Canada Goose Q4 2025 Earnings Call Transcript

Quartr
Provided by Quartr
May 21, 2025
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Operator

Good morning, and welcome to the Canada Goose Fourth Quarter Fiscal twenty twenty five Earnings Call. All participants are in a listen only mode. After the speakers' remarks, we will conduct a question and answer session. As a reminder, this conference call is being recorded. I would now like to turn the call over to Neil Bowden, Chief Financial Officer.

Operator

Thank you. Please go ahead.

Neil Bowden
Neil Bowden
Chief Financial Officer at Canada Goose

Good morning, everyone. With me today are Danny Reiss, our Chairman and CEO Carey Baker, President of Brand and Commercial and Beth Kleimer, President and Chief Operating Officer. Today's presentation will contain forward looking statements that are based on assumptions and therefore subject to risks and uncertainties that could cause actual results to differ materially from those projected. We undertake no obligation to update these statements except as required by law. You can read about these assumptions, risks and uncertainties in our press release issued this morning as well as in our filings with The U.

Neil Bowden
Neil Bowden
Chief Financial Officer at Canada Goose

S. And Canadian regulators. These documents are also available on the Investor Relations section of our website. We report in Canadian dollars, so all amounts discussed today are in Canadian dollars unless otherwise indicated. Please note that financial results described on today's call will compare fourth quarter results ended 03/30/2025, with the same period ended 03/31/2024, unless otherwise noted.

Neil Bowden
Neil Bowden
Chief Financial Officer at Canada Goose

For today's call, Danny, Carrie, Beth and I will deliver prepared remarks, following which we will open the call up to take questions. With that, I'll turn the call over to Danny.

Dani Reiss
Dani Reiss
Chairman & CEO at Canada Goose

Thanks, Neil, and good morning, everyone. I'll start with our fourth quarter performance and progress on our operating imperatives before I turn it over to the team to review our results in greater detail. The fourth quarter marked a strong finish to fiscal twenty twenty five with revenue up 7% year over year. Our direct to consumer business showed positive momentum from a very strong December, delivering 7% DTC comparable sales growth for the quarter, a substantial improvement from our year to date performance. We are very pleased with our strong finish to the year and the progress that we've made building on the strength of our brand, enhancing our DTC execution and operating more efficiently.

Dani Reiss
Dani Reiss
Chairman & CEO at Canada Goose

Our focus has delivered results, strengthening our foundation for future growth. The Canada Goose that customers experienced this quarter was more culturally relevant, more deliberate in our execution and much more impactful in everything we did. We didn't just meet the moment, we created moments that elevated our brand in the global conversation. For example, our marketing campaigns for C Mantra and Eyewear in February significantly boosted global brand search demand with a 19% year over year increase. This positive momentum continued into March, particularly in The United States.

Dani Reiss
Dani Reiss
Chairman & CEO at Canada Goose

We took significant steps to become a better retailer in order to drive higher sales productivity in our stores. Our focus on enhancing store staffing, inventory position and the in store experience contributed to higher conversion rates in comparable stores for the year. We evolved our marketing and brand strategy delivering impactful brand moments during our Snow Goose campaign, which now serves as the blueprint for future campaigns. And we successfully managed our inventory, which is now down year over year for six consecutive quarters, resulting in cleaner inventory across all channels and paving the way for a much more product newness in the coming years. In today's uncertain trade environment, it is worth noting that our Made in Canada products, which represent the vast majority of our offering, are not currently impacted by the recently announced tariffs on imports into The United States.

Dani Reiss
Dani Reiss
Chairman & CEO at Canada Goose

While these are uncertain times, I want to emphasize that this is not the first time Canada use has successfully navigated uncertainty. We've endured challenging times before, through 02/2008, through COVID, and each time we've emerged stronger. Looking ahead, we're building on this momentum with a clear path forward. What works will continue to amplify. What needs refinement will evolve.

Dani Reiss
Dani Reiss
Chairman & CEO at Canada Goose

In fiscal year twenty twenty six, we're going to focus on four key operating imperatives, each of which build on the success we saw from our efforts in fiscal twenty twenty five. First, building brand heat through focused marketing investments. The results that we've achieved through our approach to marketing in fiscal twenty twenty five have informed our approach for the year ahead. When we invest boldly in strategic brand moments, we see a direct commercial impact. Our second key area is expanding our product offering to enhance eRab relevance.

Dani Reiss
Dani Reiss
Chairman & CEO at Canada Goose

With our strengthened product leadership team and with Heider Ackerman's creative involvement and vision, we will continue to develop and launch newness and strengthen our seasonal collections that will continue to resonate with customers throughout the year. Third, we will be driving business expansion through strategic channel development. We will continue to selectively expand our store footprint while renovating existing locations to deliver an exceptional brand experience and to better position our brand across strategic wholesale partners. And finally, we are operating efficiently and with pace and accountability. Building for the future requires strategic investments in our people, systems and processes, particularly in areas directly connected to revenue generation and customer experience.

Dani Reiss
Dani Reiss
Chairman & CEO at Canada Goose

We will be making those critical investments while at the same time continuing our efforts to drive efficiency throughout our business. We are entering fiscal twenty twenty six with strong momentum, momentum built on lasting foundations. With a sharp focus on our operating imperatives, we're strengthening our brand, building for generations, not just a single season. I want to thank our talented employees around the world for their dedication and commitment to excellence. And with that, I'll turn it over to Carrie to discuss our commercial performance in more detail.

Carrie Baker
Carrie Baker
President of Brand & Commercial at Canada Goose

Thanks, Dani. Building on the inflection point in December, our momentum continued through the fourth quarter. Let me walk you through our progress in two of our three key operating imperatives in fiscal twenty twenty five and how they position us for the future. Starting with fueling the next phase of our brand strategy. In Q4, on the heels of our successful Snow Goose campaign, we introduced the Sea Mantra collection, our most technically advanced rain jackets yet.

