GOOS

Canada Goose Holdings Inc - Ordinary Shares (Subord Vot Shs)

Consumer


Presented:12/13/2019
Price:$38.86
Cap:$4.26B
Current Price:$10.76
Cap:$1.09B

Presented

Date12/13/2019
Price$38.86
Market Cap$4.26B
Ent Value$5.22B
P/E Ratio40.39x
Book Value$2.71
Div Yield0%
Shares O/S109.65M
Ave Daily Vol1,801,418
Short Int33.88%

Current

Price$10.76
Market Cap$1.09B
Canada Goose Holdings, Inc. designs, manufactures, distributes and retails outerwear for men, women and children. It operates through the Wholesale and Direct to Consumer segments. The Wholesale segment comprises sales made to a mix of functional and fashionable retailers, including department stores, outdoor specialty stores, individual shops, and to international distributors. The Direct to Consumer segment refers to the online sales through its e-commerce sites to customers in Austria, Belgium, Canada, China, France, Germany, Ireland, Luxembourg, the Netherlands, Sweden, the United Kingdom, and the United States and sales to customers from company-owned retail stores in Boston, Calgary, Chicago, London, New York City, and Toronto. The company was founded in 1957 and is headquartered in Toronto, Canada.

Publicly traded companies mentioned herein: Canada Goose Holdings Inc (GOOS), Columbia Sportswear Co (COLM), Moncler SpA (MONC IM), VF Corp (VFC)

Highlights

The presenter is long shares of Canada Goose Holdings Inc (GOOS), which he views as a high-quality luxury brand still in the early innings of its growth story. The company is growing revenue >20% and EBITDA >25% with significant long-term runway on the back of geographic expansion and a strategic shift to direct-to-consumer (DTC) model. Over the next few years, delivering on management’s medium-term guidance of ~20% annual revenue growth and margin expansion will be enough to drive GOOS’s share price, which currently trade at ~$40. The presenter’s base case assumes a 17% revenue CAGR from FY2020 – FY2023 and EBITDA margins increasing from ~30% to 34%. He applies the current 16x forward multiple to his FY2023 EBITDA to reach a price target of ~$62 per share by March 2022, an IRR of ~21%. In his opinion, there is potential for shares to appreciate sooner if the company can continue to deliver on numbers in the meantime.

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Idea Discussion

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