The flight path for Canadian outerwear giant Canada Goose (TSE:GOOS) (NYSE:GOOS) has been looking a little erratic these days. A little over a month ago, we got a look at plans for layoffs, and now word emerged that Canada Goose may not have been wholly on the up-and-up regarding security trading. An investigation is underway, and investors staged another pullback that left Canada Goose shares fractionally lower.
More specifically, the laws that may have been violated—and that the investigation will look into—are related to U.S. securities laws, not Canadian. The investigation is connected to the March 26 announcement that Canada Goose’s plan to lay off about 17% of its corporate workforce would yield immediate cost savings. It would also make its organizational structure simpler and make the business more efficient.
That led Levi & Korsinsky, a law firm, to team up with the Pomerantz law firm to investigate and called on shareholders who saw losses following the announcement to contact them for more information.
Changing Seasons, Changing Market
It was already a bad time for Canada Goose to begin with. The company that’s focused so much on outerwear is about to enter a period in which outerwear will be largely an afterthought, if not an outright bad memory. We’re going into the warmest periods of the year here, and no one will be thinking about a winter coat beyond getting their old one cleaned ahead of next year.
And it certainly doesn’t help that consumers are still under fire from surging inflation, which will keep their choice of any replacement outerwear away from a more “luxury” brand like Canada Goose. With Canada Goose about to declare earnings next week, these facts are likely to weigh on figures pretty hard.
Is Canada Goose a Good Stock to Buy?
Turning to Wall Street, analysts have a Hold consensus rating on GOOS stock based on two Holds assigned in the past three months, as indicated by the graphic below. After a 43.6% loss in its share price over the past year, the average GOOS price target of C$21.38 per share implies 37.13% upside potential.
