Christopher Mroz of AIFAM Group presented his in-depth investment thesis on Canada Goose (US: GOOS) at Best Ideas 2020.
Thesis summary:
Canada Goose (US: GOOS) is a 63-year-old manufacturer and retailer of outdoor apparel for men, women, youth and children — traditionally known for the famous parka. Canada Goose is an organic growth story controlled by an excellent family owner/operator and Bain Capital. Multiple upcoming catalysts drive future growth, including a further expansion into China, an upcoming brand extension into shoes, and continued diversification into apparel and light jackets.
Since coming public, the stock and sales have doubled; however, the underlying operating profits have gone up five-fold. Fixed cost leverage has become more apparent as the business continues to scale and shift from the low margin wholesale business to the direct-to-consumer channel, which has a gross margin uplift of ~ 3,000 basis points. It is rare to find a business growing top-line at a 40% CAGR in tandem with expanding margins (GM +2,200 bps; five years), trading at a discount to luxury peers, while stock is off almost 50% from all-time highs.
Listen to this session:
slide presentation audio recording
About the instructor:
Christopher Mroz serves as a Director and Analyst at AIFAM Group, which consults a select number of top-tier institutions on their investment portfolio, with a focus on alternative investments. AIFAM Group’s value-added consulting approach includes education on alternative investments to employees and decision-makers of the client organization.
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