Carrie Baker
Carrie Baker
President of Brand & Commercial at Canada Goose

Designed for extreme wet weather, they offer the same high performance standards that define our snow mantor jackets in extreme cold. This bold addition to our performance category shows how we continue to push the limits in craftsmanship and innovation. And the launch also drove significant interest within our rainwear category. Our product mix continued to evolve, with downfield outerwear seeing growth and apparel remaining our fastest growing category in both Q4 and across the full fiscal year. Our wholesale strategy is another key part of our brand evolution, and we are seeing clear results.

Carrie Baker
Carrie Baker
President of Brand & Commercial at Canada Goose

Strengthening our strategic partnerships and our focused approach to curated allocations are paying off with stronger year over year sell through, especially in North America. This led to higher in season reorder demand and a cleaner inventory position in the channel. Now turning to our second operating imperative, driving best in class retail execution. As Danny mentioned, fourth quarter DTC sales comp was up 7%, and we saw higher year over year conversion in every region. This growth validates both the investments we've made and our relentless focus on getting the fundamentals right to enhance the consumer experience across our retail network.

Carrie Baker
Carrie Baker
President of Brand & Commercial at Canada Goose

Let me provide some color on our regional DTC performance. In North America, we saw exceptional momentum with DTC comps up 17% for the quarter. Store performance was particularly strong with double digit growth each month, reflecting the success of our retail execution strategies and marketing initiatives in the region. In EMEA, results were mixed throughout the quarter. The U.

Carrie Baker
Carrie Baker
President of Brand & Commercial at Canada Goose

K. Continued to face more challenging market conditions compared with the rest of the region where our stores in Milan and Paris in particular delivered strong performance. In APAC, we experienced a strong January driven by Lunar New Year, but softness in February and March. While traffic in the region continued to be impacted by macro challenges, we increased sales conversion. Our expanded live streaming presence in Mainland China is another continued opportunity, driving significant brand visibility and enhanced consumer engagement.

Carrie Baker
Carrie Baker
President of Brand & Commercial at Canada Goose

Looking at global digital channel performance, we saw a spike in revenue and traffic in February, thanks to the online launch of our Eyewear collection, where we introduced AI powered virtual try on tools, which consumers loved. These tools didn't just improve the online experience, they boosted sales across other categories. And by staying consistent and intentional with how we connect with our consumers, we've seen our subscriber base grow year over year, with email now driving a much bigger share of our e commerce sales. Now let me share our fiscal twenty twenty six operating imperatives, which Dani introduced earlier. First, building brand heat through focused marketing investments in upper funnel marketing to drive brand heat and cultural relevance.

Carrie Baker
Carrie Baker
President of Brand & Commercial at Canada Goose

What we saw in fiscal twenty twenty five is clear. When we make bold moves that spark attention, search and sales follow. This work is all part of our journey to elevate the brand and connect with the right audience. By shifting our marketing efforts and investments earlier in the year and higher up the funnel, our aim is to create standout moments that build momentum and demand ahead of peak periods and keep Canada Goose top of mind all year long. To do that, we're increasing marketing spend as a percentage of revenue.

Carrie Baker
Carrie Baker
President of Brand & Commercial at Canada Goose

We're increasing our investment in upper funnel marketing efforts, and we're enhancing marketing impact through high profile campaigns, exclusive products and impactful storytelling. We're also evolving how we measure impact, recognizing that it's the full journey from brand building to conversion that drives results. This approach is already showing its value, helping us understand what's working and why. We're learning more about how each channel contributes, whether it's building long term affinity or generating immediate sales and using those insights to make smarter, more effective decisions. Our second operating imperative for fiscal twenty twenty six is expanding our product offering to enhance year round relevance, which we'll deliver through three key initiatives.

Carrie Baker
Carrie Baker
President of Brand & Commercial at Canada Goose

First, bringing more newness than ever, nearly doubling the mix of updated and brand new styles, giving consumers more reasons to shop with us again. The excitement here is already building. We've received strong enthusiasm from our wholesale partners for both our springsummer and fallwinter 'twenty five collections. Second, growing our apparel line to strengthen our year round relevance and reach a broader range of lifestyles and environments, while still remaining a leader in down filled outerwear through elevated fabrics, standout style and innovative design. Our data shows that consumers who discover us through apparel are more likely to become repeat customers versus those who start their journey with other categories.

Carrie Baker
Carrie Baker
President of Brand & Commercial at Canada Goose

So we're confident this investment will have meaningful commercial benefits. And third, starting in springsummer twenty twenty six, Heider Ackerman's creative vision will extend across both Snowgoose and our mainline collections. To bring this to life, we're making meaningful investments to accelerate progress, starting with our product creation teams. By better connecting design, development, sourcing and merchandising through a more integrated and collaborative process, we're already seeing faster speed to market. Our third operating imperative is driving strategic channel development through DTC excellence and elevated wholesale partnerships.

Carrie Baker
Carrie Baker
President of Brand & Commercial at Canada Goose

For DTC, we're focused on the following: growing our store presence with new openings and refreshing existing locations to create an even better experience for our consumers as well as taking our retail store execution strategy to the next level. That means we're doubling down on what we kicked off last year with a focus on smarter staffing tied to store traffic, hiring earlier for peak seasons, creating more consistent in store experiences and using our omnichannel tools to keep inventory flowing where and when it's needed most. Now to our digital initiatives. We will continue to enhance the site experience and personalization journey, making it easier for customers to discover, shop and engage with our brand. We intend to bring our products to life through richer storytelling, offering a more seamless, unified experience across our full assortment and improving how we connect our Mainline and Snow Goose collections.

