By Adriano Marchese

Canada Goose Holdings downgraded its expectations for the year as increased pressure on luxury spending weighed on its fiscal second quarter sales.

The Canadian winter clothing manufacturer said it now expects total revenue growth for the fiscal year could be between a low-single-digit decrease and a low-single-digit increase. Previously it expected low-single-digit growth.

The adjusted earnings before interest and tax margin has also been downgraded to a range of shrinking by 60 basis points to rising by 60 basis points, where previously it expected a rise of at least 100 basis points.

Adjusted earnings per share are now expected to grow at a slower pace, in the mid-single digits, compared with a previous expectation of growth in the mid-teens digits.

"Our revised outlook reflects the increased pressure on global luxury consumer spending and incremental planned marketing spend compared to our initial outlook, as well as a more focused and strategic product assortment," the company said.

For the second quarter ended Sept. 29, Canada Goose posted net income of 5.4 million Canadian dollars ($3.9 million), or C$0.06 a share, up from C$3.9 million, or C$0.04 a share, in the comparable quarter a year ago.

Adjusted earnings were C$0.05 a share, in-line with analysts polled by FactSet.

Total revenue fell to C$267.8 million from C$281.1 million. Analysts expected a steeper decline at C$257.1 million.

The decline came as direct-to-customer revenue fell 5% to C$103.9 million as comparable sales were down 13%. Wholesale revenue also fell, down 15% to C$137.3 million as it continues to lower its order book in this segment.

Other revenue rose C$16.9 million to C$26.6 million as it continues to clear slow-moving and discontinued inventory as part of the company's inventory exit strategy.

Inventory for the quarter stood at C$473.4 million, a 9% reduction from a year earlier, due to a combination of sales through its DTC, wholesale, and other channels, and a temporary reduction in production levels.

Write to Adriano Marchese at adriano.marchese@wsj.com

(END) Dow Jones Newswires

November 07, 2024 07:31 ET (12:31 GMT)

Copyright (c) 2024 Dow Jones & Company, Inc.