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High-end coat maker Canada Goose Holdings Inc. reported higher-than-expected sales growth on strong retail results in China and the United States. The shares jumped more than 12 per cent in early trading in New York.

The Toronto-based company reported revenue of $358 million for the fiscal fourth quarter ended March 31, compared with the average analyst estimate of $316 million.

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The shares soared as much as 25.3 per cent on Thursday — the biggest intraday increase since February 2021 — before paring gains to 15 per cent in late-morning trading in New York.

Canada Goose, which sells parkas that cost as much as US$2,000, has focused on improving performance in Asia. The region is home to over 40 per cent of its stores and recovery there from the COVID pandemic has been slow, but is beginning to gain speed.

Overall sales grew 22 per cent from a year earlier and were up about 30 per cent in the Asia Pacific region — 33 per cent excluding the impact of currency moves — aided by customers in mainland China shopping locally and while traveling to Hong Kong, Macau and Japan ahead of the Lunar New Year.

The company has also been opening more locations as it moves away from wholesale and increases direct-to-consumer sales. It added three new permanent stores in the fourth quarter and plans to add 10 more this fiscal year.

Canada Goose issued a new outlook that sees slow growth in revenue but higher profitability in fiscal 2025. The company expects sales to grow in the low single digits, with the majority of its sales, as usual, coming during the fall and winter months in the northern hemisphere.

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Executives plan to temporarily reduce production levels. Over the past few years, the company built up more inventory than it should have and has been using friends-and-family sales to try to get rid of old inventory, Beth Clymer, president of finance and strategy, told analysts Thursday. “In fiscal 2025, we’ll shift that focus on increasing our inventory efficiency, bringing up working capital, and improving cash conversion,” she said.

In the fourth quarter, North American sales increased more than 20 per cent, driven by strength in e-commerce, while its EMEA division, which also includes Latin America, posted low single-digit sales growth, partly due to economic headwinds that may continue.

“Our outlook for fiscal 2025 continues to expect pressure on consumer spending due to the higher interest rate environment and geopolitical uncertainty,” chief financial officer Neil Bowden said on the call with analysts.

But the company said it plans to increase prices, and margins should expand, projecting that adjusted profit per share will grow “by a mid-teen percentage” over a year ago.

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“Within our business, we assume continued operational discipline and execution of initiatives focused on delivering further cost efficiencies,” the company said in a statement.

With assistance from David Scanlan.

Bloomberg.com

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