Q: I haven't seen any questions regarding Canada Goose for a while so I'm just wondering what your take is on them these days. I bought a stake in them many years ago when you had them in your Growth portfolio, I've held on to it still because I believe they make an excellent product but the profit metrics are still not there.
Thank you
Jim
Thank you
Jim
5i Research Answer:
The consumer discretionary space in general has been weak in recent years, and GOOS now trades at 15X forward earnings. Sales estimates are beginning to climb back up, but forward earnings estimates are largely trending sideways. It generates good free cash flow, but margins have slipped, and we think the company needs to see renewed growth prospects to see better momentum. Overall, we would not expect much from the name unless its margins consistently improve and the China recovery proves to be durable.