We’re hosting a presentation/Black Book on Thursday Dec 29th at 2pm on why we’d press Canada Goose (GOOS) short side at $18. We think this brand is past its prime, is facing increased competition at far lower prices, is losing consumer relevance and market share, and ultimately why we think both near-term and long term earnings expectations are too high. If we’re still short GOOS in mid 2023, we’ll be wrong – that’s how quickly we think this one will play out. The company’s inventory levels are among the highest in retail, and its wholesale strategy of ‘not allowing’ retailers to discount product (or else not get product next year) is on the verge of backfiring. We think wholesale accounts will order down materially in 2023, if not cut the brand off entirely. We’re seeing increased product flow through both physical and online discount channels, as consumer demand for the brand hits new lows – and that’s at a point where it’s sitting on $2.5bn in retail-value inventory on its books. The company guided down from $1.60 to $1.30 CAD last quarter, which is a start. But the first guide-down is never the last, and we think that GOOS will be lucky to earn $1.00 this year. Historical valuation metrics are a non-factor here. The reality is that for a declining brand that’s losing share with price points 2x the competition, it should test new trough multiples – which gets us to a $10-$12 stock. We’ll go our full thesis and push back points on our call next Thursday.
Call Details:
Date/Time: Thursday December 29th at 2pm ET.
Live Video Link CLICK HERE
Add To Calendar CLICK HERE
