Wells Fargo downgraded Canada Goose's stock rating by two notches. The weather is to blame.

Wells Fargo has downgraded its rating on the small-cap shares of down jacket manufacturer Canada Goose by two notches and now recommends selling them. Analysts believe that expectations of a mild winter will negatively impact the company’s sales. Following the downgrade, Canada Goose’s stock fell more than 5%—to its lowest level since late April 2025.

Wells Fargo downgraded its rating on Canada Goose shares from “buy” (overweight) to “sell” (underweight), CNBC reported.

Analysts also lowered their price target for the stock by nearly 40%, to $10, which implies upside potential of nearly 21% relative to the stock’s closing price on August 24. On that day, Canada Goose shares fell more than 5%, closing at $8.30 per share. This is the lowest level since late April 2025. In premarket trading on August 25, the stock is up more than 3%.

Investors have not paid much attention to El Niño, according to Wells Fargo. This natural phenomenon occurs every two to seven years and causes the water in the equatorial Pacific Ocean to warm, which can lead to increased precipitation in some areas and drought in others. In 2026, meteorologists are expecting a Super El Niño, which could be the strongest on record, according to Reuters.

A warm winter will have a negative impact on Canada Goose’s sales, according to analysts at the investment bank. At the end of the third quarter of the previous fiscal year (which ended on December 28, 2025), the company’s comparable sales rose by only 6% year-over-year. The investment bank forecasts that, due to weather conditions in the current third fiscal quarter, this metric for the winter apparel manufacturer will decline by 5% year-over-year. Previously, they had expected a 1% increase. Thus, Canada Goose’s total sales will rise by 1.9%—the consensus forecast calls for 4.4% growth, notes Wells Fargo. In the third quarter of the previous fiscal year, sales rose 14.2% to 694.5 million Canadian dollars ($501.26 at the current exchange rate).

Since the beginning of the year, Canada Goose's stock price has fallen by nearly 37%.

Wall Street, on the whole, isn't very optimistic about the company's prospects: its stock has five "sell" ratings from analysts, the same number of "hold" ratings, and only three "buy" ratings. The average price target is $9.7, which is nearly 17% higher than the most recent closing price.