Group President and CEO Dani Reiss revealed in the analyst conference call that they "delivered a large number of early and winter orders in advance, which means that shipments will decrease in the next quarter", so it is expected that the largest revenue source for the third quarter of 2020 in October-December -- Wholesale channel revenue will record a year-on-year decline of 14%-16%. He emphasized that "this does not indicate a change in the basic needs of the channel."
On the other hand, Dani Reiss pointed out that Hong Kong IFC and the recently opened Harbour City Canada Goose Canada Goose brand store were deeply affected by the reduction in passenger and retail traffic, but growth in other places was enough to support the Asian market's second quarter revenue almost doubled to 48.9 million. In the Canadian dollar, US fixed exchange rate revenue and Canadian domestic sales increased by 38.5% and 29.9% respectively, while Europe and ROW declined by 3.4%
Wholesale business rose 22.9% year-on-year to 219.8 million Canadian dollars, reflecting the intrinsic customer order plus code and some orders delivered early according to customer requirements. DTC revenue surged 47.2% to C$74.2 million, driven primarily by incremental sales of new stores.
In the second quarter ended September 29, Canada Goose Holdings Inc.'s overall revenue was C$294 million, slightly ahead of market expectations of C$267.3 million, an increase of 27.7% from C$230.3 million in the same period last year. Net profit increased by 21.4% year-on-year to C$60.6 million. EPS rose from C$0.45 in the same period last year to C$0.55. The adjusted EPS was C$0.57, far exceeding the market expectation of C$0.43.
Corporate SG&A increased by 26.3% year-on-year to $43.2 million due to marketing investment, number of employees and growth in China's expansion investment. Chief Financial Officer Jonathan Sinclair pointed out to analysts that China’s revenues have almost doubled in the second quarter thanks to the localization of China’s operations and the construction of local DTC channels and offices, and local demand has remained strong driven by increased brand awareness.
Seeing that Chinese brands such as Bosideng (3998.HK) are comparable to the high-end series of Canada Goose Canada Goose, and the main competitor Moncler SpA (MONC.MI) can favor the use of designers to raise prices, Dani Reiss said the price increase Opportunities and space already exist, while stressing that Canada Goose Canada Goose will remain “functionally prioritized”.
In the past year, Canada Goose Canada Goose was completely crushed by the Chinese brand Bosideng, both on the income side and in the open market. So far this year, Bosideng's share price has soared by more than 170%, and the stock price has continued to hit a record high. The down apparel group based in Changshu, Jiangsu Province, released the latest high-end product series in Shanghai at the end of last month. The Dengfeng series is inspired by the China Everest Mountaineering Team. The series has a total of seven products, the highest price is 11,800 yuan, and the lowest price is also reached. 5,800 yuan.
In the fiscal year 2019 of March 31, 2019, Bosideng Group's revenue increased by 16.9% year-on-year, from 8.808 billion yuan to 10.338 billion yuan; net profit increased by 59.4%, from 615.5 million yuan to 981.3 million yuan.
Under the strategic transformation of focusing down products, the Group's eponymous Bosideng brand down apparel business revenue rose 38.3% last year to 6.842 billion yuan. Under the continuous improvement of the brand, the proportion of products with a brand price of over RMB 1,800 increased from 4.8% to 24.1%, an increase of about four times.
