One of our favorite retail shorts, Canada Goose Holdings (GOOS), was recently crushed – dropping by -30% in a single day – after reporting lackluster fiscal 2019 earnings results.
But according to Hedgeye Retail analyst Brian McGough, the stock still has plenty of downside. He sees 30 to 40% drawdowns thanks in part to its over-reliance on its signature winter coat and poor execution of new products lines.
“A typical fashion growth curve goes up, peaks, and as it tails off, it has something to take its place, then it happens over and over again. Then you get to somewhat volatile, but still long-term profitable growth,” McGough explains.
“Canada Goose’s jacket is past its prime…and now it’s trying to layer all these other products on it and that’s what I think is going to be its undoing.”
Watch the full video above for more.