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Markets News

UPDATE 3-Canada Goose sees fresh lockdowns crimping Europe sales

(Adds comments on European business from conference call, CFO quote; Updates shares)

Nov 5 (Reuters) - Canada Goose Holdings Inc warned of a hit to sales in Europe for its luxury parkas as countries reimpose lockdowns to curb a resurgence in virus cases, overshadowing a surprise quarterly profit on strong China and online demand.

The company’s shares fell as much as 3.5% on Thursday after the comments during a conference call, reversing from a gain of about 5% at the open.

Several global luxury players have signaled a recovery in demand, largely driven by a rebound in China, but now face the threat of disruption in major markets such as France and England due to new shutdowns.

“(Progress in China) helped us manage our expectations in terms of what we might expect to see elsewhere in the world,” Chief Financial Officer Jonathan Sinclair said on the call.

“Obviously, that gets interrupted where you get local lockdowns as we’re experiencing right now in Europe.”

Canada Goose said restrictions on international travel have also hurt sales at its stores around the world where affluent Chinese tourists shop, but new stores in the country and a ramp-up of its online presence have helped cushion the blow.

These efforts helped the company post an over 30% jump in direct-to-consumer revenue in Mainland China in the second quarter ended Sept. 27, while enabling overall online sales to climb more than 10%.

Total revenue slumped about 34% to C$194.8 million ($148.52 million), but beat the average analyst estimate of C$167.2 million, according to IBES data from Refinitiv.

Excluding items, it earned 10 Canadian cents per share, as its adjusted earnings before interest and taxes margin was positive for the first time since the onset of the pandemic. Analysts were expecting a loss of 1 Canadian cent.

$1 = 1.3116 Canadian dollars Reporting by Praveen Paramasivam in Bengaluru; Editing by Sriraj Kalluvila

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