Canada Goose Holdings Inc. Q2 FY2026 earnings call

Management Statement and Operational Highlights

• Expanding Product Offering: Revenue from new styles as a percentage of total revenue more than doubled, driven by new products in downfilled and non-downfill categories. Apparel remained the fastest-growing category.
• Building Brand Heat: Launched fall/winter 2025 campaign with fresh perspective. Strengthened store network with new openings (Macau, Beijing, Paris) and elevated store design in Paris. Unveiled new brand expression through wholesale in-store activations like the Fall/Winter '25 Chilliwack immersive pop-up.
• Driving Business Expansion: DTC comparable sales growth consistent, with store conversion rates increasing year-over-year in every region for the third quarter. Strengthened store network with new openings and relocations.
• Operating Efficiently: SG&A expense increased due to investments in marketing and stores, but the company is well set up for the balance of the year. Inventory was down 3% from last year, net debt reduced, and the company closed its largest U.S. warehouse to simplify operations and reduce costs.

Segment Performance

• Direct-to-Consumer (DTC): Direct-to-consumer comparable sales grew 10% year-over-year. DTC revenue was up 21%, with direct-to-consumer comparable sales growth of 10%, led by North America and APAC. Revenue from new styles as a percentage of total revenue more than doubled, with new products in downfilled and non-downfill categories driving notable growth in the DTC channel, where revenue from newness now represents roughly 40% of DTC sales for the quarter compared to 10% last year.
• Wholesale: Represented about half of total revenue in Q2. Revenue was in line with expectations, slightly down year-over-year and flat through the first half. Wholesale revenue was down 5%, down 3% year-to-date as the company focuses on elevating brand positioning and maintaining healthy inventory.
• Other Channel: Revenue totaled $10 million compared to $27 million last year, reflecting an intentional pullback in friends and family events in the first half of the year, with limited activity expected in Q3.

Guidance

• Second half off to strong start with positive DTC comps in October. Entering peak season well positioned across store and e-commerce channels. Focus on translating progress into sustained profitable growth and stronger margins.

Risks

• Consumer sentiment in China mixed. U.K. consumer environment challenging. SG&A costs as a percentage of revenue still have runway for improvement. Trade risk profile unchanged with warehouse closure.

Question and Answer

• Q: Regarding direct-to-consumer comp sales, what initiatives to sustain momentum?

A: Focus on sharper channel execution, better product with seasonal relevance and inventory availability, and consistent marketing.

• Q: Thoughts on U.K. softness and SG&A fixed vs variable?

A: U.K. softness is a trend, teams focused on execution; SG&A has fixed and variable components, with investments driving long-term value.

• Q: Confidence in sustaining comps momentum across regions?

A: Encouraged by consistent performance, well-trained teams, ready inventory, and newness animating classics.

• Q: Factors driving margin changes in seasonal period?

A: Positive comps driving channel margin expansion, investments delivering in season, leveraging corporate fixed costs.

• Q: Trends in North America?

A: Drop in second quarter due to wholesale timing and intentional pullback in other channel, but DTC momentum strong in Canada and US continuing into Q3.