Carrie Baker
Carrie Baker
President of Brand & Commercial at Canada Goose

By leveraging attribute based merchandising and behavior driven insights, we aim to personalize the consumer journey, delivering relevant products and experiences at every step in their digital journey. In wholesale, we're focused on showing up more consistently for our consumers wherever they shop with us. We're investing in shop in shops and enhancing our showrooms to reflect the look and feel of our evolving brand, bringing our seasonal stories to life in a more immersive way. With sharper marketing and upgraded sales training for both in person and virtual appointments, shopping in a multi brand environment will feel more like Canada Goose than ever before. To summarize our commercial efforts, in a market full of noise and challenge throughout fiscal twenty twenty five, we stayed focused to own where we missed and deliver it where it counted most.

Carrie Baker
Carrie Baker
President of Brand & Commercial at Canada Goose

We turned disciplined commercial execution into meaningful progress, and we're moving into fiscal year twenty twenty six with strength. I'll now turn it over to Beth.

Beth Clymer
Beth Clymer
President & COO at Canada Goose

Thanks, Carrie, and hello, everyone. As a reminder, our third operating imperative for fiscal 'twenty five was to simplify and focus the way we operate. We are doing this through internal operating excellence and focused capital deployment. First, internal operating excellence. I have consistently shared our focus on controlling with corporate headcount approximately 3% lower than we had at the start of the year, and that was after our March 2024 headcount reduction.

Beth Clymer
Beth Clymer
President & COO at Canada Goose

We achieved this all while doing significant hiring in important areas like standing up our Paris design studio. Our focus on controlling corporate headcount is working. Not only are we a leaner team, but our employee Net Promoter Scores are substantially higher than they were prior to our March 2024 org changes. Change is hard, especially when that change requires things like headcount reductions. But this data tells us that our team is more engaged and more productive, which directly contributes to our improved business performance and operational efficiency.

Beth Clymer
Beth Clymer
President & COO at Canada Goose

Second, focused capital deployment. We've made real progress in rightsizing inventory across all sales channels. We ended the year with $384,000,000 of inventory, down 14% year over year, and we've met our objective of inventory turns reaching one point zero times, up from 0.9 times at the same time last year. We achieved this through a combination of disciplined production levels, planning and allocation improvements to make and ship the right inventory to the right place at the right time and leveraging brand right channels to exit slow moving inventory. Now I'll talk about the efficiency metric we are most focused on, SG and A as a percent of revenue.

Beth Clymer
Beth Clymer
President & COO at Canada Goose

In the fourth quarter, SG and A as a percent of revenue increased two twenty bps year over year after accounting for adjustments related to the transformation program last year. On a full year basis, this metric increased 130 bps year over year. There are three reasons for this. First, we did generate productivity by reducing SG and A on our corporate overheads, predominantly in headcount. Second, we made important revenue driving investments, specifically in stores, those that opened in fiscal 'twenty four and in fiscal 'twenty five, in marketing and in our design and product development teams.

Beth Clymer
Beth Clymer
President & COO at Canada Goose

These investments are intentional and reflect a deliberate strategy to drive sustainable growth, and we saw the benefit of this with four consecutive months of positive D2C comp growth. Lastly, we unfortunately did not generate positive comps for the entirety of the year, and that meant we did not leverage those costs as much as we had hoped. We are, of course, disappointed that we did not drive lower SG and A costs as a percent of revenue in fiscal twenty twenty five. That said, it is important to recognize that not all SG and A dollars are weighted equally. The investments we are making right now are intentional and focused, targeted specifically at brand relevance, product freshness and revenue generation to support long term growth.

Beth Clymer
Beth Clymer
President & COO at Canada Goose

We truly believe this is the smartest use of our resources. And while we're investing in the right areas, we remain very disciplined and cautious about how and where we spend. Over the course of fiscal twenty twenty six, you will hear me continue to talk about our fourth imperative, operating efficiently with pace and accountability. This means maintaining efficiency on our controllable costs, including corporate, operations and supply chain costs as well as third party costs making investments in critical drivers of sustainable growth, design, product and marketing and third, efficiently deploying capital expenditures and managing inventory. We will continue to measure and share with you our progress on this initiative, looking at SG and A as a percent of revenue, corporate headcount and inventory turns.

Beth Clymer
Beth Clymer
President & COO at Canada Goose

Before I hand it over to Neil, I want to address the global trade environment. Tariffs are a standard part of our global business. We've successfully managed them across markets throughout our history, and our team is well versed in adapting to policy changes. As they stand right now, the new United States tariffs have a minimal impact on our P and L. Approximately 75% of our units are made in Canada, virtually all complying with USMCA requirements, which means, as Danny mentioned earlier, they are currently exempt from tariffs.

Beth Clymer
Beth Clymer
President & COO at Canada Goose

Our remaining production, which is primarily from Europe, is facing an increase in tariffs, but they will have minimal financial impact. We're actively monitoring this evolving situation and remain well positioned to react swiftly to any changes in U. S. Or global tariff policies. More importantly, beyond tariffs, our vertical manufacturing is a real source of competitive advantage for us.

Beth Clymer
Beth Clymer
President & COO at Canada Goose

It gives us control over quality and craftsmanship, and it gives us agility in adjusting production to meet demand. We are currently leveraging this capability more than we ever have before, which is especially valuable in today's dynamic market. Of course, there will undoubtedly be second order implications on consumer sentiment, supply chain costs, etcetera, which we are monitoring closely and then Neil will discuss shortly. But overall, we feel well positioned to navigate these uncertain waters. I'll now turn it over to Neil.

