Williams Trading Upgrades Canada Goose (GOOS) to Hold

Williams Trading analyst Sam Poser upgraded Canada Goose (NYSE: GOOS) from Sell to Hold.

The analyst comments "We are lowering estimates and price targets across our coverage, reflecting an average reduction of the P/E multiple by 20.4%. We are also downgrading DKS & SCVL from Buy to Hold, SHOO from Hold to Sell, and upgrading GOOS from Sell to Hold, and lowering estimates and price targets on all companies in our coverage. The uncertainty around the impact of tariffs on margins, pricing, and most importantly demand has led us to these changes. Further, we would not be surprised if all the companies in our coverage either do not provide forward guidance or withdraw forward guidance. Based on our checks, it appears that the additional 145% tariff on goods from China has frozen product shipments to the U.S., challenging sales and margin opportunities for those brands that rely on China for its products, and do a large percent of sales in the U.S. (CROX & SHOO). We also expect that inventory levels in mid 2025 will be very high as companies rush to bring goods into the U.S. ahead of a potential tariff increase after the 90-day reprieve ends for product from countries other than China. The overall footwear industry appears somewhat stuck at this time as it copes with the impact of the tariffs, as future planning is nearly impossible. The retailers in our coverage appear to be awaiting decisions from the brands before future buying decisions are made. Demand planning will be the key, as far as we're concerned, and risks to demand are increasing, in the same manner that likelihood of increased inflation is. While the current tariff threats are far different that what happened during Covid, adjusting inventory levels in anticipation of softer sales trends will protect margins, as it did in 2021 & 2022. Chasing demand has proven and continues to prove profitable. Birkenstock, Hoka, On, and UGG, are the best positioned brands in our coverage as they have product people want, and continue to improve upon their relative scarcity models. Lastly, Skechers is well positioned due its compelling value product offerings, and its best in class supply chain."

For an analyst ratings summary and ratings history on Canada Goose click here. For more ratings news on Canada Goose click here.

Shares of Canada Goose closed at $8.01 yesterday.

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