Canada Goose caution on U.S. eclipses upbeat annual sales forecast

Canada Goose Holdings Inc (GOOS.TO), on Thursday struck a cautious note on its business in the United States as luxury spending cooled in the market, overshadowing an upbeat annual sales forecast driven by a recovery in China and sending its shares down about 11%.

A reversal in the strict COVID-19 policies in China – a top market for luxury goods – has encouraged wealthy shoppers there to snap up everything from Cartier jewelry and Birkin bags, boosting sales at several high-end labels.

However, shoppers in the United States are putting a pause to a post-pandemic splurge on high-end clothing and accessories, with companies including ultra-luxury fashion houses like LVMH (LVMH.PA) and Gucci owner Kering (PRTP.PA) seeing sagging demand.

British luxury label Burberry (BRBY.L) on Thursday also noted there was a “challenge (in the U.S.) at the moment”, with sales falling 7% in the Americas.

“We’re not being super ambitious for this year in the U.S…the market is going to be a little bit more challenging in the U.S. because of the macro economics,” Canada Goose Chief Financial Officer Jonathan Sinclair said on an earnings call.

Canada Goose, popular for its bright-red parkas and pricey puffer jackets, saw U.S. revenue decline 4.5% in the reported quarter.

“The U.S. customer is a little bit more apprehensive. They are more price conscious, especially now, and the luxury consumer is spending a lot less,” said Liza Amlani, principal at consulting firm Retail Strategy Group.

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