Q3 2020 Under Armour Inc Earnings Call
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Ladies and gentlemen, todays conference is scheduled to begin shortly please continue to standby I think to be patient.
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Ladies and gentlemen, thank you for standing by and welcome to the under armour Inc. third quarter earnings webcast and conference call. At this time, all participants I know it sounds like it [laughter].
Speaking of presentation, there will be a question and answer session.
That's the question Damon session, you will need to press star one on your telephone. Please be advised that todays conference is being recorded if you acquire any further assistance. Please press star then.
I would not I can't accommodate speaker today man I make a VP of Investor Relations and corporate development. Please go ahead, Sir [noise]. Good morning, and thank you everyone joining us for under Armours third quarter 2020 earnings Conference call.
The information being made available today includes forward looking statements that reflect under Armours view of its current business as of October Thirtyth 2020.
Situations for future events that may impact our business moving forward.
Statements made today are subject to risks and uncertainties that are detailed in documents regularly filed with the FCC and the safe Harbor statement included in this mornings press release, both of which can be found at.
At our web site at about the under armour Dot Com it's.
It's important to note that due to ongoing uncertainty related to COVID-19, and its potential effect on global markets. We continue to expect material impacts on our business results.
With uncertainty about the duration and extent of the virus is immediate and long term impact on the global retail environment.
Content discussed on today's call could change materially at any time.
Accordingly, future results could differ meaningfully from historical practices more results or current descriptions of estimates and suggestions.
On today's call, we may reference non-GAAP financial information, including adjusted currency neutral items, which are defined and are FCC rules in this mornings press release.
May also hear us refer to amounts under U.S. GAAP reconciliations of GAAP to non-GAAP measures can also be found in a press release, which identify and quantify all excluded items and provides our view about why we believe this information is useful to investors.
Joining us on today's call will be under armour, President and CEO, Patrick Frisk and CFO, Dave Bergman.
Following our prepared remarks, we'll open up the call for questions with that I'll turn it over to Patrick.
Thank you Lance and good morning, everyone and welcome to our third quarter 2020 conference call before we discuss our results I'd like to pass along under Armours, well wishes and the hope that you and your loved ones are staying healthy and safe during the ongoing COVID-19 pandemic.
For this and many other reasons 2020 has proven to be a challenging and transformational year for under armour in an uneven global economic environment. We've continued to make tough decisions across our business to ensure that our base is stable and we have the agility to return to profitability in the near term over the long term we are confident that the actions we've taken.
Have created an operating model that we believe can deliver consistent value to our consumers and customers as well as sustainable return to our shareholders.
Backed by a stronger foundation enterprise level discipline, and green shoots across many areas of our business. We believe that we are well positioned to compete for premium brand right growth as we work to fulfill our mission vision and 2021 and beyond.
In this respect you've heard me speak many times over the past year about our mission vision and values. These.
These elements unify our global culture, there why we're here and what we do what we do our North Star and Excitingly as we work to close out this body of work and installed a final cornerstone of our re imagined house, we are shifting to become a purpose led organization.
In our transition from being a product driven to purpose led we didn't have to go very far to find our purpose.
At the intersection of our distinct strengths and then an obsession with improvement under Armours purpose is we.
We empower those who strive for more.
For those who show up with relentless persistence day in and day out to train compete and recover pushing themselves pass the limits of what they thought was possible and being just a little bit better than they were before this is why we exist and why under armour athletes know we've always got their backs.
With 2020, nearly complete I am proud of our team's work and believe that the critical mass of our transformational challenges behind us.
Our target consumer and operational playbook are well defined and understood.
Well I'll leave the financial details of our quarter today, our third quarter results are tangible evidence of the progress we've made with our business to be sure. We have more work to do and of course, it remains a highly uncertain environment, where the pandemic so to that effect, we're staying focused on the things. We can control. This includes four key areas.
That will fortify our company and a power ambitions as a premium athletic performance brand.
First is continuing to strengthen the brand through increased engagement, then consideration with the focus performer second or further refinements to our operating mall to drive efficiency across all end to end processes for our consumers and customers.
Third is prioritizing a direct consumer focused approach to elevate our brand experience and deepen our correction with under Armours consumers.
And finally through one of these efforts were continuing to amplify our discipline around profitability to drive sustainable shareholder value over the long term.
Starting with strengthening the brand our global brand marketing platform and the execution continues to fuel a well orchestrated singular voice that is driving greater engagement and consideration among folks performers.
We are successfully activate your assets more effectively across physical and digital touch points, allowing for more personnel personal life activation through a sharper data driven point of view a.
A couple of areas, where this momentum is showing up in our womens and footwear businesses two of our largest long term growth opportunities.
Taking a moment to touch on each of these I'll start with a women's business.
Within our train category for the quarter key innovations like the Infinity broad Meridian Pan showed continued strength, making the case for the most popular under armour women's products of 2020.
Within footwear authenticating ourselves as a premium player remains paramount to our long term success.
By more deeply understanding an athlete's performance journey, whether it's training competing or recovering our innovation pipeline and ability to elevate our offerings continue to fuel our product engine.
