Canada Goose has upgraded its guidance for the full financial year after reporting stronger-than-expected results for its second quarter ended Sept. 30. It now predicts that its total revenues will increase by at least 30 percent for the year, up from the previously forecasted growth of 20 percent, with Baffin making only a minor contribution and the wholesale business growing at a high single-digit rate. The adjusted Ebitda margin should go up by at least 1.5 percentage points from last year's level, and adjusted earnings per share should rise by at least 40 percent.

Continuing the strong momentum reached in the first quarter, Canada Goose posted a sales increase of 33.7 percent to 230.3 million Canadian dollars (€154.1m-$174.6m) for the relatively important second quarter, with increases of 18.3 percent to C$179.9 million (€120.4m-$136.4m) at wholesale and 149.5 percent to C$50.4 million (€33.7m-$38.2m) in the direct-to-consumer (DTC) channel.

The company's emerging DTC business, which came to represent 21.9 percent of total revenues in the quarter, benefitted from the opening of four new stores and the strong performance of existing doors and e-commerce sites, particularly for new year-round styles like the Olympia lightweight down.

Canada Goose was particularly active on the DTC front in Greater China during the latest quarter, opening an online store on Tmall's Luxury Pavilion, a physical store in Hong Kong and pop-up store in Beijing, ahead of a regular store in the Chinese capital later this year. The next store opening will be in Montreal at the end of this week.

The growth in wholesale revenues was driven by increased order values, by earlier shipments to clients as compared to last year. The gross margin at the wholesale level advanced by 2.9 percentage points to 50.4 percent thanks to production efficiencies and lower duties paid in the European Union following its recent free trade agreement with Canada.

The gross margin at the DTC level rose by 1.4 percentage points to 75.2 percent, and the stronger DTC component of the revenue mix contributed to a rise of 5.2 percentage points in the company's overall gross margin to 55.8 percent. In spite of higher marketing costs and investments in new manufacturing capacities, including the new factory in Winnipeg that opened in September, the operating profit went up to 44.5 percent at wholesale and to 45.0 percent at retail.

Across the group, the adjusted Ebitda margin improved by 3.9 percentage points to a nice and comfortable level of 30.8 percent, and the adjusted net income rose by 36 percent to C$51.0 million (€34.1m-$38.7m).