Canada Goose stock drops as the brand raises full-year outlook

Yahoo Finance Live discusses a drop in shares of Canada Goose despite annual sales coming in above investor estimates.

Video Transcript

JULIE HYMAN: Let's take a look at a trending ticker that we're watching today. The goose is cooked. Canada Goose falling after forecasting-- no offense against [INAUDIBLE]. I can't resist a little wordplay sometimes. Shares are down 6%. Annual sales were forecast above estimates of sales as China bouncing back, but the retailer also saw losses narrow in the fourth quarter, boosted by growth in the Middle East and Europe.

I know you were looking at this one, Brad. Why is it down so much? Do we know?

BRAD SMITH: Well, they highlighted a few things in the earnings report, and it seems like the investors might be caught up on this broader, long-term plan that they've got ahead. About three or four pillars as a part of it.

And particularly for Canada Goose, I think it has really been able to push itself towards a more affluent consumer, higher end of the purchasing market as well. And if you did start to see some weakness within that part of the consumer-- which has showed up a little bit, beginning to, in the consumer confidence numbers as well-- then that could impact a company like Canada Goose.

JULIE HYMAN: Shares were higher early.

BRAD SMITH: Shares were higher earlier, which is what makes this interesting and this move. But just part of that kind of, like, three-pronged plan that they had put forward here-- one, accelerating consumer focus growth. They're also looking at building out a direct-to-consumer network, which I was pretty sure they already had because that's the only way that I've gotten a Canada Goose jacket in the past. And then they're also going to be investing into some new categories as well, and perhaps investors looking across that investment and trying to get a picture of what that spending into DTC, what that spending into the new categories could look like and trying to ramp that up.

JULIE HYMAN: You know I always like to look at short interest, and this one has high short interest. 27% of float--

BRAD SMITH: Oh, yikes.

JULIE HYMAN: Is shorted for Canada Goose. So a lot of people had been betting that the stock would go down, and now it is going [? up. ?]