How Did Canada Goose Develop In China For Over A Year?

The international down jacket brand Canada Goose (CanadaGoose) recently announced the 2019/2020 financial year third quarter financial report. Data show that as of December 29th last year, the brand's net sales increased by 13.2% to 452 million Canadian dollars, of which Asia became the fastest growing market. Canadian goose has been entering the Chinese market for over a year. How is it developing?

According to the results of the report, the net profit per diluted share of canadian goose has increased by 12.5% to 1.08 Canadian dollars per year during the reporting period, with gross profit of 298 million Canadian dollars and gross margin of 66%. Regionally, the growth rate of net sales in Asia ranked first, up 107.5% from the previous year to 94 million 700 thousand Canadian dollars. The net sales in Canada's local market were 131 million Canadian dollars, down 11.6% compared to the same period last year. The net sales in the US market were 143 million yuan, up 10% compared with the same period last year, and the net sales in Europe and other regions were 84 million Canadian dollars, up 11.9% over the same period last year.

In addition, the canadian goose has cut the company's full year expectations for fiscal year 2020, affected by the new crown pneumonia epidemic. The company said that the epidemic is expected to cause a serious decline in passenger traffic and trading volume. The online business of the Greater China region in the fourth quarter of this fiscal year is likely to decline. Canada goose expects net sales in fiscal year 2020 to be 945 million -9.55 billion yuan, up by 13.8%-15.0% compared to the previous period, lower than previously expected. After adjustment, net profit per diluted share increased by 0.7% or 2.2% to 1.33-1.37 Canadian dollar compared with the previous year, after which it expected to grow by at least 25%.

In fact, canadian goose has been attracting much attention since its high-profile entry into the Chinese market in the second half of 2018. Data show that last year's "double 11" period, Canada goose in Tmall official flagship store within an hour turnover of more than 10 million yuan, Tmall luxury platform has become one of the best selling brands. Previously, Canada goose said it plans to open another three stores in China in fiscal year 2020.

Despite the good performance of Canadian geese in the Chinese market, a number of research institutions have reduced their ratings. It is reported that Wells Fargo Bank, Bank of America, DADavidson and Cowen&Co and other institutions in the near future lowered the rating of Canada goose, at the same time, lowered the company's target price.

In an interview with the China Daily News reporter, a garment retail industry analyst said that after the Canadian geese entered the Chinese market, they met some consumers' demand for high-end down garments. At the same time, canadian goose and Moncler can stimulate the development of domestic down garment brand. However, most of the consumer demand for Chinese down garments is still in the middle end market. The price of canadian goose counters and official flagship stores is relatively high, and many consumers will choose to buy on behalf of the purchase, sea and other channels. Coupled with the development of the domestic down jacket giant Bosteng in the high-end market, it remains to be seen whether the canadian goose can continue to grow in China in the long run.