Neil Bowden
Neil Bowden
Chief Financial Officer at Canada Goose

Thanks, Beth. First, I'll review our fourth quarter financial results and then discuss our plans for fiscal twenty twenty six. As a headline, Q4 was a notably stronger quarter for us against the deteriorating consumer backdrop and challenging global trade environment. In spite of these factors, we delivered consolidated revenue for the fourth quarter of $385,000,000 up 7% or 4% on a constant currency basis from the fourth quarter in fiscal twenty twenty four. D2C revenue increased to $314,000,000 up 12% year over year, including comparable D2C sales growth of 7%.

Neil Bowden
Neil Bowden
Chief Financial Officer at Canada Goose

Operating performance in our stores and e commerce channels around the world was strong, with North America leading the pack, building on momentum that started in the back half of Q3 that has continued into fiscal twenty twenty six. In the wholesale channel, in Q4, revenue declined more year over year as we compared against the later shipping window in EMEA in fiscal twenty twenty four. For the full year, we performed ahead of our expectations of a 20% decline, reporting an 18% decline for the year. This was primarily the result of better in season reorders, particularly in APAC, where our Travel Retail business is strengthening. We ended the year with channel inventory in a much healthier position and with better commercial alignment with our partners.

Neil Bowden
Neil Bowden
Chief Financial Officer at Canada Goose

Revenue in our other channel was down year over year as we held fewer friends and family events in the period. As you've heard, we're satisfied with our inventory position at the end of fiscal twenty twenty five, which has been improved through brand right strategies in this channel. Earlier, Carey provided the regional performance highlights, and I'll reiterate a few key points now. First, D2C comp performance improved materially in every region from our results in Q3 and over the first nine months of fiscal twenty twenty five. In Q4, North America D2C comparable sales growth was 174% for the full year.

Neil Bowden
Neil Bowden
Chief Financial Officer at Canada Goose

In EMEA, D2C comparable sales growth was 4%, but negative 7% for the full year. And in APAC, D2C comparable sales growth was flat and negative 10% for the full year. APAC was comping against the particularly strong Q4 of fiscal twenty twenty four as a reminder. If we double click into the markets, we saw strong performance everywhere throughout the quarter with two exceptions, Greater China and The UK. Both saw slower traffic as a result of a more difficult consumer sentiment and in both cases, conversion improved.

Neil Bowden
Neil Bowden
Chief Financial Officer at Canada Goose

As we move down the P and L, let's turn to gross profit, which increased 18%, exceeding the pace of revenue growth. Gross margin expanded by six twenty basis points in the quarter to 71.369.9% for the full year, up 110 basis points over the previous fiscal year and ahead of our expectations. The results for Q4 and the full year share similar reasons. First, the benefit of a higher proportion of D2C revenue second, lower inventory provisioning in the current year against somewhat higher provisions in Q4 fiscal twenty twenty four related to our e commerce business and third, the modest benefit of pricing. Growth in our apparel category delivered incremental gross profit dollars at a slightly lower gross margin, which somewhat offset items positively impacting gross margin during the quarter.

Neil Bowden
Neil Bowden
Chief Financial Officer at Canada Goose

Adjusted EBIT for Q4 was $60,000,000 up 49% year over year. Adjusted EBIT margin was 15.5%, a four thirty basis point expansion year over year compared to 11.2% last year. Gross profit improvement in the quarter and a disciplined approach to corporate expenses delivered meaningful year over year adjusted EBIT improvement in the period despite the increased costs of operating a larger store network, investments in our product creation capabilities and larger marketing investments. With positive DTC comparable sales and disciplined uncontrollable SG and A, we delivered operating margin improvement reflecting the power of our business model when the right elements come together. For the full year, adjusted EBIT was $171,000,000 compared to $172,000,000 in fiscal twenty twenty four, representing a modest decline in operating margin.

Neil Bowden
Neil Bowden
Chief Financial Officer at Canada Goose

While this was below our original plan, we are pleased to see that we have been able to navigate the pressure on D2C comparable sales performance, the intentional rationalization of our wholesale order book and planned investments in our design and merchandising teams and marketing expenditures. As Beth mentioned earlier, we are disappointed to have deleveraging our SG and A line in fiscal twenty twenty five. Our plan for the year contemplated SG and A leverage as a path to operating margin expansion, which was based on higher levels of revenue growth at the beginning of our peak season than we delivered. Adjusted net income attributable to shareholders was $32,000,000 or $0.33 per diluted share compared to $19,300,000 or $0.19 per diluted share in Q4 fiscal twenty twenty four. For the full year, adjusted net income attributable to shareholders per diluted share was $1.12 an improvement of $0.13 or growth of 13% compared to fiscal twenty twenty four.

Neil Bowden
Neil Bowden
Chief Financial Officer at Canada Goose

Turning to our balance sheet. As Beth mentioned earlier, inventory decreased 14% year over year, a material improvement directly resulting from a disciplined inventory management throughout fiscal 'twenty five. We're well positioned for fiscal 'twenty six with inventory strategically positioned in key markets, providing flexibility amid global trade challenges. The resulting cash flow generation from working capital improvement and operating performance added $189,000,000 more cash at the end of the fiscal year, leading to net debt improvement of a similar amount. Net debt leverage on a trailing twelve month basis improved to 1.3 times adjusted EBITDA from two point zero times adjusted EBITDA a year ago.

Neil Bowden
Neil Bowden
Chief Financial Officer at Canada Goose

We start fiscal twenty twenty six in a strong liquidity position that provides flexibility to make strategic investments while maintaining an efficient capital structure. Our capital allocation priorities remain focused on driving shareholder value in the medium and long term. First, by investing in organic growth opportunities central to long term value creation, such as brand and product development and expanding our retail network. Secondly, enhancing the business' foundational needs, including upgrading our technology. And third, maintaining an efficient capital structure.

