Canada Goose (TSX: GOOS) & Affirm (AFRM): Why did the stocks tank?

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 Canada Goose (TSX: GOOS) & Affirm (AFRM): Why did the stocks tank?
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Highlights 

  • Canada Goose (TSX: GOOS) and Affirm (NASDAQ: AFRM, AFRM: US) is trending red hot in stock markets.
  • Stocks of Canada Goose tanked nearly 16 per cent on Thursday, February 10, while Affirm stock plunged by over 21 per cent after both the companies released their latest quarter earnings.
  • This decline in stock prices was followed by the apparel stock noting a trading volume of 1.9 million shares, and the payment stock noting a volume of 86.9 million shares this day.

Canada Goose (TSX: GOOS) and Affirm Holdings (NASDAQ: AFRM, AFRM: US) created quite a buzz in the stock markets on Thursday, February 10, with GOOS stocks tanking nearly 16 per cent and AFRM stock plunging by over 21 per cent.

At close, the apparel stock noted a trading volume of 1.9 million shares, while the payment company’s scrip stood at movement volume of 86.9 million shares.

Let's get into details about why these two North American stocks fell so sharply on Thursday.

Canada Goose Holdings Inc (TSX: GOOS)

Canada Goose’s stock price decline came after it posted its latest earnings report.

The winter apparel maker said that it saw its top line increase to C$ 586.1 million in Q3 FY2022, as compared to that of C$ 474 million a year ago. Its Non-IFRS adjusted bottom line was at C$ 152.6 million per basic share in the latest quarter, up from C$ 111.9 million in Q3 FY2021.

Also read: Cameco (CCO) stock up 14%! Why is the Canadian uranium firm trending?

However, the Toronto-based apparel manufacturer has revised its 2022 outlook, where it lowered its top line expectations to the range of C$ 1.09 billion to C$ 1.105 billion due to the omicron spread and resultant restrictions. 

Canada Goose (TSX: GOOS) Q3 FY2021 results

 Image source: © 2022 Kalkine Media®      

Data source: Canada Goose Holdings Inc

The C$ 3-billion market cap company has seen its stock plunge by over 29 per cent year-to-date (YTD).

Canada Goose stock closed at C$ 36.5 apiece on Thursday.

Affirm Holdings Inc (NASDAQ: AFRM, AFRM: US)

Affirm Holdings, which also posted its latest earnings on Thursday, posted a consolidated revenue of US$ 361 million for Q2 FY2022, representing a 77 per cent growth year-over-year (YoY).

However, the payment solutions company reported a net loss of US$ 159.7 million in the latest quarter, as compared to a loss of US$ 26.6 million in Q2 FY2021.

The fintech company also noted that it expects its gross merchandise value to be in the range of US$ 3.61 billion to 3.71 billion and its revenue to be between US$ 325 million and US$ 335 million in Q3 FY2022.

Affirm stock closed at C$ 58.68 apiece on Thursday, noting a nine-month return of over 21 per cent.

Bottomline

While both companies saw their stocks plummet on Thursday, some market experts believe that Canada Goose and Affirm Holdings could derive long-term value considering their fundamentals.

While this could give investors an option to grab these stocks at discounted prices, investors should ideally be alert about how such companies are doing during tough times and whether they can minimize unfavourable impacts.

Also read: Disney (DIS) & Corus (TSX:CJR.B): 2 entertainment stocks to buy

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