Canada Goose stock takes a hit from warmer weather and shaky economic conditions

It ironically might be one of the coldest winters for one of the brands best known for keeping its customers warm.

Last week, Canada Goose’s stock hit a record low, as warmer weather and poor consumer trends in some of its key markets continue to drag down sales, according to Bloomberg. The brand’s stock last Thursday “fell 4.4% to close at $12.16,” after peaking at over $24.

• As of Monday’s close, the stock was at $12.17.
• Analysts told Bloomberg that the economic outlook in China, which they estimate accounts for as much as 25% of the company’s sales, is particularly grim, given the country’s turbulent real estate market and lower consumer spending.

Wells Fargo analyst Ike Boruchow is bearish on the stock, and told Bloomberg that warmer weather forecasts around Black Friday and the holiday shopping season could hurt the brand. Although Canada Goose had a strong previous quarter because of a rebound in China, it fell short of Wall Street expectations in Q2 as a result of shaky demand in the US. Boruchow said the United States’ “weakening economic outlook” also doesn’t bode well for the company.

The big picture: The unseasonably warm weather isn’t only affecting Canada Goose. An H&M executive told Reuters in September that winter wear sales have been sluggish, and the company has cut prices as a result. Andy Bond, executive chairman of European company Pepco Group, echoed this sentiment during an earnings call in September.

• “When it’s 26 degrees (Celsius, 79 Fahrenheit) you don’t tend to sell coats,” Bond told investors.