Canada Goose misses profit estimates on higher marketing spending, shares slump

Feb 5 (Reuters) - Canada Goose GOOS.TO missed analysts' estimates for third-quarter profit on Thursday, hurt by an increase in marketing and promotional spending, sending the luxury apparel maker's Toronto-listed shares 17% lower in early trading.

The Canadian company has been increasing its marketing spending and expanding its product assortment beyond its core high-margin parkas to attract demand from a wider base of customers, but the shift has added pressure to its margins.

The company's push into less expensive products, such as non-down outerwear, also weighed on gross margins, which fell to 74.0% from 74.4%.

"Margins this quarter reflected deliberate choices we made to expand product relevance and fuel brand momentum... These actions will position us to expand margins in the years ahead," CEO Dani Reiss said.

U.S. rival Ralph Lauren RL.N warned of margin pressure tied to U.S. tariffs despite quarterly sales beat, as the luxury retailer relies on raising prices and reallocating production to regions with lower duty exposure to offset pressures.

It reported adjusted earnings per share of C$1.43, missing estimates of C$1.66.

However, demand from affluent Gen Z shoppers has begun to improve in China, which accounts for about 32% of Goose's revenue, as of 2025. Luxury brand Louis Vuitton-owner LVMH LVMH.PA beat fourth-quarter sales expectations last month.

Canada Goose's revenue from Greater China rose 13.1% to C$248.3 million from last year.

Strong holiday demand for affordable luxury echoed across the sector with U.S.-based Tapestry’s TPR.N Coach brand topping quarterly sales estimates.

The company reported quarterly revenue of C$694.5 million ($507.54 million), compared with the estimates of C$658.5 million, according to data compiled by LSEG.

($1 = 1.3684 Canadian dollars)