Canada Goose soars after posting a surprise profit

Shares of Canada Goose soared more than 27% in early trading Friday after the winter-apparel retailer posted a surprise profit.

The company said it earned $US0.09 per share for the fourth quarter where analysts polled by Bloomberg had expected a loss of the same amount. Revenue came in at $US124.8 million, well above the expected $US77.0 million, fuelled by new stores in major cities like New York and Toronto.

“The increase was driven by the strong performance of existing retail stores and e-commerce sites including a full year of operations for Toronto and New York City retail stores, and incremental revenue from four new retail stores and eight national e-commerce sites opened during the fiscal year,” the press release said.

Canada Goose’s unique vertical supply chain gives it a leg up, Cowen analyst Oliver Chen said earlier this year.

“We ascribe a premium multiple to the shares of Canada Goose given: 1) Powerful brand equity based on high levels of functionality and quality; 2) vertically integrated supply chain with opportunity to become more efficient and bring more manufacturing in-house to boost margins; and 3) opportunity to widen addressable market and grow top line as global growth, shift to Direct-to-Consumer, and product category expansion strategies continue to be executed,” he wrote in a note in February.

The company also said it plans to open new stores in New Jersey, Montreal, and Vancouver this year ahead of the winter-holiday shopping season.

Shares are up more than 70% this year, easily outpacing the benchmark S&P 500 index’s 3.2% gain.

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