High-end coat maker Canada Goose reported a 47.2% increase in direct-to-consumer revenue, which includes both ecommerce sales and revenue from its own retail stores. DTC revenue reached 74.2 million Canadian dollars ($98.3 million) for its second 2020 fiscal quarter ended Sept. 29, compared with CA$50.4 million ($66.8 million) during the same period prior. For the year so far, DTC sales are up 48.1% to CA$109.0 million ($144.4 million) from CA$73.6 million ($97.5 million) at the same point last year.
On the wholesale side, growth reached just 22.2% to CA$219.8 million ($166.1 million) from CA$179.9 million ($136.0 million). Canada Goose expects a slight decline in wholesale in its third quarter as it has already fulfilled many of its wholesale orders for the year. It is also prioritizing its direct channels over wholesale as the profit margins on direct sales reached 75.6% for the quarter, compared with a 47.5% margin for wholesale revenue.
Despite unrest in Hong Kong, revenue from Asia nearly doubled to CA$48.9 million ($37.0 million) from CA$26.6 million ($20.1 million) during the second quarter last year. Hong Kong protests had a significant impact on the store and international fulfillment center in Hong Kong, according to CEO Dani Reiss on a call transcribed by Seeking Alpha, but strong performance in other markets buoyed revenue.
Canada Goose is No. 205 in the Internet Retailer 2019 Top 1000
In other earnings news:
- Online-only mass merchant Overstock.com (No. 47) reported a 21.8% decline in revenue for its retail operations in the third quarter ended Sept. 20 to $340.8 million from $435.8 million. For the first three quarters, revenue declined 20.7% to $1.07 billion from $1.35 billion during the same period last year. The company also announced the possibility of an offering of up to $150 million in shares. The size of the potential offering is large relative to the size of the company overall; Overstock currently has a market capitalization of about $278 million.
- Department store chain J.C. Penney Co. Inc. (No. 40) increased online margins, helping to shrink its operating losses 66.0% to $34.0 million from $100.0 million the year before. It also reduced the amount of inventory it held during the quarter, meaning it had to discount less out-of-season items, further shrinking its losses. J.C. Penney doesn’t break out ecommerce figures.
- Magazine Luiza SA, the Brazilian retailer that is No. 2 in the Internet Retailer LatAm 300, raised 4.73 billion reais ($1.13 billion), including a primary sale of 100 million shares, the firm said in a regulatory filing. The company said it will use the proceeds from Tuesday’s sale to invest in technology and expand further in Brazil’s highly competitive ecommerce environment. The move by Magazine Luiza, which started as a family-owned appliance and furniture store, follows similar capital injections by larger competitors such as B2W Digital (No. 1) and MercadoLibre Inc. (No. 8 in the ranking of Internet Retailer Online Marketplaces).
Bloomberg contributed to this report.
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