Luxury retailer Canada Goose posts surprise profit on steady China demand, cost controls
Adds executive comment from conference call in paragraph 5, background in paragraph 8
Nov 7 (Reuters) -Canada Goose Holdings GOOS.TO, GOOS.N posted a surprise quarterly profit and beat Wall Street estimates for revenue on Thursday, driven by resilient demand for its luxury parkas in China and a tight leash on costs.
The robust performance in China contrasts with those from bigger luxury brands such as Gucci-owner Kering PRTP.PA and LVMH LVMH.PA as economic weakness has curbed customer buying across a broad range of companies.
U.S. luxury retailer Estee Lauder EL.N pulled its annual forecasts and cut its dividend last week on an uncertain outlook in China.
Canada Goose's second-quarter revenue rose 5.7% in Greater China, with the company also highlighting positive comparable sales last month due to some early singles day sales and the opening of a channel on Chinese platform Douyin.
Store openings in China have continued as planned despite the macro challenges, a company executive said on a post-earnings call.
Toronto and U.S.-listed shares of the company were up about 2% in morning trading.
Revenue in North America declined 2.4% in the quarter, after a 2.9% fall in the prior three-month period.
The company has also diversified away from its parkas that can retail for more than $1,000 to non-winter category such as rain and warm weather clothing.
Excluding one-off items, it posted a profit of 5 Canadian cents per share, compared with analysts' average estimate for a loss of 5 Canadian cents, according to data compiled by LSEG.
Selling, general and administrative expenses fell about 8% to C$162.5 million due to a cost-savings program that involved job cuts.
Still, the Ontario-based company tempered its fiscal 2025 revenue expectations due to the weak U.S. spending on luxury goods.
It now expects fiscal 2025 revenue to range from a low-single-digit decline to a low-single-digit increase, compared with its previous forecast of a low-single-digit growth.
Canada Goose said second-quarter revenue fell to C$267.8 million ($193 million) from C$281.1 million a year earlier. Analysts on average had expected C$260.2 million.
($1 = 1.39 Canadian dollars)
Reporting by Aatrayee Chatterjee in Bengaluru; Editing by Sriraj Kalluvila
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