North American And Mainland China Demand Will Drive Global Expansion

Key Takeaways

• Strong international and direct-to-consumer growth, alongside year-round product expansion, is driving revenue stability and increasing profitability potential.
  
• Enhanced marketing and sustainability initiatives are boosting brand equity, appealing to younger and ESG-focused consumers, and supporting premium pricing.
  
• Elevated costs, regional headwinds, and strategic risks threaten Canada Goose's growth and margins, with brand dilution and shifting consumer dynamics posing major long-term challenges.

Catalysts

Designs, manufactures, and sells performance luxury outerwear, apparel, footwear, and accessories for men, women, youth, children, and babies.

• Exceptional revenue growth in North America and Mainland China-especially driven by rising affluence and demand for premium/luxury goods in Asia-highlights Canada Goose's ability to tap expanding high-end consumer markets, suggesting a longer-term expansion of the addressable customer base and continued international revenue growth.
  
• Accelerated product innovation and expansion into non-winter categories (e.g. knitwear, t-shirts, polos, and fleece), along with more seasonally relevant collections, have increased year-round brand relevance and smoothed seasonality, supporting topline sales and earnings stability.
  
• Direct-to-consumer (DTC) channel momentum, with 15% DTC comparable sales growth and ongoing digital investment (including livestreaming success on Douyin/WeChat in China), is elevating gross margins, providing higher profitability potential compared to wholesale-heavy models.
  
• Robust marketing campaigns are increasing brand engagement, press/impressions, and attracting younger/new customer cohorts, which enhances brand equity and supports both near
• and long-term revenue and average basket size growth.
  
• Tangible progress on sustainability, including emissions reductions and renewable energy investments, positions Canada Goose to capture premium pricing, appeal to ESG-focused consumers, and mitigate risks related to regulatory or investor shifts-enhancing brand durability and future net margins.

Canada Goose Holdings Future Earnings and Revenue Growth

Assumptions

• Analysts are assuming Canada Goose Holdings's revenue will grow by 4.2% annually over the next 3 years.
• Analysts assume that profit margins will increase from 3.4% today to 5.6% in 3 years time.
• Analysts expect earnings to reach CA$87.0 million (and earnings per share of CA$0.11) by about September 2028, up from CA$47.0 million today.
• In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 29.3x on those 2028 earnings, down from 37.4x today. This future PE is lower than the current PE for the US Luxury industry at 35.7x.
• Analysts expect the number of shares outstanding to grow by 0.28% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 8.38%, as per the Simply Wall St company report.

Canada Goose Holdings Future Earnings Per Share Growth

Risks

• Canada Goose is experiencing sustained headwinds in the U.K. and Japan, with persistent declines in store traffic and consumer confidence despite efforts to drive conversion rates-this ongoing weakness could constrain revenue growth and earnings, especially given macro uncertainty in these regions.
  
• The company is investing heavily in marketing, product creation, and store labor to fuel growth, but SG&A expenses are rising meaningfully; if revenue growth does not scale as anticipated, such elevated operating expenses may compress net margins and delay meaningful margin expansion.
  
• Canada Goose's strategy to accelerate newness and extend beyond its core outerwear into more seasonally relevant apparel could risk brand dilution; if consumers do not respond as hoped, or if core luxury positioning weakens, both revenue stability and gross margins could be negatively impacted.
  
• Despite momentum in APAC and North America, the company noted "uncertainty around what the trade environment looks like," specifically referencing potential U.S.–Canada tariff dynamics and second-order effects on consumer demand, representing an external risk to both top-line and bottom-line financials.
  
• The company relies on continued direct-to-consumer growth and strong marketing execution for its current trajectory, but luxury market normalization, ongoing macroeconomic challenges, and shifting consumer preferences (including environmental and anti-fur sentiment) could limit long-term revenue growth and net earnings if secular tailwinds fade.

Valuation

• The analysts have a consensus price target of CA$20.606 for Canada Goose Holdings based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of CA$28.0, and the most bearish reporting a price target of just CA$14.0.
• In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be CA$1.5 billion, earnings will come to CA$87.0 million, and it would be trading on a PE ratio of 29.3x, assuming you use a discount rate of 8.4%.
• Given the current share price of CA$18.12, the analyst price target of CA$20.61 is 12.1% higher.
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.