Canada Goose shares tumble as margin slump overshadows revenue beat

Investing.com -- Canada Goose Holdings Inc (NYSE:GOOS) reported third-quarter revenue that significantly exceeded analyst expectations, but shares plunged 22% Thursday as investors focused on the company’s declining profit margins.

The luxury outerwear maker posted revenue of C$694.5 million for the quarter ended December 28, 2025, far surpassing the consensus estimate of C$468.49 million and representing a 14.2% increase YoY. Adjusted earnings per share came in at C$1.43, beating analyst expectations of C$1.17. Despite these strong top-line results, the company’s adjusted EBIT margin fell sharply to 29.3% from 33.8% in the same period last year.

Direct-to-consumer revenue grew 14.1% to C$591.0 million, with comparable sales increasing 6.3%, marking the fourth consecutive quarter of positive DTC comparable sales growth. Wholesale revenue rose 16.6% to C$88.3 million, primarily due to timing of shipments to partners.

"Our third-quarter results underscore the strength of our global brand and top-line engine, with broad-based revenue growth and continued momentum across key regions and channels," said Dani Reiss, Chairman and CEO of Canada Goose. "Margins this quarter reflected deliberate choices we made to expand product relevance and fuel brand momentum. Our focus now is converting this demand into stronger profitability."

The company’s gross margin contracted slightly to 74.0% from 74.4% in the prior year period, primarily due to product mix. Selling, general and administrative expenses increased significantly, driven by a one-time bad-debt provision related to a U.S. wholesale partner, costs associated with retail network expansion, higher marketing investments, and the absence of a foreign exchange gain from the previous year.

Canada Goose opened four new stores during the quarter, bringing its total permanent store count to 81, and expanded its year-round assortment to broaden customer appeal beyond its traditional winter-focused offerings.