Canada Goose Holdings Inc. saw its stock drop to C$14.78 ($10.82) following a third-quarter earnings report that fell short of Wall Street expectations. For the period ending Dec. 28, the company recorded net income of C$134.8 million, or C$1.36 per share—a decline from the C$139.7 million reported during the same quarter last year. While adjusted earnings reached C$1.43 per share, they trailed analyst forecasts by C$0.20, according to FactSet data.

The Cost of Expansion

The profit squeeze stemmed largely from a surge in selling, general, and administrative expenses, which climbed to C$313.6 million. This increase included a one-time bad debt charge linked to a U.S. wholesale partner, alongside higher investments in retail operations and global marketing. Gross margins also narrowed slightly to 74%, a shift Chairman and CEO Dani Reiss described as a strategic move to accelerate brand momentum and diversify the product lineup.

Despite the bottom-line pressure, top-line growth remained resilient. Total revenue rose 14% to C$694.5 million, outperforming expectations on the back of strong direct-to-consumer (DTC) sales in North America and the Asia Pacific region. Wholesale revenue also saw a 17% boost, reaching C$88.3 million, though the company attributed much of this gain to the specific timing of partner shipments.

Inventory levels remained stable at C$408.7 million, matching figures from the previous year. This suggests the luxury brand is managing its stock levels effectively even as it navigates a more expensive operating landscape and shifts its focus toward higher-margin direct sales channels.