Neil Bowden
Neil Bowden
Chief Financial Officer at Canada Goose

Now turning to fiscal twenty twenty six. There is no doubt that it has been a very turbulent period over these past several months, giving rise to material changes in the global trading environment. With changes occurring frequently and with limited line of sight to the impact of these changes on the economy and consumer health, at this time, we do not believe it is prudent to provide a financial outlook for the year. Specifically on trade duties and tariffs, and we have heard the questions of how we are impacted a number of times, I want to be clear about two things. First, as a global business, tariffs are a reality of life and have been for a while.

Neil Bowden
Neil Bowden
Chief Financial Officer at Canada Goose

We have navigated through them successfully. And as you heard Beth say, the newly implemented tariffs are not material to the fiscal twenty twenty six financial plans directly. However, and secondly, the indirect effect of these actions on the global economy and changing landscape create greater uncertainty for us, especially as we are months away from our peak revenue periods and the situation has changed frequently over the past several months. As you will expect, we are closely monitoring these dynamics and maintaining operational flexibility to respond as needed with a healthy balance sheet and liquidity position. Where we do have clarity, however, is in what will create the greatest medium and long term value for our business and controlling those things that we can control.

Neil Bowden
Neil Bowden
Chief Financial Officer at Canada Goose

Before I turn it over to the operator, I'd like to recap what you've heard from us today in terms of our operating imperatives for fiscal twenty twenty six.

Neil Bowden
Neil Bowden
Chief Financial Officer at Canada Goose

First,

Neil Bowden
Neil Bowden
Chief Financial Officer at Canada Goose

building brand heat through focused marketing investment. As Carey mentioned, when we invest boldly in brand moments, we see a direct commercial impact. This year, we will strategically increase marketing investment and emphasize upper funnel activities to drive brand resonance, balancing near term performance with long term value creation. Our plan for fiscal twenty twenty six is to ensure that the marketing activities will cover the full year, which we know from our experience in fiscal twenty twenty five is the plan we need to drive those commercial outcomes that we've just seen over the past six months. Based on that, we are confident this year's investment will bring a significant return, but given the shift up the marketing funnel, are not planning for the full benefit to be realized within the year.

Neil Bowden
Neil Bowden
Chief Financial Officer at Canada Goose

Second, expanding our product offering to enhance year round relevance. Product and category newness is resonating with down filled outerwear seeing growth and apparel remaining our fastest growing category in both the quarter and fiscal twenty twenty five. Our expanded design teams in Paris and Toronto are accelerating new product development across multiple categories, responding to consumer demand while shortening our go to market cycle. Pricing changes will be made imminently. We are planning for modest increases on carryover styles with some more strategic pricing on newness as we build category depth and assortment width.

Neil Bowden
Neil Bowden
Chief Financial Officer at Canada Goose

Third, driving business expansion through strategic channel development. Our second half of fiscal twenty twenty five delivered solid improvements in D2C comparable sales and conversion rates, with this positive trajectory continuing into the first quarter of fiscal twenty twenty six. We have more work to do here, and we're committed to building on this foundation with specific performance metrics to track and drive our progress throughout fiscal twenty twenty six. And on that, we will keep you posted. Capital deployment this year is focused on investing in critical markets like Paris and Milan, where we expect high returns over time.

Neil Bowden
Neil Bowden
Chief Financial Officer at Canada Goose

And our total net store opening plans will exceed fiscal 'twenty five levels. Finally, operating efficiently with pace and accountability. We're enhancing operational efficiency through improved inventory turnover and disciplined SG and A management, particularly in corporate overhead as we scale revenue. To close out today's remarks, I want to emphasize that our fiscal twenty twenty five performance, particularly in the second half of the year, demonstrated the strength of our brand and the effectiveness of our strategy when well executed. Despite market uncertainties, our strategy positions us for sustainable growth and enhanced shareholder value creation while deepening our connection with consumers around the globe.

Neil Bowden
Neil Bowden
Chief Financial Officer at Canada Goose

On behalf of the senior leadership team, I want to thank our teams around the world for their dedication and hard work throughout fiscal 'twenty five, and we are excited about what fiscal twenty twenty six will bring for Canada Goose. With that, I'll turn the call over to our operator for questions. Operator, you can open the line.

Operator

Thank you. Thank you. Our first question comes from Brooke Roche from Goldman Sachs. Please go ahead. Your line is open.

Brooke Roach
Brooke Roach
Vice President - Equity Research at Goldman Sachs

Good morning and thank you for taking our question. I was hoping you could elaborate on some of the opportunities that you see in comp growth this year particularly in North America. In your view, how sustainable is that North America comp trend that you delivered in the fourth quarter? And what are the things that you're doing to protect yourself from an uncertain macro environment into the peak winter season? And then a quick follow-up for Neil.

Brooke Roach
Brooke Roach
Vice President - Equity Research at Goldman Sachs

Can you contextualize the magnitude of the incremental SG and A marketing investments that you'll be making this year? What is percent of sales, this year that is planned versus last year? And how are you thinking about that opportunity? Thank you.

Carrie Baker
Carrie Baker
President of Brand & Commercial at Canada Goose

Hey, Brooke. It's Carrie here. So ShopFloat North America, yes, we had a great quarter. We saw tremendous momentum, and that continues. And so we continue to see that opportunity ahead.

