David Olive: Luxury parka maker Canada Goose soars on cold weather sales while Resolute Forest Products slumped on a pandemic-induced drop in demand — here are this week’s corporate winners and losers

Canada Goose Holdings Inc. (GOOS-T)

The luxury parka maker blew the doors off in reporting its financial performance this week for its critical third quarter, the winter season which traditionally accounts for almost half its annual sales. The value of CG shares soared as much as 28 per cent Thursday when the firm reported record quarterly sales of $ 474 million, beating analysts’ forecasts by 14 per cent, and adjusted profits of $ 1.01 per share, more than 17 per cent better than forecast. E-commerce sales jumped 39 per cent, compensating for pandemic-induced store closures. And sales were strong in China, where Canada Goose has more than doubled its store count in recent months.

Hexo Corp. (HEXO-T)

Hexo shares were boosted this week by news of a $ 9.2-billion blockbuster acquisition of the U.K.’s GW Pharmaceuticals PLC, one of the most prominent makers of medicinal cannabis products, by Britain’s Jazz Pharmaceuticals PLC. The deal lends credibility to an investor thesis that Hexo and other pot firms with a strong medical-product line-up will face fewer regulatory hurdles than recreational pot producers in bids to expand into the huge U.S. and European markets. The liquidity problems that once had Hexo flirting with insolvency are a fading memory, as the refinanced firm now has adequate capital and a shot at achieving profitability this year, backstopped by market-share dominance in Quebec.

MEG Energy Corp. (MEG-T)

A recent one-year high in oil prices has lifted shares of MEG and other Athabasca producers. Investors are betting on oil to at least sustain its current $ 56 (U.S.) per barrel price and strengthen further in 2021, a faith based on stronger-than-expected North American economic recovery and anti-COVID-19 vaccine deployment. MEG impressed investors in raising almost $ 770 million in a January offering of bonds with a 2029 maturity. That gives the midcap oil firm breathing room to develop its in situ projects in the southern Athabasca region. The bond deal was also a vote of confidence: It was six-times oversubscribed, suggesting as much as $ 4 billion worth of demand for MEG debt.

Losers

Resolute Forest Products Inc. (RFP-T)

Shares of the diversified forest-products company slumped this week after Resolute reported loss of $ 67 million in its fourth quarter. That was a considerable improvement over Montreal-based Resolute’s loss in the same period a year earlier, and revenues in the quarter improved by more than 15 per cent from 2019’s fourth quarter. But Bay Street expectations of better results were built into the preannouncement stock price, which fell as much as 13 per cent with Thursday’s earnings release. Resolute’s lumber business got a lift from 2020s home renovation boom, but its paper products operations suffered from a sharp pandemic-induced drop in demand.

Telus International (Cda) Inc. (TIXT-T)

TI made its debut this week as one of Canada’s biggest publicly traded tech companies with an initial public offering expected to raise $ 627 million. The stock was fully priced when it hit the market, given heavy interest in the offering, and slipped a bit in its first two days of trading. TI, a spinoff of Vancouver-based telecom Telus Corp., is a major provider of online services to blue-chip clients. It will use proceeds from the offering to pay down debt and achieve further growth by acquisition, having spent about $ 2.5 billion since 2019 on purchases that gained it footholds in lucrative niches of the fast-growing online-services industry.

Fairfax Financial Holdings Ltd. (FFH-T)

The Toronto conglomerate has given up the windfall gains it reaped in recent weeks from the bizarre run-up in shares of BlackBerry Ltd., which rediscovered gravity after the Reddit day traders who pumped up BB, GameStop Corp. and other unloved stocks curbed their enthusiasm. In late January, it appeared that Fairfax’s 8.3 per cent stake would yield a $ 1.5-billion pre-tax gain for Fairfax. But that gain has all but evaporated. Not long ago, Fairfax was suffering a paper loss of about $ 64 million on its BB stake. BlackBerry’s current humbled state suggests that Fairfax will once again be under water with its BB investment.

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