Canada Goose Holdings Inc. Q4 FY2025 earnings call

• Brand Momentum: Fourth quarter marked a strong finish to fiscal 2025 with revenue growth. D2C business showed positive momentum, especially from a strong December, with 7% D2C comparable sales growth. Marketing campaigns like Sea Mantra and eyewear boosted brand search demand. Made in Canada products are mostly unaffected by U.S. tariffs.
• Product Expansion: Introduced the Sea Mantra collection, a technically advanced rain jacket, and apparel remained the fastest-growing category. Product mix evolved with down-filled outerwear growth. Wholesale strategy showed stronger sell-through in North America with cleaner inventory.
• Retail Execution: Fourth quarter DTC sales comp was up 7%, with higher conversion in every region. North America saw DTC comps up 17% in Q4, EMEA had mixed results with strong performance in Milan and Paris, APAC had a strong January but softness in February-March. Digital channel performance saw a spike in revenue and traffic in February due to eyewear launch with AI-powered virtual try-on tools.
• Fiscal 2026 Imperatives: Focus on building brand heat through focused marketing investments, expanding product offering for year-round relevance (including more newness, growing apparel line, and Haider Ackermann's creative vision across collections), driving strategic channel development through DTC excellence and elevated wholesale partnerships, and operating efficiently with pace and accountability.

In the fourth quarter of fiscal 2025, Canada Goose reported consolidated revenue of $385 million, up 7% year-over-year. Direct-to-consumer (D2C) revenue reached $314 million, a 12% year-over-year increase, with comparable D2C sales growth of 7%. The wholesale channel saw revenue decline year-over-year but with better in-season reorders, especially in APAC. Apparel was the fastest-growing category in both Q4 and the full fiscal year. Gross profit increased 18%, with gross margin expanding to 71.3% in the fourth quarter. Adjusted EBIT for Q4 was $60 million, up 49% year-over-year, and adjusted EBIT margin was 15.5%, a 430 basis point expansion from the prior year. For the full year, adjusted EBIT was $171 million, a modest decline from fiscal 2024, but the company navigated challenges in D2C comparable sales and wholesale order book rationalization.

Management stated they will not provide a financial outlook for fiscal 2026 due to uncertain global trade environment and consumer sentiment. However, key focuses include: strategically increasing marketing investment with upper funnel activities, expanding product offering with newness across categories and Haider Ackermann's creative input, driving business expansion through D2C store growth and wholesale partnerships, and operating efficiently with focus on inventory turnover and SG&A management.

• Tariffs and Trade: New U.S. tariffs have minimal impact on the P&L currently, but remaining production from Europe faces tariff increases with minimal financial impact. Indirect effects on global economy and consumer sentiment create uncertainty.
• Consumer Sentiment: Macro challenges in some regions (e.g., U.K., China) impacted traffic, though conversion improved in those areas.

Q: Brooke Roach from Goldman Sachs asked about comp growth in North America, sustainability of the trend, and protection from macro uncertainty, as well as contextualizing incremental SG&A marketing investments.

A: Carrie Baker responded that North America had strong momentum with product expansion, store execution focus, and brand storytelling driving continued opportunity. Neil Bowden mentioned that SG&A focus is on strategic investments in marketing, product design, and stores, but did not provide specific percentage of sales planned.

Q: Rick Patel from Raymond James inquired about product newness, store composition of core vs. newness, and timing of newer products.

A: Carrie Baker said they focus on newness through fabrics and innovations on core products, with apparel being a focus. New products are introduced progressively, with Haider Ackermann's capsules being new styles, and newness expected in fall/winter and spring.

Q: Alex Perry from Bank of America asked about pulling the guide due to volatile trends and wholesale guidepost.

A: Neil Bowden stated the guide was pulled due to uncertain consumer environment, but sales performance in early fiscal 2026 was positive. Carrie Baker mentioned wholesale strategy is focused on deepening partnerships, with fiscal 2026 expected to be a trough and growth to follow.

Q: Oliver Chen from TD Cowen asked about regions of concern and GMROI/margin markdowns.

A: Carrie Baker noted no major concerns, with fluctuations in traffic patterns responded to. Beth Clymer mentioned focus on driving inventory turns and margin performance, with less focus on absolute margin dollars and more on inventory efficiency, expecting better aggregate margins from lifestyle categories.