Canada Goose Holdings Inc. is relying more and more on its own connections with consumers as its wholesale business contracts.
The company’s first-quarter direct to consumer revenues shot up 54 percent in constant currencies to 55.8 million Canadian dollars as its wholesale revenues fell by 19 percent in constant currencies to 27.1 million Canadian dollars. Overall revenues for the quarter ended July 2 increased by 21 percent, a 17.9 percent gain in constant currencies.
Canada Goose’s first-quarter net losses widened to 85 million Canadian dollars from 63.6 million Canadian dollars a year earlier. Adjusted losses also widened, to 73.1 million Canadian dollars from 58.8 million Canadian dollars.
Investors were satisfied enough and shares of the company inched up 1.6 percent to $17.40 in premarket trading.
Wholesale has been a weak spot for brands in general, as Vans parent VF Corp. demonstrated earlier in the week. Canada Goose said the decline in sales to other retailers were in line with expectations and were “due to continued streamlining of wholesale relationships as we optimize for greater DTC sales within our channel mix, partially offset by earlier shipments of orders to wholesale customers.”
Revenues were up by 24 percent in North America and ahead 52 percent in the Asia-Pacific region, but down 7 percent in Europe, the Middle East and Africa, with the decline there being attributed to wholesale.
“We kicked off the year with another strong quarter marked by healthy consumer demand for our products,” said Dani Reiss, chairman and chief executive officer, on a conference call with analysts.
Reiss said the company is devoting its energies toward three main initiatives – “driving consumer focused growth, building our DTC network, and expanding our product categories.”
“During the quarter, we grew the number of customers shopping in our stores across our major markets led by Asia Pacific, which doubled from the same period last year as traffic returned following the removal of COVID restrictions,” the CEO said. “We are focused on creating great customer experiences.
“In Q1, the number of women shopping with us grew in the high teens over the same period last year, while revenue share from Gen-Z increased slightly from an already strong base,” he said. “Within our overall mix, we continue to apply our longstanding playbook to remain top of mind and culturally relevant to our women and Gen-Z customer segment.”