The Case for Canada Goose Stock Amid Retail Selloff

The market has abandoned retailers that are vulnerable to weak consumer spending, and much of the sector has sold off hard. 

But Canada Goose Holdings Inc. (GOOS) - Get Report  , which is oversold, could be the diamond in the rough just based on what it offer consumers right now. Colder weather compared with last winter could drive the stock of the outerwear maker in the near-term. 

"With the help of more seasonable weather patterns compared to last year's warm start to winter, our reads are that higher margin outerwear and knitwear have been the stand-out categories," wrote Davidson and Co. analyst John Morris in a note Wednesday.

Morris has a "buy" rating on Canada Goose, and noted the company is expanding its product assortment appropriately for the season.

"Goose should be a winner from the strong outerwear season, especially with its broadened assortment of knitwear and wider offering of vests and coats," he said. 

Still, Canada Goose's products are at the high end of the retail market, and many on Wall Street have said that off-priced retailers could be the place to be if consumer spending turns sharply lower in 2019. But if there's anything to be said about retailers that offer premium value propositions, Canada Goose should be in that conversation. 

Recently, the company saw an encouraging sign for its Chinese market, as people flocked to its newly opened Beijing store. 

A risk to the stock is a weaker Canadian dollar. 

The stock has declined about 26% in the past three months, while the Invesco Consumer Discretionary ETF has fallen almost 13% in the same period.

Shares were trading up 1.2% on Wednesday to $44.23.