(Reuters) – Canada Goose Holdings Inc said on Thursday a slow return of tourists to its stores would hit the luxury apparel retailer’s earnings in fiscal 2022.
Luxury goods makers including Estee Lauder Cos Inc and Coach handbag maker Tapestry Inc have also seen store sales at major shopping destinations take a beating as the pandemic keeps their wealthy overseas customers at home.
Tourism, which makes up a “lush percentage” of sales for Canada Goose, is not likely to reach pre-pandemic levels in fiscal 2022, Chief Executive Officer Dani Reiss said on an earnings call.
U.S.-listed shares of Canada Goose reversed earlier gains to decline about 6% in morning trade.
The company has opened new stores and doubled down on its online business in the world’s second-largest economy to cushion the hit from lower spending by wealthy Chinese travelers at its stores.
Still, a full margin recovery is dependent on the return of international traffic, Finance Chief Jonathan Sinclair said.
He noted that Canada Goose’s adjusted earnings before interest and taxes (EBIT) margin would likely be in the mid- to high-teens range.
Adjusted EBIT margin for fiscal 2020 and fiscal 2019 had come in at 21.6% and 24.9%, respectively. In the pandemic-hit fiscal 2021, it was 14.7%
However, Canada Goose forecast annual revenue above C$1 billion for the first time in fiscal 2022, as it shifts to a largely direct-to-consumer model to tap the pandemic-accelerated shift to online shopping.
In the fourth quarter ended March 28, revenue rose about 48% to C$208.8 million ($172.16 million), beating estimates, as sales more than doubled on its online channel.
Excluding items, Canada Goose earned 1 Canadian cent per share, versus estimates for a loss of 11 Canadian cents.
($1 = 1.2128 Canadian dollars)
(Reporting by Praveen Paramasivam in Bengaluru; Editing by Devika Syamnath)
