Canada Goose Holdings trimmed its annual profit forecast and missed quarterly revenue estimates on Thursday due to choppy sales in key luxury goods market China, sending its U.S.-listed shares down 6 per cent in premarket trading.
Weak consumer spending in China, which is grappling with youth unemployment and a property crisis, has been a major concern for the luxury goods industry and has slowed demand recovery in the region, significantly impacting brands such as Canada Goose.
U.S. luxury retailer Estee Lauder, which bet on China, expanded a restructuring plan on Tuesday that involves up to 7,000 job cuts as the cosmetics giant grapples with persistent demand weakness, especially in Asia.
Toronto, Ontario-based Canada Goose saw revenues in Greater China drop by 4.7 per cent, compared to the previous quarter’s 5.7 per cent jump.
It expects fiscal 2025 adjusted profit of flat to low-single-digit percentage growth, compared to its previous forecast of a mid-single-digit rise.
The company’s third-quarter revenue fell to C$607.9 million (US$423.59 million), from C$609.9 million a year earlier.
Analysts on average had expected revenue of C$620.9 million, according to data compiled by LSEG.
Excluding one-off items, Canada Goose posted a profit of C$1.51 per share, compared with an estimate of C$1.54 per share.
(US$1 = 1.4351 Canadian dollars)
(Reporting by Aatrayee Chatterjee in Bengaluru; Editing by Pooja Desai)
