Recently, high-end functional clothing brand Canada Goose released its financial data for the first quarter of fiscal year 2025 as of June 30, 2024. During the reporting period, the brand's global revenue increased by 4% year-on-year, reaching CAD 88.1 million. Among them, the revenue in the Asia Pacific market increased by 25.7% year-on-year, and the revenue in the Greater China region increased by 12.3% year-on-year.
Canada Goose, a Canadian clothing brand founded in 1957, is globally popular for its fashionable and luxurious high-end positioning. It has 70 specialized stores in multiple countries around the world. Entered the Chinese market in 2018 and currently has nearly 30 stores in the country.
Canada Goose has had a solid start to the year, with the 2024 Spring/Summer collection attracting new and existing customers to shop in store or online, contributing to our revenue growth in the first quarter, with particularly strong performance in the Asia Pacific region, "said Dani Reiss, Chairman and CEO of Canada Goose.
Remove tags, seasonal series drive growth
In the revenue growth of the first quarter of fiscal year 2025, the 2024 Spring/Summer collection played an indispensable role.
It is reported that the Spring/Summer collection aims to provide lightweight styles suitable for warm and humid seasons. In the first quarter of fiscal year 2025, some products in the Spring/Summer collection will perform well and become bestsellers.
In fact, as a high-end functional clothing brand, although Canada Goose is famous for its down jackets, it is not limited to down jackets. Around clothing, Canada Goose continues to expand its product line, mainly divided into multiple categories: heavy down coats, lightweight down jackets, other outerwear (including raincoats, jackets, fleece jackets, and vests), apparel (including knitted series, sportswear, T-shirts), footwear and accessories (including sneakers, boots, hats, scarves, gloves, brim, socks, and bags).
According to Canada Goose's financial report, from fiscal year 2022 to fiscal year 2024, the revenue of non parka coat categories accounted for 38%, 43%, and 46% respectively, showing a significant year-on-year growth trend.
Data shows that in the first quarter of fiscal year 2025, brand clothing, windbreakers, and footwear products all achieved year-on-year growth, and their revenue and sales volume expanded in the overall combination of DTC direct sales channels and group procurement channels.
During the reporting period, Canada Goose also announced Haider Ackermann as the brand's first creative director and released a limited edition PBI hoodie designed by him, which was a great success. And launched the brand's first rain boots, the Vancouver rain boots, further expanding its functional and fashionable footwear product line.
In conjunction with the launch of the new series, Canada Goose has also launched brand activities, including marketing, advertising, and social media campaigns, to increase consumer awareness and interest in the new series. Moreover, by providing more suitable size and style combinations based on local demand, the brand has increased its actual sales ratio and accelerated its launch speed.
I am encouraged by our early progress in key operational matters for fiscal year 2025. We have driven the development of our brand and products, welcomed our first brand creative director Haider Ackermann, advanced our retail execution plan, and introduced new ways of working to inspire greater operational discipline and efficiency throughout the organization, "said Dani Reiss.
DTC channel and Asia Pacific business both achieved growth
The second important source of growth is due to DTC (Direct Sales Channel). In the first quarter of fiscal year 2025, Canada Goose's global DTC direct sales channel revenue increased by 13%.
DTC, meaning direct to consumer direct sales channel, is a channel marketing strategy that differs from group procurement and tiered sales. In 2014, Canada Goose launched an e-commerce website and embarked on a DTC business transformation. At present, DTC business revenue accounts for more than 2/3 of the company's total revenue. According to Canada Goose's financial report, DTC revenue accounted for 71.3% of total revenue for the fiscal year 2024, and 66.3% for the fiscal year 2023.
The company mentioned in its financial report that sales channels and marketing strategies have evolved as the brand shifts from functional to high-end lifestyle brands. The company has shifted from relying mainly on group procurement to focusing on direct to consumer retail channels, deepening its connection with customers, better managing inventory, and enhancing brand image.
In the first quarter of fiscal year 2025, in terms of internal operations, the brand improved operational excellence by streamlining product development and procurement teams, optimizing capital layout, and reducing inventory levels by 7% year-on-year.
Up to now, Canada Goose has maintained investment in the global market and DTC channels. Currently, the company has a total of 70 specialized stores worldwide and nearly 30 specialized stores in China. In July of this year, the company opened two new specialized stores in Greater China, located in Wuhan and Cotai City, Macau.
The number of specialized stores in China is sufficient to demonstrate Canada Goose's emphasis on the Chinese market. Since entering the Chinese market in 2018, Canadian geese have continuously cultivated and achieved significant results. The brand has successfully attracted the attention of young consumers through collaborations with local designers, such as Chinese designer Angel Chen, Feng Chen Wang, creative director Wang Fengchen, and artist Xu Zhen, to create capsule collections.
In fact, China and the Asia Pacific market are important growth engines for Canada Goose. In the first quarter of fiscal year 2025, the revenue of the Asia Pacific market increased by 25.7% year-on-year, and the revenue of the Greater China market increased by 12.3% year-on-year. Driven by strong consumer demand for seasonal series and the performance of sales teams, comparable sales of DTC direct sales channels in China and Japan have achieved double-digit growth.
From fiscal year 2020 to fiscal year 2023, revenue in the Asia Pacific market continues to climb. In the fiscal year 2024, the revenue share of the Asia Pacific region has significantly increased to 38%, and for the first time, Greater China has become the largest market for Canadian geese.
In July, Canada Goose also released its ESG report for the fiscal year 2024, showcasing the company's substantial progress in sustainable development. The report emphasizes the company's efforts in reducing carbon emissions, successfully achieving a 6% year-on-year decrease in Scope 1 and Scope 2 emissions, while adopting a more sustainable strategy in material procurement to ensure that products currently produced in Canada do not contain PFAS.
In addition, the company has donated a large amount of fabrics and materials to the northern regions of Canada through the Resource Center program, setting a record high in donations and demonstrating its commitment to social responsibility. These measures collectively demonstrate Canada Goose's long-term commitment to the environment and social responsibility.