Canada Goose Holdings Inc. hopes to use its acquisition of footwear company Baffin Inc. to explore the potential for Canada Goose footwear.
Chief executive Dani Reiss said Wednesday that purchasing Hamilton, Ont.-based Baffin for $32.5 million was “a dream acquisition,” but acknowledged that getting into footwear will come with challenges.
“It is a distinct business to apparel and it is difficult to cross over. Many others have chosen the faster and easier path of licensing, but struggle to find relevance,” he told a conference call with financial analysts.
“We would not be where we are today if we followed someone else’s playbook and it is so important that we continue to chart our own course with Baffin.”
The remarks came as shares in the company best known for its high-end winter parkas grew more than 20 per cent after it reported a better-than expected second-quarter profit and raised its outlook for growth this year.
Canada Goose shares were up $15.88 at $93.37 in early trading on the Toronto Stock Exchange.
Reiss said he plans to leverage Baffin’s technology and expertise to guide Canada Goose’s footwear strategy.
Canada Goose will also take advantage of its close association now with Baffin president Paul Huber, who created Baffin in 1976 and built the company into a brand synonymous with industrial workers and cold-weather enthusiasts. Since he founded it, it has become a leader in products for work and trekking in the world’s most challenging climates.
Reiss stressed that Canada Goose and Baffin will help each other, but the brands won’t be combined.
“We are not turning Baffin into Canada Goose or vice versa,” he said. “We are distinct brands with different distribution channels and different customers. That is not going to change.”
Canada Goose reported a second-quarter profit of $49.9 million or 45 cents per diluted share, up from $37.1 million or 33 cents per diluted share the year before.
On an adjusted basis, Canada Goose says it earned 46 cents per diluted share in the quarter, up from an adjusted profit of 29 per diluted share a year ago.
Analysts had expected a profit of 26 cents per share for the quarter, according to Thomson Reuters Eikon.
Revenue for the period ended Sept. totalled $230.3 million, up from $172.3 million in the same quarter last year.
In its outlook, Canada Goose said it now expects annual revenue growth of at least 30 per cent compared with its earlier forecast for at least 20 per cent.
The company also expects annual growth in its adjusted net income per diluted share to be at least 40 per cent compared with its earlier guidance of at least 25 per cent.