Canada Goose Surpasses Market Despite EPS Decline Ahead

In a recent report, Canada Goose (GOOS) showcased resilience by outpacing broader market losses, with shares rising 1.5%. However, concerns loom regarding a projected 150% decline in EPS compared to last year, creating uncertainty for investors ahead of the upcoming financial results.

Date: 08-10-2024

AI Rating: 5

Canada Goose (GOOS) has shown positive movement in the stock market, closing at $12.22 with a 1.5% increase against the S&P 500's decline of 0.96%. Over the past month, the company's shares have gained 14.45%, significantly outperforming both the Retail-Wholesale sector and the S&P 500.

However, the upcoming financial results present concerns. The projected Earnings Per Share (EPS) for Canada Goose is -$0.06, indicating a drastic 150% decrease from the same quarter last year. This potential decline in EPS may signal underlying issues within the company’s profitability and could lead to bearish sentiment among investors.

Furthermore, the analysis anticipates net sales to reach $188 million, reflecting a drop of 10.28% year-over-year. This expected decrease in revenue aligns with the overall decline in earnings, indicating challenges the company may face in maintaining growth.

Looking at the full year projections, the Zacks Consensus estimate for earnings stands at $0.83 per share, highlighting a modest growth of +13.7%. Conversely, revenue is expected to drop slightly by -1.54%, which could further raise concerns about the company’s ability to increase overall sales amidst difficult market conditions.

Analyst revisions are crucial, and no recent adjustments have been made in the EPS estimates over the last 30 days, positioning Canada Goose with a Zacks Rank of #3 (Hold). This reflects a mixed outlook from analysts, with the company not showing significant upward momentum in estimate revisions.

On the valuation front, Canada Goose is trading at a Forward P/E ratio of 14.45, below the industry average of 16.81, suggesting it might be undervalued relative to its peers. Additionally, the PEG ratio of 0.66 indicates that the company is potentially undervalued based on its earnings growth expectations, as compared to the industry's average PEG of 1.93.

The Retail - Apparel and Shoes industry has a favorable Zacks Industry Rank of 99, placing it in the top 40% of all industries, which may present some underlying support for Canada Goose despite its individual challenges.

Stocks: GOOS