Carrie Baker
Carrie Baker
President of Brand & Commercial at Canada Goose

And I mean, I talked about it in my remarks, but a few things. One, when you look at our product expansion, I think the way that consumers are responding to, whether it's eyewear, whether it's responding to our newness in apparel, our newness in our core, There we continue to see opportunities ahead to

Carrie Baker
Carrie Baker
President of Brand & Commercial at Canada Goose

drive even more of that. The second part

Carrie Baker
Carrie Baker
President of Brand & Commercial at Canada Goose

I would say is, you know, that everything that we started last year and kicked off in terms of our our store execution, so really focusing on the right people in place when that when we see traffic, making sure our inventory is in the right place, making sure our staff is really well trained. I think we have the opportunity to keep doing that, embed it at scale, and see that across every store, not just in North America, but I would say in every region. The third thing I would say is the response to the way we've been bringing those product stories to life, whether it's our eyewear launch, whether it was our c mantra collection that introduced our spring product assortment. The way consumers have been responding to that really bold, different, more focused on brand storytelling, more focused on upper funnel investments, that continues to give us confidence that there is more there. And so that is a blueprint that we will continue to execute in FY 2026 because it's delivering results.

Carrie Baker
Carrie Baker
President of Brand & Commercial at Canada Goose

Very excited to keep doing that. We have lots of new exciting things coming up on the product front. Hyder's Snow Goose capsule is second, will be coming out imminently. And so we're excited to see those lift from that.

Neil Bowden
Neil Bowden
Chief Financial Officer at Canada Goose

Thanks, Brooke. Nice to hear your voice.

Neil Bowden
Neil Bowden
Chief Financial Officer at Canada Goose

As it relates to SG

Neil Bowden
Neil Bowden
Chief Financial Officer at Canada Goose

obviously, no, we're not providing any directional on what the percentages will be of sales. But I'll tell you a couple of things. First of all, as you heard here, both in fiscal twenty twenty five as well as what's going to continue in fiscal twenty twenty six. We're focused on SG and A that is strategic and will deliver the long term value, which means it may not all come back this year. The focused areas are clearly on marketing where we've seen over the last several months a very substantial uptick in brand heat as well as paid media that's delivering.

Neil Bowden
Neil Bowden
Chief Financial Officer at Canada Goose

Second area of focus is gonna be around product design and merchandising where, again, we've seen some benefits early on, but that's a longer term play of course. And then finally, going to put some more stores in place as you've heard. So we're certainly focused on areas of investment that will deliver. And on the other side, we're going to control costs around things like headcount and other corporate costs that maybe aren't necessarily returning at the same rate or over the same time horizon.

Brooke Roach
Brooke Roach
Vice President - Equity Research at Goldman Sachs

Great. Thanks so much. Best of luck. I'll pass it on.

Operator

Our next question comes from Rick Patel from Raymond James. Please go ahead. Your line is open.

Rick Patel
Rick Patel
Managing Director at Raymond James Financial

Thank you. Good morning and congrats on the nice progress. I'd like to focus on box newness. It sounds like it's accelerating. How much of the store today represents what you would consider core products versus what you consider newness?

Rick Patel
Rick Patel
Managing Director at Raymond James Financial

And how is this going to change over the course of the next year? And then can you also help us think through the timing of some of the newer products coming in?

Rick Patel
Rick Patel
Managing Director at Raymond James Financial

Is it going to be gradual, or do

Rick Patel
Rick Patel
Managing Director at Raymond James Financial

you see a particular season where we should see a bigger uptick?

Neil Bowden
Neil Bowden
Chief Financial Officer at Canada Goose

Thanks, Rick. We it was a little bit choppy, but I think the question was really around product newness and how that assortment is going to progress. So I'll take that.

Carrie Baker
Carrie Baker
President of Brand & Commercial at Canada Goose

Yeah. I'll take that. So and and you heard me talk about it in my remarks. So we are definitely focused on newness, not just new products, but also adding newness, whether it's through fabrics, whether it's through innovations on our core products. So we continue to see core products, you know, whether it's things we've introduced, you know, ten years ago.

Carrie Baker
Carrie Baker
President of Brand & Commercial at Canada Goose

There's still lots of opportunity and demand to animate that. And so that also is part of our newness strategy. We wanna be able to give people new reasons to come back as well as attract new consumers. So you heard me talk about apparel. That is definitely a focus.

Carrie Baker
Carrie Baker
President of Brand & Commercial at Canada Goose

We see the demand there. We're serving customers across different regions, across different climates. So we wear rainwear. Seamantra would be a great example of when we introduced Seamantra, it's the pinnacle product for rain. It had such a strong impact on demand for other rainwear, other wind or roof rackets.

Carrie Baker
Carrie Baker
President of Brand & Commercial at Canada Goose

So that's what we're

Carrie Baker
Carrie Baker
President of Brand & Commercial at Canada Goose

responding to. Continue to see

Carrie Baker
Carrie Baker
President of Brand & Commercial at Canada Goose

Snowgoose also as an opportunity. That's a much more an opportunity to bring the brand to life in a very different way. Hyder's creative vision, his aesthetic, his standards and craftsmanship, that continues to delight our consumers. So I'm excited for you guys to see that shortly. In terms of I think the second part of your question is around timing.

Carrie Baker
Carrie Baker
President of Brand & Commercial at Canada Goose

This isn't it's an ongoing progressive introduction. So there's not sort of gonna be one season where you suddenly see a brand new Canada Goose. We don't need to reinvent ourselves. We're just bringing life and adding newness to round out the assortment and to meet people where they're at. So I would expect to see you will see lots of newness in fallwinter.

Carrie Baker
Carrie Baker
President of Brand & Commercial at Canada Goose

That will continue into spring. And of course, with Hyder's seasonal capsules, those are all brand new styles and colors and fabrics and you name it. So it's very exciting. Think consumers are going be very interested to see a new slightly different lens on the Canada Goose than before.

Rick Patel
Rick Patel
Managing Director at Raymond James Financial

Thanks very much.

