff disruptions, positioning itself favorably against competitors [45] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding consumer behavior, noting mixed sentiment in the luxury market but strong performance for the brand [40][42] - The company is committed to long-term investments in marketing and product development, even if it temporarily impacts profit margins [57][58] - There is confidence in returning to historical margin levels through scale and efficiency improvements [60] Other Important Information - The company is actively working on enhancing retail execution and has seen positive results in store productivity, with a current productivity metric of CAD 4,000 per square foot [31][27] - Recent media speculation regarding a potential take-private transaction was dismissed as rumors, with no current plans for such actions [61] Q&A Session Summary Question: What have been the most impactful strategic initiatives? - The company highlighted product evolution, retail execution improvements, and enhanced marketing efforts as key drivers of recent momentum [13][17] Question: What should be expected from the new Creative Director in year two? - The focus will be on accelerating style, relevance, and innovation in product offerings, with ongoing investments in merchandising and design capabilities [18][20] Question: How is the health of the wholesale channel? - The wholesale channel is stabilizing, with a cleaner inventory position and improved product assortment, indicating potential for future growth [32][35] Question: What is the outlook for North America and consumer health? - The North American market is performing well, but there is caution regarding overall consumer sentiment in the luxury sector [39][40] Question: How does the company plan to manage pricing and tariffs? - The company plans to make strategic pricing adjustments while focusing on product desirability and relevance rather than solely on tariff impacts [45][50]

Core Viewpoint - Canada Goose, originally established in 1957, has evolved from producing cold-weather gear for Arctic workers to becoming a luxury brand known for its high-priced down jackets, often referred to as the "Hermès of down jackets" [3][4]. Group 1: Brand Evolution and Market Position - In the 1970s, Canada Goose focused on down jackets and gained recognition after explorers wore its parkas to summit Mount Everest [4]. - The brand underwent a significant transformation after Bain Capital acquired a controlling stake for $250 million in 2013, expanding its product line from 20 to 200 styles and moving into everyday wear [4]. - Canada Goose's pricing strategy, with jackets averaging $900, has positioned it closer to the luxury market, and its distinctive Arctic logo has become highly recognizable [4]. Group 2: Challenges and Market Dynamics - In 2021, Canada Goose faced controversies in China regarding product quality and advertising, leading to a decline in brand image and sales growth, with annual sales growth dropping from 21% to 1% [5]. - Despite these challenges, the latest quarterly report showed an 18.7% year-on-year revenue increase in the Greater China region for April to June 2025, attributed to the brand's efforts to diversify its product offerings beyond seasonal down jackets [5][6]. Group 3: Product Diversification and Sales Strategy - Canada Goose has been actively expanding its product categories since 2018, acquiring footwear manufacturers and knitwear factories, which has allowed it to introduce items like wool sweaters and sunglasses [6]. - The introduction of lower-priced items, such as T-shirts priced at 1,700 yuan, has made the brand more accessible and increased purchase frequency throughout the year [6]. - The brand's direct-to-consumer (DTC) sales have seen a 24% year-on-year increase, with DTC sales accounting for 70% of total revenue, particularly strong in the Greater China region [9]. Group 4: Production and Supply Chain Considerations - Canada Goose maintains a vertically integrated manufacturing system, producing most of its products in Canada, which is seen as a core competitive advantage [10]. - The company has begun producing 20% of its products in Europe, which introduces new supply chain challenges, particularly for its year-round product lines that require more frequent updates [11]. Group 5: Future Outlook and Ownership Changes - Bain Capital, which holds over 60% of Canada Goose's voting shares, is reportedly considering selling its stake, reflecting uncertainties about the brand's future growth [12]. - Despite recent revenue growth, Canada Goose is still facing losses, with net losses increasing by nearly 70% year-on-year, prompting the company to withdraw its annual revenue guidance [12].

Group 1 - The core viewpoint of the news is that both Bosideng and Anta have denied any plans to acquire the down jacket brand Canada Goose, amidst reports of potential sales by its major shareholder Bain Capital [1][5] - Bain Capital is reportedly seeking to sell its stake in Canada Goose, with Boyu Capital having made a verbal offer and Advent International in discussions with Bain [1] - Other potential buyers mentioned include Bosideng International and a consortium formed by FountainVest and Anta Sports [1]