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Investing.com -- Canada Goose Holdings Inc (TSX:GOOS) reported a wider-than-expected loss for the first quarter of fiscal 2026, sending shares down 8.9% in Thursday trade despite revenue that significantly exceeded analyst expectations.
The luxury outerwear maker posted an adjusted loss of Cdn$0.91 per share for the quarter ending June 29, missing analyst estimates of a Cdn$0.63 loss by Cdn$0.28. Revenue rose 22.4% YoY to Cdn$107.8 million, substantially beating the consensus estimate of Cdn$66.06 million. The company attributed the revenue growth to a 23.8% increase in direct-to-consumer (DTC) sales, which reached Cdn$78.1 million, driven by comparable sales growth of 14.8%.
The earnings miss was largely due to increased expenses, including a one-time financial award of Cdn$43.8 million resulting from an arbitration resolution with a former supplier. The company also cited higher costs related to retail expansion, increased marketing spend for seasonal campaigns, and investments in product design.
"We’re off to a strong start, brand heat is rising, and our DTC performance is delivering," said Dani Reiss, Chairman & CEO of Canada Goose. "We’re executing with precision, from bold storytelling to smarter retail moves, and it’s showing up in results."
Gross margin improved to 61.4% from 59.7% in the same quarter last year, primarily due to higher margin contribution from the company’s European knitwear facility. Wholesale revenue increased 11.9% to Cdn$17.9 million, while other revenue rose 31.1% to Cdn$11.8 million.
The company reported a net loss attributable to shareholders of Cdn$125.2 million, compared to Cdn$77.4 million in the prior year period. Canada Goose ended the quarter with inventory of Cdn$439.5 million, down 9% YoY, and reduced its net debt to Cdn$541.7 million from Cdn$765.9 million a year earlier.