Barclays cuts Canada Goose stock target to $10 from $11

On Friday, Barclays (LON:BARC) analyst Adrienne Yih adjusted the price target for Canada Goose (NYSE:GOOS) shares, bringing it down to $10.00 from the previous $11.00, while maintaining an Equalweight rating on the stock. Yih highlighted that Canada Goose’s financial results for the third quarter of fiscal year 2025 fell short of expectations in several key areas, including sales, gross margin (GM), operating margin (OM), and earnings per share (EPS). The stock, currently trading at $9.67, has fallen over 10% in the past week, though InvestingPro analysis suggests the company may be undervalued at current levels.

The company experienced a 6.2% decline in comparable store sales and an 8.1% drop in wholesale revenue on a constant currency basis. This downturn is anticipated to continue into the fourth quarter of fiscal year 2025, as Canada Goose has revised its comparable sales guidance to a range of flat to a mid-single-digit decrease, a downgrade from the previously forecasted low-single-digit increase to a low-single-digit decrease. Despite these challenges, the company maintains an impressive gross profit margin of 68.22% and a healthy current ratio of 2.01, indicating strong operational efficiency and solid liquidity.

Additionally, Canada Goose has also adjusted its guidance for the full fiscal year 2025, reducing expectations for both operating margin and earnings per share. The revised guidance reflects the challenges the company is facing in the current retail environment.

The analyst’s commentary points to a challenging period for Canada Goose, with various financial metrics not meeting the anticipated targets. The revision in the company’s guidance suggests that the headwinds faced in the third quarter are likely to persist, affecting the overall performance for the fiscal year.

Investors and stakeholders in Canada Goose will be closely monitoring the company’s progress as it navigates through these pressures and adjusts its strategies to align with the revised expectations for the remainder of the fiscal year. The updated price target from Barclays signals a cautious view on the company’s short-term financial outlook.

In other recent news, Canada Goose has been the subject of various analyst reports. Raymond (NSE:RYMD) James maintained a Market Perform rating on Canada Goose’s stock, noting the company’s need for greater consistency after its third-quarter earnings per share (EPS) of C$1.51 fell short of the projected figures. Despite flat revenue, the company saw an improvement in gross margin percentage, up by 85 basis points. Meanwhile, CFRA analyst Zachary Warring adjusted the price target for Canada Goose shares, increasing it to $11.00 from the previous $10.00, while maintaining a Hold rating on the stock.

Canada Goose reported fourth-quarter earnings that beat analyst expectations, but revenue fell short of estimates. The company posted adjusted earnings per share of C$1.51 for the quarter, surpassing the analyst consensus of C$1.10. However, revenue came in at C$607.9 million, missing the C$615.24 million analysts had projected. Direct-to-consumer revenue inched up 0.7% to C$517.8 million, though comparable sales declined 6.2%.

These are recent developments that have unfolded. Despite the revenue miss, Canada Goose has reaffirmed its revenue outlook but has revised its EBIT margin guidance downward. The company continues to balance operational efficiency with strategic investments to maintain brand momentum across all channels.

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