We see GOOS as an indirect, cheap way to participate in any China economic recovery. At 12X earnings, it is very cheap but it is leveraged. It has reported slower earnings growth (decline) but improvement is expected over the next two years. EPS was 98c last year, an expected $1.15 next and $1.24 the year after that. Debt is about 2.5X cash flow. We doubt tax loss selling is really a factor yet. Canada Goose's ambition to expand globally and across a broader range of outerwear categories could be pressured by dampened consumer demand for aspirational apparel in fiscal 1H (March year end). Improved warm-weather assortment provided a boost in 1Q, against a low revenue base, yet could account for only 7% of 2025 revenue, while 2Q sales (19% of full year) might drop by a mid-single digit percentage, in line with consensus. The typically wholesale-heavy quarter could rely on fewer partners -- 20% less sales projected in fiscal 2025 -- with direct-to-consumer (DTC) unlikely to offset, given price hikes and lower store traffic. Fiscal 2Q's DTC also faces three years of double-digit growth, making the comparable base more challenging. We think it is interesting. A sentiment shift could improve the multiple. But, we would still be OK with a tax-loss/rebuy strategy.
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