Luxury Puffer Coat Showdown: Moncler vs. Canada Goose

Italian luxury brand Moncler and Canadian outerwear icon Canada Goose, both publicly traded companies, are currently in a league of their own when it comes to valuation and financial performance.

Despite comparable market valuations, Moncler outshines Canada Goose in terms of revenue, boasting three times the turnover of its Canadian counterpart with nearly six times more retail stores.

Moncler’s impressive growth trajectory, marked by a 16% annual increase in sales and operating profit over the last five years, stands in stark contrast to Canada Goose’s more modest 10% annual growth rate coupled with a decline in operating profit. This stark performance gap is one of the defining factors behind the discrepancy in enterprise value between the two brands.

In terms of capital returns, Moncler also takes the lead with superior returns on capital. While Canada Goose may seem to have slightly higher return on equity on paper at 25% compared to Moncler’s 22% average over the last five years, Moncler’s excess cash reserves indicate a more favorable position.

Moncler’s robust financial position is further underscored by its level of debt in relation to earnings before interest, taxes, depreciation, and amortization (EBITDA), demonstrating a healthier balance sheet compared to Canada Goose, which carries a net debt more than twice its EBITDA.

When it comes to cash flows, Moncler appears to be in a much stronger position, prioritizing dividend distribution and having the capacity to double these dividends if it halts its expansion plans. On the other hand, Canada Goose faces more constrained cash flows, reflecting decisions to manage working capital less efficiently and prioritize share buybacks.

Over the past five years, Moncler has returned close to €800 million to its shareholders, significantly outpacing Canada Goose’s $300 million returns. Notably, Moncler achieved these returns without resorting to debt financing, setting it apart from its Canadian counterpart.

Despite the disparity in financial performance, both companies are valued relatively similarly in the market, with Moncler trading at around 20 times its operating profit and Canada Goose at around 18 times. While Moncler aligns with its historical ten-year average, Canada Goose has notably fallen from its previous pedestal of around 35 times operating profit.