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2 Outerwear Stocks to Warm Up Your Portfolio for the Winter
GOOSCanada Goose(GOOS) MarketBeat·2024-10-15 11:16

Canada Goose Overview - Canada Goose is a luxury outerwear brand known for its high-quality, durable, and fashionable products, including 1,800parkasthatrequireupto13productionsteps[2][3]−Thecompany′siconicSnowMantraparkawasoriginallydesignedforCanadianArcticworkersandisfield−testedattemperaturesaslowas−70°C[3]−CanadaGoosegeneratesthebulkofitsbusinessduringtheautumnandwinterseasons,withaloyalcustomerbasewillingtopaypremiumpricesforqualityproducts[3]FinancialPerformanceandStrategy−InfiscalQ12025,CanadaGoosereportedalossof1,800 parkas that require up to 13 production steps [2][3] - The company's iconic Snow Mantra parka was originally designed for Canadian Arctic workers and is field-tested at temperatures as low as -70°C [3] - Canada Goose generates the bulk of its business during the autumn and winter seasons, with a loyal customer base willing to pay premium prices for quality products [3] Financial Performance and Strategy - In fiscal Q1 2025, Canada Goose reported a loss of 0.79 per share but beat consensus estimates by a penny, with revenues growing 4% YoY to 88.1million[5]−Direct−to−consumer(DTC)revenuegrew1388.1 million [5] - Direct-to-consumer (DTC) revenue grew 13% YoY to 63.1 million, driven by strong Asia Pacific sales, while wholesale revenues plunged 41% to 16million[5]−Thecompanyplanstoincreasepricesbyamid−single−digitpercentageinfiscal2025andexpectsDTCcompsalestogrowinthelowsingledigitsYoY[6]−CanadaGooseisexpandingitsretailfootprintwiththreenewstoresandfourconcession−basedstore−in−stores,contributingtoincrementalrevenuegrowth[6]MarketPositionandInitiatives−CanadaGoosehasintroducedatrade−inprogram,allowingcustomerstotradeinusedgarmentsforgiftcardcredits,withresolditemsdiscountedupto5016 million [5] - The company plans to increase prices by a mid-single-digit percentage in fiscal 2025 and expects DTC comp sales to grow in the low single digits YoY [6] - Canada Goose is expanding its retail footprint with three new stores and four concession-based store-in-stores, contributing to incremental revenue growth [6] Market Position and Initiatives - Canada Goose has introduced a trade-in program, allowing customers to trade in used garments for gift card credits, with resold items discounted up to 50% [4] - The company is focusing on elevating the quality of its wholesale partners and reducing inventory, which fell 7% YoY to 484.3 million [5] - China's stimulus plan could boost sales, with the opening of two permanent stores in Wuhan and Macau, bringing the total store count to 70 [7] VF Corporation Overview - VF Corporation operates 11 outdoor apparel and footwear brands, including The North Face, VANS, Timberland, and Dickies [7][8] - The company sold its Supreme brand for 1.5billionandisconsideringfurtherbrandsalesaspartofitsReinventturnaroundstrategy[8]FinancialPerformanceandStrategy−VFCorporationpostedanEPSlossof1.5 billion and is considering further brand sales as part of its Reinvent turnaround strategy [8] Financial Performance and Strategy - VF Corporation posted an EPS loss of 0.33 and an 8.9% YoY revenue decline in fiscal Q1 2025 but beat analyst expectations [10] - The North Face sales fell 3%, while global DTC brands saw a 6% YoY improvement, and VANS revenue declined 21% YoY but showed sequential improvement [10] - VF Corporation reiterated its free cash flow guidance of approximately $600 million, including proceeds from the Supreme sale [11] Reinvent Strategy - VF Corporation's Reinvent strategy focuses on streamlining operations, investing in brand building, cutting costs, and revitalizing the VANS brand [9] - The company is also strengthening its balance sheet and conducting a strategic review of its brand portfolio, with potential sales of underperforming brands [9]