Market Overview - U.S. equities are experiencing a midday retreat on November 6, 2025, influenced by corporate earnings reports and the ongoing government shutdown [1][2] - The S&P 500 has slipped 0.4%, the Dow Jones Industrial Average has fallen by 185 points (0.4%), and the Nasdaq Composite is down 0.7%, with tech sector losses nearing 2% [2] Economic Context - The U.S. government shutdown has resulted in a lack of official economic data, creating uncertainty for investors and the Federal Reserve [3] - Federal Reserve officials are hesitant to proceed with rate cuts without reliable inflation data, leading to a decrease in Wall Street's forecast for a December interest rate cut from over 90% to 69% [3] Corporate Earnings Highlights - DoorDash (DASH) shares fell 14% after announcing higher product development spending despite beating revenue estimates [5] - Datadog (DDOG) surged 22.4% following an earnings report that exceeded analysts' forecasts [5] - Rockwell Automation (ROK) rose 5.7% after delivering strong results [5] Additional Company News - Western Union (WU) projected a 20% revenue improvement and 30% growth in adjusted earnings per share over the next three years [6] - Hyatt Hotels Corporation (H) reported a 0.3% increase in comparable system-wide RevPAR but posted a net loss of $(49) million [6] - Canada Goose Holdings Inc. (GOOS) announced strong second-quarter results with a 10% increase in comparable sales growth [6] - Fujifilm Holdings Corporation (FUJIY) reported a 3.8% revenue increase and a 16.9% rise in operating income, leading to an upward revision of its full-year forecast [6] Market Sentiment - Today's midday trading reflects cautious sentiment as investors weigh corporate performance against broader economic uncertainties stemming from the government shutdown and the Federal Reserve's cautious stance on future rate adjustments [8]

Financial Data and Key Metrics Changes - Revenue for Q2 was CAD 273 million, a 2% increase from CAD 268 million in Q2 of the previous year, but down 1% on a constant currency basis [13] - Adjusted net loss attributable to shareholders was CAD 13 million, or CAD 0.14 per share, compared to a profit of CAD 5 million, or CAD 0.05 per share in Q2 of fiscal 2025 [21] - Gross margin expanded 110 basis points year-over-year to 62.4%, primarily due to a favorable channel mix [18] Business Line Data and Key Metrics Changes - Direct-to-consumer (D2C) revenue increased by 21%, with comparable sales growth of 10%, led by North America and APAC [14] - Wholesale revenue decreased by 5%, in line with expectations, as the company focuses on elevating brand positioning [15] - Revenue from other channels totaled CAD 10 million, down from CAD 27 million last year, reflecting a pullback in activities [16] Market Data and Key Metrics Changes - In North America, D2C comparable sales grew in the low teens, but overall regional revenue was down 8% year-over-year due to a shift in channel mix [16] - APAC revenue increased by 20%, driven by growth in both D2C and wholesale channels, with mainland China leading the way [17] - EMEA revenue was down 7% year-over-year, with strong performance on the continent but challenges in the U.K. market [17] Company Strategy and Development Direction - The company is focused on expanding product offerings to enhance year-round relevance, with new products driving notable growth in the D2C channel [5] - Marketing investments are aimed at building brand heat and cultural relevance, with new collaborations and campaigns enhancing consumer engagement [6] - The company is strategically developing channels to deliver an elevated experience, with a focus on disciplined retail execution and store network expansion [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the direction and foundation for long-term growth, highlighting strong D2C performance and positive indicators for the second half of the year [10] - The company is entering its peak season well-positioned, with a clear focus on translating progress into sustained profitable growth and stronger margins [10] - Management acknowledged that while SG&A expenses are higher due to investments, they are focused on operating margin expansion moving forward [13] Other Important Information - Inventory was CAD 461 million, down 3% from last year, reflecting stronger consumer demand and tighter inventory management [21] - The company successfully amended its term loan, extending the maturity until 2032, which solidified its capital structure [22] Q&A Session Summary Question: What initiatives are prioritized to sustain DTC comp sales momentum? - Management highlighted better staff training, sharper channel execution, and increased product newness as key factors driving DTC success [26][27] Question: Any thoughts on U.K. softness or other cautious regions? - Management noted that the U.K. softness is consistent with trends seen across many brands, while continental Europe remains strong [31] Question: Can you discuss the confidence in sustaining comp momentum across regions? - Management expressed encouragement from consistent performance across markets and emphasized the importance of new product offerings [35] Question: What factors will drive changes in margin performance? - Management indicated that positive comps, effective investment returns, and disciplined cost management are critical for margin improvement [39]

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]