Canada Goose’s extra insulation

2 minute read

Jackets hang in the showroom of the Canada Goose factory in Toronto, Ontario, Canada, February 23, 2018.

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TORONTO, Nov 5 (Reuters Breakingviews) - Canada Goose (GOOS.TO) still has room to fly. The Toronto-based winter-jacket firm said revenue excluding non-recurring sales rose 40% in the second quarter. The parka maker also lifted its outlook for total revenue in fiscal 2022, causing shares to soar over 16% on Friday.

That’s a welcome relief for shareholders: The stock fell over 20% in the past three years as peer Moncler’s (MONC.MI) has more than doubled and specialty retailer Lululemon Athletica (LULU.O) tripled. Growth was strong in mainland China, where direct-to-consumer revenue rose 86%. And the success could continue. Consultant Bain recently said the Chinese luxury market is on track to be the world’s largest by 2025.

The company has been the target of anti-fur activist campaigns read more , was fined by regulators read more over false advertising, and isn’t immune to fads. Still, Canada Goose trades at just over 4 times forward enterprise-value-to-sales, compared with fellow puffy-jacket purveyor Moncler and Lululemon, which are about twice as high. That suggests even with Friday’s surge, its valuation still has plenty of cushion. (By Sharon Lam)

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Editing by Lauren Silva Laughlin and Amanda Gomez

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