Moderate: Growth in Either Sales or Profits

Canada Goose Holdings Inc (NYSE, TSX: GOOS)

Luxury performance brand of outerwear, apparel, footwear and accessories, Canada Goose, listed on NYSE and TSX, ended its fourth quarter and FY24 on March 31, 2024. Reporting its financial results in May, the Canadian company announced a 22 per cent increase in total revenue to CA$358 million (~$261.26 million), as well as a gross profit of CA$233 million (~$17 million) in the fourth quarter (Q4). The operating margin increased from CA$17.6 million in Q4 FY23 to CA$23.1 million.

On a full-year basis, total revenue increased by 10 per cent (9 per cent on a constant currency basis) to CA$1,333.8 million (~$973.39 million), year-on-year. Within this, DTC revenue grew by 18 per cent to CA$950.7 million, wholesale revenue decreased by 16 per cent, and other revenue increased by 97.2 per cent to CA$70.8 million. The profitability performance included gross profit growth (68.8 per cent gross margin) of 12.5 per cent to CA$917.4 million and declines in operating profit from CA$147.6 million in the prior year to CA$124.5 million, and in adjusted EBIT from CA$174.1 million to CA$171.8 million. This resulted in adjusted net income attributable to shareholders of CA$101 million or $0.99 per diluted share, versus CA$110 million or CA$1.04 per diluted share in FY23.

Forecasting its FY25, Canada Goose Holdings Inc expects total revenue to grow in the low-single digits year-on-year, with an approximately 25-75 per cent distribution split between H1 and H2. The consolidated gross margin percentage is expected to stay similar to that of FY24, resulting in non-IFRS adjusted EBIT margin expansion by ~100 basis points compared to FY24. Non-IFRS adjusted net income per diluted share is expected to grow by a mid-teen percentage in FY25.

Strong: Growth in Both Sales and Profits

Ralph Lauren Corporation (NYSE: RL)

Luxury fashion brand Ralph Lauren’s Q4 and FY24 (ended March 31, 2024) strong financial results were announced on May 23, along with the FY25 outlook. The global leading company in the design, marketing, and distribution of luxury lifestyle products is headquartered in New York and listed on NYSE.

Net revenue in the concluding quarter of the fiscal was $1.6 billion – a 2 per cent increase on a reported basis and 3 per cent in constant currency terms. Foreign currency negatively impacted revenue growth by around 110 basis points. Net income was $91 million or $1.38 per diluted share on a reported basis ($112 million or $1.71 per diluted share on an adjusted basis), compared to net income of $32 million or $0.48 per diluted share on a reported basis ($61 million or $0.90 per diluted share on an adjusted basis).

For Fiscal 2024, revenue increased 3 per cent to $6.6 billion on both a reported and constant currency basis. Foreign currency favourably impacted revenue growth by approximately 20 basis points in the period. Gross profit was $4.4 billion on a reported basis and gross margin was 66.8 per cent. Net income was $646 million or $9.71 per diluted share on a reported basis. On an adjusted basis, net income was $686 million or $10.31 per diluted share. This compared to net income of $523 million or $7.58 per diluted share on a reported basis, and net income of $576 million or $8.34 per diluted share on an adjusted basis for FY23.

Sharing the outlook for FY25, the company expects revenues to increase in the low-single digits from FY24 on a constant currency basis, centring on about 2 to 3 per cent. The company expects operating margin to expand approximately 100 to 120 basis points in constant currency, driven by gross margin expansion and operating expense leverage. Gross margin is expected to increase by about 50 to 100 basis points in constant currency, with AUR growth, reduced cotton costs, and a favourable geographic and channel mix shift more than offsetting incremental product costs from materials and labour and freight costs related to Red Sea disruptions.

Fibre2Fashion News Desk (WE - SB)