No matter how one tries to spin the numbers -- and Canada Goose (NYSE:GOOS) did try to spin them -- its revenues for the first quarter were weaker than expected, and its forecast for "materially larger losses" in its current quarter sounded disturbing. But the maker of expensive outerwear is in a cyclical business, and it's investing heavily for growth.

In this segment of the MarketFoolery podcast, host Chris Hill and senior analyst Seth Jayson zoom out and consider the bigger picture for the company, conditions in the retail and apparel segment, and the investment thesis for the stock now.

To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. A full transcript follows the video.

This video was recorded on May 29, 2019.

Chris Hill: Let's start with Canada Goose, which is the maker of outerwear.

Seth Jayson: Expensive jackets. I own this one. The stock just got cheaper.

Hill: The stock just got cheaper.

Jayson: Thanks a lot, Canada!

Hill: [laughs] Let me just say to anyone listening, please ignore any headlines you see about Canada Goose fourth-quarter adjusted profits being higher than expected, because none of that matters. Revenue was weak, and the company said it expects, and now I'm quoting, "materially larger losses in the current quarter."

Jayson: That's actually not really very shocking. I wouldn't call revenue weak. It was still pretty good growth. The problem here is they're always surpassing estimates, and they missed the estimates by a whopping $800,000. The stock is down 25%, or close to it right now. That's a bit of an overreaction, but it's understandable. Revenue was up 25%. And that's in Canadian dollars. I can't remember how Canadian dollars compare to real dollars these days. But we'll do things in Canadian dollars since that's what I have in front of me. This was the slowest revenue growth in several quarters, but this is not really that crazy. They sell expensive jackets. You can't grow 40% every quarter forever. You get a bigger base, and that growth becomes harder to achieve.

Now, the material larger losses in adjusted operating earnings and net income are also really not a surprise. They have been building out a small, but larger, retail footprint. So, you talk about quarters where you're not selling as much product. Mostly, they still sell high-end jackets. So when you're selling less product, but you have a bigger footprint, and you're putting the pedal to the metal on systems to be able to support that footprint, you end up with more losses in the quarters where you're not gaining the revenue.

None of this is to say that this is awesome news. I'm not excited about it as a shareholder. But I'm not really all that worried. This is a company that was trading at a premium, so this is not unexpected. But I don't think this is a signal for the end.

Hill: Let me get to the math for a second. Seth, while you were chatting, I just used the Google machine. One Canadian dollar equals basically $0.75 in the U.S. $800,000 loss, that's just a shade under $600,000. So, you really look at this stock down 25%, and you think to yourself, "Eh."

Jayson: It seems like a little overreaction. I would have expected something more in like 10% or 15%. But what do I know? People are worried about a lot of stuff today. We've got the trade war continuing to go on, and many other retailers are stinking it up. We're going to talk about Abercrombie, aren't we?

Hill: Yeah.

Jayson: Is this a transition? Is this what's known in the biz as a transition? They're also down around 25% percent.

Hill: [laughs] We can, but let me just say one last thing with Canada Goose. This stock, with the drop today, is basically where it was a year ago. It has visited lots of interesting places in between. It's midthirties today.

Jayson: I was near a double not long ago. I didn't sell it because this is a stock that came to me when I was in New York City. Everybody was wearing these jackets, or a knockoff version. But, even the dudes carrying noodles out of the dumpling shop that I like. These aren't folks who make a ton of money. They're delivery dudes on bikes. They were buying the actual Canada Goose jacket because they didn't want to freeze. It was really cold at that point in time. I came back, I started reading reviews of the jackets, even the dirtbag gear magazines where they frown on boutique expensive stuff. Their attitude was, "We kind of hate to admit it because these are really expensive, but they really are a step above, so if you've got the money, this is what you should go for." And then I started looking at the financials, and I thought it was worth an investment to me, they're doing a good job. But it's always been a high-priced stock. If you can't hurdle that earnings estimate for the first time in a while, everyone freaks out.