Canada Goose Widens Q2 Loss as EMEA Sales Fall Nearly 14 Percent

Canada Goose Holdings posted a net loss of 18.8 million Canadian dollars for its second quarter, widening from a 15.2 million dollar loss a year earlier, as a 13.9 percent revenue decline in Europe, the Middle East and Africa offset growth in North America and Greater China.

Revenues for the 13 weeks ended Sept. 27 rose 5.9 percent to 274 million dollars, equal to a 4.9 percent gain in constant currencies, the Toronto-based outerwear company reported. Adjusted losses reached 20 cents a share — two cents deeper than the 18-cent deficit analysts had forecast, according to Yahoo Finance consensus data. The company reports in Canadian dollars but trades in U.S. dollars on the New York Stock Exchange and provides per-share figures on that basis.

Where the growth and the shortfall sit

The regional split defines the quarter:

• North America: sales up 7.5 percent in constant currencies
• Greater China: up 28.2 percent
• EMEA: down 13.9 percent

Chief Executive Officer Dani Reiss attributed the EMEA shortfall to two forces: the broader luxury slowdown in the region and a disruption the company created itself. "Some temporary product availability issues as we implemented our new logistics network. So that was a little self-inflicted," Reiss said of the European weakness.

The logistics transition is a supply-chain variable vendors and wholesale partners will watch in coming quarters. Reiss framed the disruption as temporary, but the company did not quantify the revenue impact of the network changeover or specify when availability would normalize.

What did conversion data show?

In an interview, Reiss said store traffic was "a bit softer" — a pattern he called part of a wider macro trend — but argued the customers who did come through the door spent more.

"When customers came into our stores and engaged with us, they bought more products and we were able to convert at a much higher rate," Reiss said. "E-commerce comps were positive. So customers are responding to us. Our products are resonating and our service and our experience is resonating and obviously driving some more traffic is important."

Those conversion and e-commerce claims come from management commentary rather than disclosed figures; the company did not publish specific conversion-rate or digital comp numbers in the release.

Is the parka dependency actually shrinking?

Reiss said the brand's diversification beyond cold-weather outerwear continues to build. "We're a year-round brand now," he said. "Apparel, rainwear, wind wear — they all delivered strong double-digit growth, becoming a much larger part of our product mix."

He specified that the expansion extends beyond technical product into casual categories, including hoodies and knitwear. Management did not break out apparel revenue as a percentage of total sales.

For the full year, Canada Goose guided to a low-single-digit revenue increase with adjusted earnings before interest and taxes margins of 11 to 12 percent.

The guidance implies management expects the EMEA drag — both the luxury malaise and the self-described self-inflicted logistics disruption — to ease, while Greater China's 28.2 percent growth pace carries the top line.