Are Shares of Canada Goose (GOOS) a Buy?

: GOOS | Canada Goose Holdings Inc. News, Ratings, and Charts

GOOS – Today’s featured article covers whether shares of Canada Goose (GOOS) are a good buy or not. Continue reading to find out the details.

Record cold weather is sweeping across the U.S this week. This should give retailers a good jump start on the all-important holiday sales as consumers buy warm weather apparel.  

But one of last year’s hottest names, Canada Goose (GOOS) could give investors a chill when it reports earnings tomorrow morning. 

Unlike last year, in which unseasonably warm weather persisted through Christmas, forcing retailers to offer deep discounts in order to unload inventory in January, Canada Goose, which makes and sells high-end winter coats, should be well-positioned to benefit from the early cold snap. 

Unfortunately, GOOS faces some company-specific headwinds, including a valuation that’s as stuffed as its namesake down jackets. 

GOOS has its initial public offering (IPO) in mid-2017 and built a head of steam in 2018, nearly tripling in price to a peak of $70, before a couple of disappointing reports sent valuation and shares to the current $40 level. 

But, I think there is still more downside to come, possibly into the $30 level, or another 25%, in the coming months.

Valuation is still very high at nearly 60x eps while expectations for revenue growth has declined from over 60% annually in 2018 to much more moderate to 25% in 2019 and 2020. 

A few of the challenges are broad macro issues such as the consumers pulling back spending over the past few months on worries of a slowing economy especially for the segment of people that would buy GOOS jackets as an aspirational item, which can cost north of $1,000, opting for a more economical choice. 

This also speaks to the continuing shift towards online shopping.  While GOOS does sell wholesale to some department stores it was predicting much of its growth on the rollout of company-owned locations. It currently operates just 11 stores and expansion overseas has proved more difficult than expected. 

But to achieve the scale and international footprint it needs to build its online presence.  Like many other retailers, it’s finding that running it’s own direct-to-consumer site isn’t enough and needs the likes of Amazon (AMZN) and other third-party platforms. 

Unfortunately, it’s also finding that being on AMZN creates a new set of issues which includes knocks-offs of fake merchandise or competitors paying for higher listing position on search.

For example, when I type in ‘Canada Goose Men” into AMZN, the first listings offer similar styles that sell for about 1/10th of the price.  Goose’s products don’t appear until the third row down. 

amazon goos products

Goose’s high price point does give it great margins. But, fashion by its very nature is fickle to trends especially the high end unless something is deemed “a classic” and I don’t think GOOS has achieved that status yet. 

The holiday season will be crucial to Goose’s profitability it may be too early for the company to provide solid guidance one way or another. 

I think the company is going to need to continue to tamp down growth expectations and the stock will take another leg lower. 

My strategy is to buy a put spread in the December expiration using the 40/35 strikes for a $2 net debit.  If shares are below $35 come Christmas time I will have a nice present of a 125% profit.  


GOOS shares were trading at $39.16 per share on Tuesday afternoon, up $0.01 (+0.03%). Year-to-date, GOOS has declined -10.43%, versus a 25.34% rise in the benchmark S&P 500 index during the same period.


About the Author: Option Sensei


Steve has more than 30 years of investment experience with an expertise in options trading. He’s written for TheStreet.com, Minyanville and currently for Option Sensei. Learn more about Steve’s background, along with links to his most recent articles. More...


More Resources for the Stocks in this Article

TickerPOWR RatingIndustry RankRank in Industry
GOOSGet RatingGet RatingGet Rating

Most Popular Stories on StockNews.com


Bullish or Bearish Stock Set Up?

The S&P 500 (SPY) record highs sounds pretty darn bullish on the surface. Yet as we dig below the surface there are some curious signals that point more Risk Off. This is especially true as we come into the next Fed meeting after a round of data that points to inflation still being too high...only further delaying the first rate cut. What does this all mean for stocks from here? Steve Reitmeister offers his latest views on the market outlook along with a preview of his top picks to stay on step ahead of the market. Read on for more...

Unveiling Adobe (ADBE) Q2 Earnings: What Lies Ahead for Investors?

Software giant Adobe Inc. (ADBE) has released its second-quarter earnings, revealing double-digit growth in both revenue and profits. Yet, concerns arise around the complexities of navigating growth in the face of advancing AI technologies. Let’s analyze ADBE’s recent performance and assess key fundamentals to uncover what lies ahead for investors…

3 AI Stocks to Invest in for the Next Technological Revolution

The AI market is experiencing a significant growth trajectory, driven by widespread application across various industries. Hence, it could be wise to invest in top AI stocks, Alphabet (GOOGL), Meta Platforms (META), and Alibaba Group Holding (BABA) for the next technological revolution. Read more...

Analyzing Broadcom’s (AVGO) Q2 Earnings: Worth Investing?

Driven by a surge in demand for its AI products, Broadcom (AVGO) reported robust earnings in its latest quarterly results, exceeding expectations on both top and bottom lines. However, is the stock’s recent announcement of a 10-for-1 stock split worth investing in? Keep reading to find out…

Stock Alert: Breakout or Fake Out?

The S&P 500 (SPY) officially made new highs this week. Perhaps a reason to celebrate more gains on the way...or perhaps there are signs this move is hollow leading to more downside soon on the way. To help solve this riddle, 44 year investment veteran Steve Reitmeister shares his views along with a trading plan and top picks to stay on the right side of the action. That is what Steve Reitmeister will cover in his latest commentary below. Read on for more...

Read More Stories

More Canada Goose Holdings Inc. (GOOS) News View All

Event/Date Symbol News Detail Start Price End Price Change POWR Rating
Loading, please wait...
View All GOOS News