There is no denying the robustness of Canada Goose’s astronomical revenue growth: the company achieved a 38.3% compounded annual revenue growth rate from 2014 to 2016. Anecdotally, fellow contributors have pointed to a proliferation of Canada Goose jackets on college campuses.These contributors are certainly not being deceived by a mirage, and they are also probably starting to see the Canada Goose logo appear on clothing items other than the brand’s signature parka. As the chart below demonstrates, Canada Goose’s growth strategy is levered to the company’s ability to expand into new products:There have been recent articles regarding the IPO and financials for Canada Goose (NYSE:GOOS), a luxury apparel company, but this writing will be more about the Canada Goose brand and what it means, future revenue streams and their overall potential.
The recent IPO and hype surrounding Snap (NYSE:SNAP) have motivated me to write about a potentially new iconic brand in Canada Goose, and another IPO I’m very excited for in Peloton.As an owner of one of these parkas, I can legitimately say that there is a strong demand and desire for these jackets. The materials used to construct these parkas and the attention to detail are among the best in the luxury apparel industry. The jacket pictured is the Canada Goose Expedition parka, which retails for $1,000 in the United States. The jacket features a number of various pockets, snow skirt, coyote fur hood, velcro storm flaps, fleece-lined chin guard that I find extremely comfortable and a heavy duty hanging strap on the back of the jacket with “Expedition” sewn within among many other features. The jacket also contains white duck down inside and is field-tested for the coldest conditions.
Lastly, another unique useful feature is the coyote fur hood, which contains a metal wire that allows you to form the fur hood around your face to your liking. The ending of this article also contains a few more pictures of the design and materials of the jacket.Does the company’s story warrant an extraordinary valuation, or is it succumbed to too many competitive pressures to deliver on expectations?Contrary to what many would assume, the polarizing company described above is not the exhaustively debated Snap (NYSE: SNAP), it is Canada Goose (NYSE: GOOS). The luxury outerwear brand possesses a valuation unparalleled within its industry, and an analysis of its strategy and growth limitations suggests investors may be overpaying for the stock.