In this segment from the Industry Focus: Consumer Goods show, the cast revisits initial public offerings from the class of 2017 -- public market debuts in the consumer and retail sector that they first covered last year.

First up is luxury apparel company Canada Goose (NYSE:GOOS), which to outperform for shareholders.

A full transcript follows the video.

This video was recorded on June 5, 2018.

Vincent Shen: The first to IPO was Canada Goose. They priced their deal in March. The stock is up 240% from that initial offering price -- pretty impressive. Just year to date, shares are up over 35%. When we first covered Canada Goose, we were impressed by several things, including the very robust growth that they're enjoying, especially for an apparel company, but also the brand cachet they have, their pricing power, and the multi-pronged approach that management has taken to its sales channels. It has its wholesale partners, but they're also really focused on their company-owned stores, their country-specific online portals. Those last two make up their direct-to-consumer business. Management has really focused on growing out that segment, which happens to command much higher margins than the wholesale business.

Asit, what's the latest going on with Canada Goose?

Asit Sharma: The latest that we probably want to pay attention to is something that you just mentioned, Vince, it's those margins. As we talked about when we first covered this stock, it's a high flyer, but it's increasing sales -- and gross margins, profit margins, as well -- at a rate that justifies a little bit of a steep valuation, which we'll get to in a moment.

One thing that caught my eye in the company's latest earnings report -- actually, we're due for a new quarter. Canada Goose tends to announce its earnings six or seven days before they actually put out the earnings. I don't have a firm date for listeners, but within the next two weeks, we'll have another quarter reporting. But in the most recent reported quarter, which covers the three months for their fiscal year ended Dec. 3rd, 2017, gross margin increased about 600 basis points, that's basically 6 percentage points, to 63.6%. I love this. This is the trend that we talked about last time we covered Canada Goose, in that this shift from its initial wholesale channel, which is where the company gradually built its space, to this direct-to-consumer type of sale, online, through its flagship stores. The company is really pushing its margins forward, and that's giving earnings a chance to breathe and increase so the stock can work its way into that valuation.

Shen: I was really surprised, looking back at my notes from that last show. I want to remind listeners that this company has managed to grow this direct-to-consumer business almost tenfold in just a few years' time. The latest figures that we have from the company at this point, they're a little dated, as we wait for the updated numbers, but the company pinned the DTC segment at almost 30% of total revenue previously, those numbers being from the end of 2017. I expect the next report brings that figure quite a bit higher. Again, I'm very interested in seeing, like you, how that's going to continue to change the profile of their margins.

Sharma: Sure. I wanted to point out that the company has a long-term path to keep pushing those margins forward. Recently, the CEO, Dani Reiss, said that the company wants to produce half of its goods in-house within the next few years. If you look at today, they're producing about one-third of goods in-house, and they use different suppliers for the rest of their product. But the company is expanding its base. It's added about 700 employees in the last year. The former base was 1,350. It's opened a new production facility -- I know I'm going to pronounce this wrong. The facility, which was opened in June of 2017, is in Boisbriand, Quebec. Listeners, please write in if I really mangled that. What the company is trying to do is keep these in-house value-added components of the manufacturing process, and then open more stores.

Last week, the company announced its China strategy. Now, it's opening two flagship stores in China. There's often talk on this show about that aspirational Chinese consumer who has more disposable income and loves luxury goods. The stores are going to be opened in Beijing and Hong Kong. The company is also opening an Asia office in Shanghai, so more manufacturing in-house and an expansion into markets where I think its high-end products will be well-received. These are all ways in which this company can justify that high price. And I looked at the chart this morning, Vince. It's been a steady ascent since the last time we covered this stock, hasn't it?

Shen: Yeah. It's definitely a standout for the consumer and retail space and for apparel in general. Really can't beat the share price performance that Canada Goose has managed to deliver. The latest news, what you mentioned in terms of the expansion plans that they've announced for China, I think they're going to go into more detail on those beyond what they shared in the press release when they report their next quarter of results. Basically, this is the company formalizing their approach to what they call "the world's largest luxury market". They've already seen healthy demand from Chinese consumers, and now they're appointing this president for the Greater China region, as you mentioned, opening the office, the two stores in Hong Kong, Beijing. They're also working with Alibaba and Tmall for their e-commerce push in that market.

The last time we talked about this company, that was an example of the expansion opportunities that we saw for Canada Goose, in that they could expand geographically, and then also in product categories, since the brand has historically focused on outerwear. It's really good to see them laying out the plans for such an important market like China that comes up all the time on this show as a region that's very exciting, showing a lot of growth and potential for companies across the various sub-sectors in consumer and retail.