Canada Goose to open new factory in Montreal, reports Q4 profit up from year ago
Jackets hang at the factory of Canada Goose Inc. in Toronto on November 28, 2013. Canada Goose Holdings Inc. announced plans to open a new factory in Quebec, its second in the province. THE CANADIAN PRESS/Aaron Vincent Elkaim
Tara Deschamps, The Canadian Press
Published Thursday, February 14, 2019 7:42AM EST
Last Updated Thursday, February 14, 2019 10:30AM EST
TORONTO - Canada Goose Holdings Inc. will expand its network of eight Canadian manufacturing facilities with a new factory in Quebec - its second in the province.
The Toronto-based luxury apparel company said Thursday that the Montreal factory will create 300 jobs and accommodate about 650 workers when it is running at full capacity by the end of 2020.
“Montreal's Chabanel district was once a central part of apparel manufacturing in Canada, but this has been eroded by the shift offshore in pursuit of margins. Some brands only have their headquarters in the city and they are missing the great history and potential this area has,” Canada Goose chief executive Dani Reiss told a conference call with financial analysts.
“This is the perfect opportunity for us to rebuild and revitalize the cut-and-sew industry there and have a lasting impact on the community.”
The factory announcement came as Canada Goose reported a better-than-expected profit for its latest quarter and raised its financial guidance for the year.
The company said it earned $103.4 million or 93 cents per diluted share for the quarter ended Dec. 31, up from a profit of $63 million or 56 cents per diluted share in the same quarter a year earlier.
Revenue in what was the company's third quarter totalled $399.3 million, up from $265.9 million.
Analysts on average had expected a profit of 81 cents per share for the quarter, according to Thomson Reuters Eikon.
Reiss attributed some of the increases to the strength of the company's e-commerce offerings, including its presence on the popular Tmall platform operated by Chinese company Alibaba Group.
Reiss said despite not offering any promotions Canada Goose ranked within the top 10 brands in its space on the platform on Singles Day - a Nov. 11 holiday in China that was started in the nineties by Nanjing University students rebelling against Valentine's Day and has since been declared the biggest shopping day of the year internationally.
In recent years, Canada Goose has zeroed in on the Asian market to spur growth, opening stores in Beijing and Hong Kong and a regional office in Shangai.
The Beijing store opening came as anti-Canadian sentiment was reportedly growing in China, following the arrest of Huawei Technologies chief financial officer Meng Wanzhou in Vancouver. In the two weeks following her arrest, Canada Goose's stock dropped by about 20 per cent.
But Reiss insisted the company's Chinese expansion has gone well and the brand's reputation is still in tact overseas.
“We remain really bullish and excited about China...We know we have a tremendous amount of demand in that marketplace,” Reiss said, referencing long line-ups outside the Chinese stores.
With that strength in the Chinese market in mind, Canada Goose raised its guidance for revenue and profit for its 2019 financial year.
It now expects revenue growth in the mid-to-high 30s on a percentage basis, compared with earlier expectations for at least 30 per cent.
Annual growth in adjusted net income per diluted share is also now expected to grow in the mid-to-high 40s on a percentage basis, compared with earlier expectations for at least 40 per cent.
Companies in this story: (TSX:GOOS)