Canada Goose is entering its most important selling season with declining comparable sales, softer store traffic and signs that consumers are waiting for colder weather before purchasing winter apparel.
The Toronto-based luxury outerwear company reported a 7.5% decline in global direct-to-consumer (DTC) comparable sales in its second fiscal quarter ended September 27, 2026, following a 3.2% decline in the previous quarter. Management said comparable sales remained negative in October, when warmer weather delayed seasonal purchases.
The weakness contrasts with continued revenue growth. Canada Goose generated $274 million in quarterly revenue, up 5.9% on a reported basis and 4.9% in constant currency, according to its second-quarter financial results.
Store Traffic Weakens Despite Better Conversion
Lower traffic across the company’s retail network was a principal factor behind the comparable-sales decline. Customers who visited stores converted at higher rates, however, while average revenue per unit and units purchased per transaction also increased. Positive e-commerce comparable sales in North America and Asia Pacific helped offset some of the weakness in physical stores.
Canada performed better than several international markets. Canadian comparable sales were flat despite softer traffic, offset by improved conversion in stores and online. Across North America, comparable sales declined 4%, with management identifying U.S. stores as the region’s principal challenge.
In Asia Pacific, revenue increased approximately 21% in constant currency, although comparable sales declined 4%, partly reflecting weaker traffic in mainland China. In Europe, the Middle East and Africa (EMEA), comparable sales fell 27% and revenue declined approximately 14%.
The company also experienced temporary merchandise availability problems during the implementation of a new logistics network. Those delays affected DTC operations in EMEA and Asia Pacific, while some EMEA wholesale deliveries shifted into the third quarter. The regional results therefore reflect operational disruption as well as softer consumer demand.
Warmer Weather Delays Winter Purchases
The October trading update raises another question for a retailer whose sales remain heavily influenced by the winter season. Management said the weakness continued beyond the September quarter-end but did not quantify October’s comparable-sales decline.
“Consumers are increasingly shopping closer to need, with demand more closely aligned to colder weather,” said Neil Bowden, Canada Goose’s chief financial officer, during the November 5 earnings call.
Bowden said DTC comparable sales remained negative in October as softer traffic persisted and warmer weather delayed seasonal purchasing. The company did not disclose separate October figures for Canadian stores.
Canada Goose is responding with targeted local marketing, customer activations, improved merchandise availability and greater emphasis on clienteling. For seasonal apparel retailers, purchases concentrated closer to the onset of cold weather can complicate inventory allocation and marketing schedules. Canada Goose has not announced additional markdowns in response to the slowdown.
Higher Margins Offset Some Retail Pressure
Despite weaker comparable sales, gross margin increased to 66.8% from 64% a year earlier. The 280-basis-point improvement reflected favourable merchandise mix, pricing, production efficiencies and lower freight and duty costs.
Wholesale revenue rose 4.6% to $128.2 million, supported by order-book shipments, in-season demand and travel retail. DTC revenue reached $129.6 million, up 2.7% as reported and 0.6% in constant currency, with new stores and e-commerce growth helping offset the comparable-sales decline.
Higher gross profit came alongside increased operating expenses. Selling, general and administrative expenses rose to $204.5 million from $183.3 million, reflecting marketing investment and costs associated with the expanded retail network.
The company recorded an adjusted earnings-before-interest-and-taxes (EBIT) loss of $21.6 million, compared with a $14.2-million loss a year earlier. Adjusted EBIT margin fell to negative 7.9% from negative 5.5%, although first-half adjusted EBIT margin improved by 170 basis points. Adjusted EBIT is a non-IFRS measure.
Inventory Builds Ahead of Peak Season
Canada Goose ended September with $496.6 million in inventory, up 8% year over year. Management attributed the increase to a broader assortment, a larger wholesale order book, planned winter production and DTC sales below expectations.
Inventory turnover nevertheless improved 8% from a year earlier, providing an important counterpoint to the higher inventory balance. The company has not said its inventory position requires unusually aggressive promotions, although the timing of winter demand will be important for selling through seasonal merchandise.
Management maintained its fiscal 2027 outlook for low-single-digit revenue growth and an adjusted EBIT margin of 11% to 12%. The outlook assumes growth in both DTC and wholesale revenue while acknowledging softer traffic and consumer demand in key markets.
Year-Round Strategy Meets a Seasonal Test
Canada Goose has been expanding beyond winter parkas into apparel, rainwear, windwear and lifestyle products designed for more seasons. As Retail Insider reported in July, those newer categories accounted for nearly 40% of first-quarter revenue, a spring and summer figure that should not be interpreted as the company’s annual merchandise mix.
Chairman and CEO Dani Reiss said during the latest earnings call that non-down and non-core products continued growing faster than traditional categories, which also grew. Management reported significant year-over-year growth in its Spring/Summer 2027 wholesale order book, indicating continued interest among retail partners in the broader assortment.
The diversification strategy gives customers more reasons to shop throughout the year, but the latest results show that winter remains commercially important. Canada Goose must build newer categories while improving traffic and productivity in its existing retail network.
Canada Goose enters winter with stronger gross margins, a larger wholesale order book and more inventory, but also with negative comparable sales extending into October. Management is relying on localized marketing, better product availability and improved conversion to strengthen second-half performance.
Canada’s flat comparable-sales result provides some stability relative to weaker international markets. The coming months will test whether colder weather brings more shoppers into stores and whether the company can improve retail productivity while meeting its annual outlook.
