This Winter-Clothing Manufacturer’s Stock Slid 8% On Thursday: CFO Says ‘Labor Is An Investment That Delivers Revenue’

CFO Neil Bowden said that the investment in marketing in the first quarter was higher than it had been in the prior year and that it is expected to continue.

Canada Goose (GOOS) CFO Neil Bowden said on Thursday the red parka maker expects investment in marketing to continue and remain higher as it invests more into new launches heading into its main selling season and looks to open more stores this year.

“Clearly, the investment around marketing in the first quarter was higher than it had been in the prior year. We would expect that to continue,” Bowden said on a post-earnings call.

“The other areas of investment that we're looking at are that we're going to open some new stores this year … and within those stores, we see that labor is an investment that delivers revenue,” he added.

Retail sentiment on Canada Goose remained in the ‘bearish’ territory, with chatter at ‘high’ levels, according to Stocktwits data.

Shares of Canada Goose were down nearly 8% in early trading after the company posted a wider-than-expected first-quarter loss.

However, its investments to offer more promotions and attract customers to buy its hoodies and parka jackets paid off with revenue in the quarter jumping 22.4% to C$107.8 million ($77.9 million).

Bowden added that about 75% of its products are manufactured in Canada and virtually all comply with the United States-Mexico-Canada Agreement (USMCA) requirements, making them currently exempt from tariffs.

“For our European products, we are paying modestly higher tariffs, but they will continue to have a minimal financial impact,” he added.

NYSE-listed shares of Canada Goose have gained over 17% so far this year and risen nearly 9% in the last 12 months.

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