Canada Goose Holdings, Inc. Q2 FY2025 earnings call

Product and Brand Evolution - Opened new design studio in Paris and built a strong team to support Haider Ackermann's product vision. Haider's first capsule collection under Snow Goose drew positive response, drawing inspiration from archives to innovate in core and new product categories. - Plan to expand into eyewear with a spring 2025 launch in partnership with Marchon Eyewear. - Hired a new Head of Merchandising to lead and strengthen long-term product strategy. ### Retail Execution - Continued to simplify operations, including aggressively reviewing third-party vendors, renegotiating or canceling contracts to yield savings, and prudently managing headcount. - Rightsized inventory levels, with inventory at the end of Q2 decreasing 9% year-over-year, marking the fourth consecutive quarter of year-over-year inventory balance decrease. ### Marketing - Launched campaign with global brand ambassador Shai Gilgeous-Alexander, driving earned media, subscribers, social engagement, and commercial results. - Joined Douyin in September, a powerful way to tell brand story and engage customers, contributing meaningfully to Asia Pacific e-commerce revenue. - Focused on creating excitement for Haider capsule and bolder brand expression through various campaigns. ### Wholesale Strategy - Elevated wholesale shopping experience, with positive sell-through in EMEA, better positioning within strategic wholesale partners, and significant progress in reducing product availability with non-aligned distributors, improving full price positioning.

Revenue in Q2 was down 5% year-over-year or 6% on a constant currency basis. Wholesale business reported a 15% year-over-year decline. DTC comparable sales declined 13% year-over-year. Regionally, North America revenue decreased 3% on lower DTC and wholesale revenue, Asia Pacific revenue grew 3% mainly due to higher travel retail revenue in Greater China, and EMEA revenue was down 17% primarily due to a planned decrease in wholesale revenue. From a channel perspective, DTC revenue was down 5% or 6% on a constant currency basis with DTC comparable sales down 13% year-over-year. Gross profit decreased 9% year-over-year, and gross margin declined 260 basis points to 61.3% primarily due to a higher proportion of non-heavy weight down revenue in the product mix.

• Full year fiscal 2025 revenue is expected to range between a low single-digit increase to a low single-digit decline compared to fiscal 2024. - D2C comparable sales are expected to move in a similar range this year versus the prior year. - Wholesale revenue is expected to decrease 20% year-over-year, unchanged from initial outlook. - Gross margin outlook remains unchanged. - Non-IFRS adjusted EBIT margin is expected to range between an increase of 60 basis points to a decline of 60 basis points over the prior year, due to increased marketing investments and a change in regional revenue mix.

• Macro environment impacting consumer confidence, which has affected retail performance. - Weaker retail execution in some regions, particularly affecting DTC comparable sales. - Inventory management challenges, although efforts are being made to improve inventory health.

Q: Adrienne Yih asked about the business landscape by channel mix, region, and seasonal vs non-seasonal apparel in three to five years, and about marketing dollar shift and store closing consideration.

A: Dani Reiss gave high-level commentary on product evolution and brand strength, Beth Clymer added on thematic elements remaining true. Neil Bowden said no store closing consideration currently and marketing spend will be slightly up with more in the second half.

Q: Josh Reiss asked about improving comps for the remainder of the year and China component.

A: Carrie Baker talked about staying the path of efforts like staffing and training, Dani Reiss mentioned regions like China showing resilience.

Q: Oliver Chen asked about new Head of Merchandising's priorities and gross margin longer term.

A: Carrie Baker said focus on bestsellers, icons, and understanding consumer demand; Neil Bowden talked about product mix and vertical integration impacting gross margin.

Q: Brooke Roach asked about driving acceleration in comp trends in North America and wholesale inventory by channel/region.

A: Carrie Baker discussed North America's specific challenges and local focus; Beth Clymer talked about lower wholesale inventory and improved D2C inventory position.