Conor's avatar
$20.7m follower assets
Winter is Coming $GOOS
With all the talk of winter coming, there is one company whom could stand to benefit. I think it's a good time to look at Canada Goose which is currently trading down 50% YTD.


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It's no secret that retail companies would prefer a higher margin DTC business than building stores and trying to staff them, especially in today's labor market. Similar to $LULU, Canada Goose has been increasing DTC mix each year. This does wonder on their operating margin which will continue to expand as DTC mix grows.


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You should always look at the underlying business of a company before you look at the stock price. Canada Goose has a thriving business built around a very strong brand.

What if I started the article with their revenue and gross profit numbers before I showed you their stock was down 50% YTD?


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I know this is only the top line, but I wouldn't think Canada Goose as a business is not performing. Quite the contrary.

As you can tell from the name Goose is located in Canada, but you won't find many companies with as much diversity in their revenue as Canada Goose. They are totally global with 30% coming from APAC.


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The growth rates in EMEA, USA, and APAC are extremely solid all over 20%.


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Valuation
My name wouldn't be Conor Value without talking about Value. Right now, Canada Goose is trading at a VERY juicy valuation.

Their Price-to-Earnings/Growth (PEG) ratio is 0.38! Anything under 1 is solid, but a 0.38 is insane.

P/E, EV/EBITDA, Price/Sales, and Price/ Cash Flow are all way below their 5-year average.

Conclusion

Goose was founded by, Sam Tick, an immigrant to Canada with a strong entrepreneurial spirit. The company is still run by the same family with Sam Tick's grandson, Dani Reiss, at the helm.

This company checks a lot of boxes for me with strong growth, family operations, large insider ownership (over 20%), and a great present value.

Disclaimer: As of this morning, I'm a shareholder of $GOOS. Due your own due diligence before making any investment.
Josh Rozin's avatar
Great overview— especially appreciate the valuation section. May pick up some shares! In 2018 they were always surprising with their ER’s.
Conor's avatar
Thank you @josh! US followed by China are the two largest luxury brand markets in the world. Goose is growing both of these markets at a very solid pace especially in DTC.
Tyler P's avatar
Regarding the stock dropping, is the story here that, as inflation rises, fewer consumers will splurge on a luxury jackets?
Conor's avatar
@tpellom that's probably why, but as you look at $GOOS that hasn't been the case at all. That has even been true for other luxury brands that have been beaten down as well such as $PPRUF Kering owner of many luxury brands including Gucci.

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