Operator

Our next question comes from Alex Perry from Bank of America. Please go ahead. Your line is open.

Alexander Perry
Alexander Perry
Director, Equity Research at Bank of America

Hi, thanks for taking my questions here. The decision to pull the guide, was that just based on volatile trends you're seeing from an end consumer standpoint? Have you seen I guess a follow-up on that is like have you seen the same level of comp sales growth continue into the first quarter here and the momentum from the fourth quarter sort of continue here? Just wanted to ask a little more on the decision to pull the guide given not a ton of direct trade exposure. Thanks.

Neil Bowden
Neil Bowden
Chief Financial Officer at Canada Goose

Sure, Ops. So just to answer the second part first, op sales performance and just more generally sales performance in the early part of fiscal twenty twenty six has been positive. And so we're certainly encouraged by that. We see that momentum as a continuation of all the success that we've seen in the back half of the year, whether that's marketing or product or just pure better execution from a DTC perspective. The point of the guide and the decision not to provide an outlook for the year is entirely around what we see as a fairly uncertain consumer environment around the world.

Neil Bowden
Neil Bowden
Chief Financial Officer at Canada Goose

There's no doubt that the trade environment is choppy and you correctly point out that our impacts are not necessarily direct. But we're quite a ways from our peak season and where we thought we were on the February 1 and the March 1 and today are all different. And so the level of unpredictability there, at least in our view, is such that we're not prepared to provide an outlook for

Alexander Perry
Alexander Perry
Director, Equity Research at Bank of America

the year, although we've got a lot

Neil Bowden
Neil Bowden
Chief Financial Officer at Canada Goose

of great plans that you've heard that we intend on executing and we fully expect to see successful execution of those plans over the next twelve months.

Alexander Perry
Alexander Perry
Director, Equity Research at Bank of America

Perfect. And then just my follow-up was on wholesale. Can you just give us at least the guidepost in terms of how we should be thinking about wholesale this year? Are you sort of done with the curtailing of the wholesale accounts? Are you seeing any significant change in retailer order patterns in the current environment?

Carrie Baker
Carrie Baker
President of Brand & Commercial at Canada Goose

Sure. I'll take that. So yes, the majority we talked about this before. I think the majority of our streamlining efforts are behind us. So we would say, you know, f y twenty six is really a trough.

Carrie Baker
Carrie Baker
President of Brand & Commercial at Canada Goose

So we'll continue our strategy of, you know, deepening our partnerships with the best brands that are aligning with our values, with our full price strategy, with people that understand the journey that we are on. And so very pleased with what we're hearing from wholesale partners. They've seen our fall and our spring assortments. We're getting great response. That really you know, what we've done in '25 really created the blueprint for how we're gonna execute in '26.

Carrie Baker
Carrie Baker
President of Brand & Commercial at Canada Goose

We do have expansion plans, I would say, increasing our presence in travel retail, particularly in the APAC region. And then in EMEA, we have investing more with influential partners, and that means, you know, branded environments, working with them on special exclusives. That means, you know, maintaining a more consistent connection to Kennedy's brand, whether that's through training, whether that's through visual merchandising. So we're quite happy with where we're at. I would yeah.

Carrie Baker
Carrie Baker
President of Brand & Commercial at Canada Goose

We expect fiscal twenty six really to be the trough and

Carrie Baker
Carrie Baker
President of Brand & Commercial at Canada Goose

to grow from here.

Alexander Perry
Alexander Perry
Director, Equity Research at Bank of America

Perfect. That's incredibly helpful. Best of luck going forward.

Neil Bowden
Neil Bowden
Chief Financial Officer at Canada Goose

Thanks, Alex.

Operator

Our next question comes from Oliver Chen from TD Cowen.

Oliver Chen
Managing Director - Retail, Luxury, New Platforms Sector Head at TD Cowen

We've been noticing some really encouraging lifestyle changes in the store. Across global luxury, a lot of the regions have been pretty different within the sector. What regions are you most concerned about or would you call out as you think about opportunities or where you need to go? And then as we think and continue to see newness, how would you think about Jim Roy's or gross margin return on inventory and or the segment? Where you think about margins and markdown cadence?

Oliver Chen
Managing Director - Retail, Luxury, New Platforms Sector Head at TD Cowen

Just would love to understand that complexion or just general thoughts as some of the seasonal apparel may be relevant to different seasons and your SKUs may change in terms of breadth versus depth as you become more lifestyle. Thank you.

Carrie Baker
Carrie Baker
President of Brand & Commercial at Canada Goose

Thanks, Oliver. So let me walk through it. So in terms of regions, we continue to believe there's a lot of opportunity in all of them. So I would say when you look back at Q4 macro factors, probably the biggest impact was on The UK and in our EMEA region and then in China. So traffic definitely was lower.

Carrie Baker
Carrie Baker
President of Brand & Commercial at Canada Goose

Conversion was higher, so we're proud of the way that we're able to convert that traffic. I would say when you look at EMEA, we have really strong performance outside of The U. K, so that's an area or a market that we are looking at and definitely dedicating our focus and attention to. In China, the consumer, we see them slightly low. When we invest again, the demand is there when we're introducing new things.

Carrie Baker
Carrie Baker
President of Brand & Commercial at Canada Goose

We saw the results of that in Lunar New Year, and so we expect that to continue. We just continue to see, you know, lower traffic levels. In North America, I think we're well placed. We're a well placed brand. The consumer is resilient.

