Canada Goose Holdings: Challenges in Key Markets Prompt Sell Rating Despite Positive Asia-Pacific Performance

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Analyst Alexander Perry of Bank of America Securities maintained a Sell rating on Canada Goose Holdings (GOOS – Research Report), reducing the price target to C$14.00.

Alexander Perry has given his Sell rating due to a combination of factors related to Canada Goose Holdings’s market performance and strategic initiatives. While the company is experiencing positive regional momentum, particularly in the Asia-Pacific region, with notable direct-to-consumer (DTC) store productivity in China and Japan, challenges remain in other key markets. The North American luxury spending market is characterized as volatile and difficult, which may impede the company’s growth. Furthermore, despite operational improvements, there is still a need for significant restructuring in the European market, where half of the revenue is driven through wholesale channels.

The company is introducing new operational initiatives that are showing signs of success, such as enhanced salesforce training, labor hour optimization, changes in merchandising strategies, and better inventory management. These changes have led to improved store performance, particularly in the London store, and are expected to be implemented across other major stores. However, Perry maintains an Underperform rating, anticipating continued softness in luxury spending, especially in North America, and a significant wholesale reset expected in fiscal year 2025, which may further affect the company’s financial stability. These factors contribute to a cautious outlook on Canada Goose Holdings’s stock, prompting the Sell recommendation.

In another report released on July 23, Williams Trading also maintained a Sell rating on the stock with a C$11.00 price target.

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Canada Goose Holdings (GOOS) Company Description:

Canada Goose Holdings, Inc. designs, manufactures, distributes and retails outerwear for men, women and children. It operates through the Wholesale and Direct to Consumer segments. The Wholesale segment comprises sales made to a mix of functional and fashionable retailers, including department stores, outdoor specialty stores, individual shops, and to international distributors. The Direct to Consumer segment refers to the online sales through its e-commerce sites to customers in Austria, Belgium, Canada, China, France, Germany, Ireland, Luxembourg, the Netherlands, Sweden, the United Kingdom, and the United States and sales to customers from company-owned retail stores in Boston, Calgary, Chicago, London, New York City, and Toronto. The company was founded in 1957 and is headquartered in Toronto, Canada.

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