Why Canada Goose Holdings Inc. Is Soaring Over 10%

Canada Goose Holdings Inc. (TSX:GOOS)(NYSE:GOOS), one of the world?s leading makers of performance luxury apparel, released its fiscal 2018 second-quarter earnings results this morning, and its stock has responded by soaring over 10% in early trading. Let?s break down the quarterly results to determine if the stock could continue higher from here and if we should be long-term buyers today.

The results that ignited the rally

Here?s a quick breakdown of 12 of the most notable financial statistics from Canada Goose?s three-month period ended September 30, 2017, compared with the same period in 2016:

Metric	Q2 2018	Q2 2017	Change
Wholesale revenue	$152.07 million	$122.44 million	24.2%
Direct-to-Consumer (DTC) revenue	$20.26 million	$5.50 million	268.4%
Total revenue	$172.33 million	$127.94 million	34.7%
Gross profit	$87.09 million	$59.33 million	46.8%
Gross margin	50.5%	46.4%	410 basis points
Operating income	$48.23 million	$27.67 million	74.3%
Operating margin	28.0%	21.6%	640 basis points
Adjusted EBITDA	$46.40 million	$33.79 million	37.3%
Adjusted EBITDA margin	26.9%	26.4%	50 basis points
Income before income taxes	$44.64 million	$25.23 million	76.9%
Adjusted net income	$32.88 million	$23.74 million	38.5%
Adjusted net income per diluted share (EPS)	$0.29	$0.23	26.1%

Updated outlook on 2018

As a result of the company?s ?stronger than expected? growth, it raised its full-year outlook on fiscal 2018. Here?s a breakdown of its new outlook compared with its previous one:

Metric	New Outlook	Previous Outlook
Annual revenue growth	At least 25%	Mid to high teens
Adjusted EBITDA margin expansion	At least 50 basis points	Flat to modestly expanding
Annual growth in adjusted EPS	At least 35%	Approximately 20%

What should you do with Canada Goose now?

It was a phenomenal quarter overall for Canada Goose, and it posted very strong results for the first half of the fiscal year, with its revenue up 39.6% to $200.54 million, its gross profit up 56.8% to $100.34 million, and its adjusted EPS up 28.6% to $0.18 compared with the first half of fiscal 2017. The company?s second-quarter adjusted EPS also crushed the consensus estimate of analysts, which called for $0.21, so I think the market has responded correctly by sending its stock soaring. Furthermore, I think the stock could continue higher from here, because I think investors will continue to pile in to gain exposure to one of North America?s fastest-growing brands.

Canada Goose?s stock has rallied more than 30% since I first recommended it in August following its first-quarter earnings release and more than 16% since October 4, and I think it still represents a great long-term investment opportunity, so take a closer look and consider beginning to scale in to a position today.

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Fool contributor Joseph Solitro has no position in any stocks mentioned.