Canada Goose (GOOS.TO) shares jumped as much as 30 per cent in early trading on Thursday after the company reported third quarter financial results that exceeded analyst expectations.
Canada Goose’s sales in the third quarter ending Dec. 27 totalled $474 million, a 5 per cent increase from $452.1 million reported the same time last year. The Toronto-based parka maker said the increase in sales was driven by e-commerce growth and continued demand in China.
“Our business showed remarkable resilience, and we have outperformed our own expectations,” Canada Goose chief executive Dani Reiss said on a conference call with analysts on Thursday.
“This marks a return to growth for Canada Goose and our biggest quarter, and we did it with strong profitability and cash flow.”
Shares of Canada Goose closed Thursday’s trading day up more than 22 per cent at $54.95.
With 21 per cent of its stores around the world forced to close during the third quarter because of COVID-19 lockdowns, Canada Goose saw online sales surge 39 per cent. E-commerce sales grew by double digits across Canada Goose’s major markets, including strong results in Germany, France, Ireland and the United Kingdom.
At the same time, the company has continued to expand its store presence in China, which has been a key part of its international growth strategy. Direct consumer sales grew 41.7 per cent in China in the third quarter, helping offset weakness in Canada and the United States prompted by COVID-19 lockdowns and restrictions.
“We’re still very early in our journey in mainland China and we see significant opportunity to continue to grow our network in the region,” Reiss told analysts on Thursday.
The Chinese consumer has also been important for Canada Goose, given the impact shoppers have on luxury sales around the world. Canada Goose’s retail traffic in a given market is typically split equally between local and international consumers. With tourism down globally, chief financial officer Jonathan Sinclair said the company has focused on serving consumers at home and driving demand in local markets.
“I’m really pleased with the strength of the demand we’re seeing from local markets,” Reiss said, pointing to 30 per cent sales growth in Europe and the rest of the world outside of Asia and North America.
The company reported an adjusted profit of $1.01 per diluted share. On average, analysts had expected an adjusted profit of 86 cents per share and sales of $415.3 million.
The company’s most recent results are in stark contrast to the same time last year, when the COVID-19 pandemic brought its business in China to a standstill, forcing the company to slash its outlook for the year.
Alicja Siekierska is a senior reporter at Yahoo Finance Canada. Follow her on Twitter @alicjawithaj.