Carrie Baker
Carrie Baker
President of Brand & Commercial at Canada Goose

We're seeing traction in both Canada and The US. So we continue to deliver on the strategy, whether it's marketing, whether it's our DTC execution, whether it's our product expansion. So really no areas of major concern. We just understand that there are fluctuating traffic patterns that we're responding to. I can

Beth Clymer
Beth Clymer
President & COO at Canada Goose

take the second one, Oliver, on Jim or I and the inventory margin questions. Obviously, we're really pleased with our progress on that front. This year, we saw a pretty significant reduction in inventory levels, expansion of turns and strong margin performance. And I think there's lots more of that to come. I'll note we are less focused next year on absolute dollars of margin decline and more focused on driving turns, driving inventory efficiency.

Beth Clymer
Beth Clymer
President & COO at Canada Goose

With regards to markdowns, as we extend into more lifestyle categories, you've heard us share in the past that some of those newer categories are slightly lower margin, but we feel very good about the margins in those categories. We also feel very good about aggregate impact of those net new categories on consumer purchasing, more repeat purchases, more multiunit purchases, basket builders. So even if

Beth Clymer
Beth Clymer
President & COO at Canada Goose

you have a slight margin,

Beth Clymer
Beth Clymer
President & COO at Canada Goose

gross margin impact from an apparel category, for example, relative to down filled outerwear, the aggregate impact on our overall margins is going to be significantly unbanished. So we feel good about all of the trends that should drive that inventory efficiency and margin profile in the short, medium and long term.

Oliver Chen
Managing Director - Retail, Luxury, New Platforms Sector Head at TD Cowen

Okay. And a follow-up, like, as you know, timing is everything. Regarding sequencing of marketing and as you think about return on ad spend relative to product execution and changes to newness in the new designer. Would love thoughts there. And related is customer lifetime value.

Oliver Chen
Managing Director - Retail, Luxury, New Platforms Sector Head at TD Cowen

As you analyze new customers, how is that complexion looking between new versus existing insurance and thinking about that UPT opportunity? Thank you.

Carrie Baker
Carrie Baker
President of Brand & Commercial at Canada Goose

I'll take the sequencing on marketing. So you think about the difference between fiscal twenty six and fiscal twenty five, we're investing much earlier. You remember that we strategically made a decision last year to focus on putting our investments and attention and energy around our biggest brand moment, which was the introduction of Tidra's first capsule. So that happened late in the year. So what you'll see this year is whether it's a pull forward or planned earlier, we'll be executing much earlier.

Carrie Baker
Carrie Baker
President of Brand & Commercial at Canada Goose

That's already started. We had a great kickoff of spring that started back in February, and that has continued. We've executed summer to a bigger degree, so across top to bottom funnel, and that will continue with the next snow boost capsule with fall holiday. So we feel very comfortable that we're launching and executing earlier and more often. We'll have a chance to engage with our consumer ahead of peak, bringing in new customers, enticing existing customers to come back and purchase something different.

Carrie Baker
Carrie Baker
President of Brand & Commercial at Canada Goose

So feeling really good about the sequencing and the frequency investment.

Neil Bowden
Neil Bowden
Chief Financial Officer at Canada Goose

As it relates to measuring the effectiveness of those investments, Oliver, I just make a couple of comments. So obviously, further down the funnel you are the easier it is to measure return either on ad spend or on investment. We are fully intending on moving up the funnel and driving brand heat and those metrics in terms of returns are not necessarily financially as you said financially in a over a particular short period of time. We look at how is brand heat going to grow and how do we compare to both our trends as well as what we view to be appropriate benchmarks there. I'd say just to be transparent around consumer life cycle and lifetime value, we're probably at the earlier stages of maturity there.

Neil Bowden
Neil Bowden
Chief Financial Officer at Canada Goose

That's an opportunity for us, especially as we build out some capabilities on marketing analytics to evaluate what that looks like over time. And as we grow both awareness and execution throughout the marketing funnel, I think we will improve on our ability to measure that and therefore be able to drive improvement over time.

Oliver Chen
Managing Director - Retail, Luxury, New Platforms Sector Head at TD Cowen

Thanks a lot. Best regards.

Neil Bowden
Neil Bowden
Chief Financial Officer at Canada Goose

Thanks, Oliver.

Operator

We have no further questions in queue. I'd like to turn the call back over to management for any closing remarks.

Neil Bowden
Neil Bowden
Chief Financial Officer at Canada Goose

Okay. Thank you, everyone. Appreciate your interest today. And if you

Neil Bowden
Neil Bowden
Chief Financial Officer at Canada Goose

have any further follow ups, please reach out to the talented Investor Relations team here at Canada Goose. Take care and have a great day.

Operator

This concludes today's conference call. Thank you for your participation. You may now disconnect.

Executives
    • Neil Bowden
      Neil Bowden
      Chief Financial Officer
    • Dani Reiss
      Dani Reiss
      Chairman & CEO
    • Carrie Baker
      Carrie Baker
      President of Brand & Commercial
    • Beth Clymer
      Beth Clymer
      President & COO
Analysts
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Key Takeaways

  • We delivered 7% year-over-year revenue growth in Q4, with direct-to-consumer revenue up 12% and comparable DTC sales up 7%, led by a 17% DTC comp gain in North America.
  • Inventory was down 14% year-over-year for a sixth consecutive quarter, boosting turns to 1.0× and resulting in cleaner stock across channels to support more targeted newness.
  • The company plans to increase marketing spend as a percentage of revenue and shift investments up-the-funnel to build brand heat through high-profile campaigns and upper-funnel activities.
  • Canada Goose outlined four operating imperatives for fiscal 2026—brand heat, product expansion (including apparel growth), strategic channel development, and efficient operations with pace and accountability.
  • Management did not provide financial guidance for fiscal 2026, citing an uncertain macro and trade environment, though it noted minimal direct P&L impact from new U.S. tariffs due to its Canadian manufacturing.
AI Generated. May Contain Errors.
Earnings Conference Call
Canada Goose Q4 2025
00:00 / 00:00

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