A U.S. Federal Trade Commission probe into allegations of false or misleading statements made by Canada Goose has left the company on the defensive, with some saying the allegations are hurting the luxury outerwear maker’s stock performance.

Shares in Canada Goose Holdings Inc. rebounded modestly Tuesday after shedding nearly 10 per cent of their value over the previous three trading sessions on concerns about U.S.-China trade tensions and reports that the Toronto-based company revised ethical claims about the sourcing of fur and down used in its parkas.

The stock decline coincided with a New York Post report about the findings of a year-long FTC inquiry into marketing claims about trapping and down practices.

The stock price fell 4.7 per cent Thursday, the day the Post reported the company had removed some references to ethical treatment of animals from its promotional materials, and continued to decline in trading Friday.

The now-concluded probe into allegations of false or misleading statements in promotional materials regarding the treatment of animals in its supply chain did not result in enforcement action because of what the FTC in a letter to the company’s legal counsel called the “prompt and corrective action taken by Canada Goose.”

The June 17 letter also said the FTC was “concerned that Canada Goose may have made false or misleading representations about the treatment of geese whose down is used in Canada Goose’s apparel.”

According to People for the Ethical Treatment of Animals, which filed the initial complaint, the action included removal from the Canada Goose website of assertions that it trapped coyotes only in areas where the animals have become abundant and a pest. A video showing where the company sources goose down for its parkas was also removed.

PETA said a Canada Goose statement indicating that the company would “ensure” ethical treatment of animals has also been replaced by wording vowing the company’s “commitment” to the practice.

The company strenuously denied that it made the changes in response to a regulatory review.

“We are appalled by the gross mischaracterization of our long-standing ethical sourcing standards which have only strengthened over time and become more robust,” Canada Goose said in an emailed statement.

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The statement went on to say that “the changes to our website were not made at the behest of the FTC,” and that “the FTC did not reach any conclusions regarding whether any prior statements were misleading.”

The company added that its “website reiterates our commitment to the ethical sourcing and responsible use of all animal materials,” and that “any inference to the contrary is false.”

RJY Strategies analyst Ryan Waldoch says he believes the stock will recover from the unethical sourcing claims, noting that Canada Goose has been in an ongoing battle with PETA over the issue. “If Canada Goose believes that there is inhumane (third party) sourcing, I have no doubt that they would drop that supplier,” he said.

There is seemingly no need to cut costs and lose a significant customer base because Canada Goose boasts enviable profit margins, Waldoch added.

“It is apparent these allegations have not sat lightly with Canada Goose investors.”

Waldoch added that some of the company’s competitors have ditched genuine fur, known for its warmth and durability, in favour of synthetics, and that some governments have also been taking action, with Los Angeles voting to outlaw fur in a move that could go into effect as soon as 2021.

“This conveys that there is a wide group of people who may have opted for a different winter jacket solely because of the material used on the hood,” he said. “For Canada Goose, this seems like a fairly easy fix and offering a synthetic alternative will boost their top line and increase their customer base.”

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D.A. Davidson analyst John Morris played down the FTC probe, writing that he believed the stock decline related solely to recent U.S. trade war developments that “could begin to dampen overall Chinese consumption.”

Bloomberg Intelligence analysts Deborah Aitken and Maxime Boucher in a report added that the company “could be better at communicating its strategy” to prevent “avoidable surprises” that inject volatility into the stock.

Shares in Canada Goose were up 51 cents (U.S.) to $42.75 in New York midday Tuesday.