Canada Goose (GOOS), mcap=$2.3bn, price $21.50 vs $25.00

GOOS pitch:
– Luxury outerwear parka-focused brand trading attractively at near all-time low valuation on trough earnings.
– Market sentiment hit rock bottom, driven by one of the worst earnings performances amongst peers, concerns around China exposure, and other one-offs.
– The market incorrectly believes that current profitability is the new norm and that GOOS’s growth runway is limited.
– The company is set to recover from ~40% depressed store productivity due to COVID-induced demand barriers and is also set to continue executing on its highly accretive, long runway of double-digit % DTC retail footprint expansion.

GOOS valuation:
– Trades at a 40% discount to fair value estimate.
– EBIT is expected to grow to C$500m by FY28.
– The base case assumes a 15x EBIT multiple.

Exp. gain: +60% to $30/share.

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