One highlight on the quarter was the launch of our first ever women specific basketball shoe the UAE hovered break through to date, it's been well received in the marketplace and demonstrates our commitment to delivering innovative performance solutions for the focus performer.
We're also very excited about the upcoming launch of the create basketball shoe, which would be the first footwear to feature under Armours newest and fourth christening platform you a flow at the most technical cushioning offering an under armour is history, you way flow performance precisely as it sounds fluid light an unfailing as it eliminates all distractions.
For the athlete by using a revolutionary material and streamlined the sign that removes a typical rubber outsole in translation. The UAE flow technology allows us to create our most of BDNA and highest traction footwear yet.
You really flow is also set to launch in our running platform in early 2021 as under Armours, most pinnacle running footwear expression, yet we're very excited about bringing this innovation, it's running as we believe it will help strengthen our consideration among consumers while elevating our premium performance positioning.
And finally, I would be remiss not to mention our connected footwear platform, which a couple of weeks ago hit an incredible milestone, surpassing 1 million pairs of shoes that have been connected to our map my own App. This is an accomplishment that we are incredibly proud of as we drive deeper into the intersection of data connectivity product and experiences.
Turning to our second area of focus I'd highlight our operating model evolution.
Throughout 2020, we have continued to refine how we work to ensure we are appropriately position from a strategic operational and financial perspective for the size company. We are today, while being set up the scale responsibly along with future growth. All of this of course is centered around an absolute focus on profitability.
And with that our improved go to market process and highly disciplined inventory management has afforded us flexibility as we navigate these uncertain times, including dynamic changes in consumer demand.
In the third quarter demand proved to be much higher than we had anticipated, especially in North America.
Fortunately, our second quarter carryover product, meaning inventory that went unfulfilled due to store closures during that period allowed us to meet part of this unexpected demand.
Additionally, inventory sold through at lower than expected discounts and markdowns. These factors helped us.
Post flat revenue results in the third quarter versus our previous expectation of being down 20% to 25%.
Looking at the balance of the year as we stated in our last call we cut our inventory purchases by about 30% for the back half of 2020.
This along with more planned spring product deliveries in early 2021 versus late 2020, and a few other drivers that Dave will detail means we continue to expect topline headwinds in the fourth quarter that said our fourth quarter outlook has improved from our July thirtyth expectation.
As we turn into 2021, we're also focused on prudent marketplace management and working proactively to ensure that we show up in distribution that is brand right profitable and capable elevating the under armour brand with folks performers.
Accordingly, we have begun identifying certain on differentiated retail partners, primarily in North America to more meaningfully reduce our wholesale footprint, starting next year and into 2022 and beyond to be clear wholesale remains a crucial part of under armour is future, but as the broader retail landscape continues to evolve so must we.
Okay.
Switching gears to our third area, which is prioritizing a direct consumer focused approach.
Our efforts remain centered around becoming a best in class retailers capable of providing a premium under armour experience whenever and wherever consumers directly engage our brand.
Starting with the E Commerce, which continues to be a bright spot. This year, we saw more than 50% growth globally during the quarter and now with the majority of our global ecommerce sites on one scalable platform. We are working to unlock a more robust functionality to power our CRM efforts to help us drive more relevant and personalized interactions with our consumers.
In our brick and mortar business, we continued to make progress in evolving our store concepts towards more scalable brand right and profitable formats, while continuing to invest in the capabilities needed to operate as a best in class retailers.
Across our company, we are holistically embracing a direct to consumer focused approach obsessing every moment along to consumers brand journey to help us make better decisions to drive greater relevance and connectivity.
Tying all of these strategies together brings us to our last priority, which is an ability to deliver sustainable brand right profitable growth and therefore returns to our shareholders over the long term.
It's well understood throughout the organization that we must empower our earnings potential as one of the most essential elements of our investment thesis.
As we sit here today I believe that our operating malls transformation driven by brand elevating strategies centered on the focus performer and an increasingly more appropriate cost structure is strongly aligned with our long term goals.
Now before handing it over to Dave I'd like to touch briefly on another announcement that went out this morning related to our decision to sell my fitness Pal platform, which is the largest part of our connected fitness business segment.
My fitness Pal has an impressive record of innovation and strong user growth that has enabled it to sustain its leadership position and scale as one of the world's most popular food and fitness tracking apps.
However, as we work to more sharply define our strategy over the past few years. It became evident that my fitness Pal did not fully aligned as a core asset with our target consumer needs to focus performer.
In this regard from an under armour perspective, we believe this divestiture sharpens, our long term digital strategy by simplifying our consumers brand journey and increases our ability to better harness the power of Mapmyfitness platform as we work towards a singular cohesive you a ecosystem.
From an myfitnesspal perspective. This move provides an excellent home for the brand and its passionate team mates with a new owner, who wouldn't holistically focus on driving that business going forward.
With that I'll hand, it over to Dave.
Thanks, Patrick considering the current uneven economic environment all in all I'd say, we executed well in the third quarter as we work to meet higher than anticipated demand.
Let's take a look at how we did starting with revenue.
Third quarter revenue was flat at $1.4 billion compared to the prior year, which came in better than expected due to higher than anticipated demand across our wholesale and DTC channels.
From a channel perspective, our wholesale revenue was down 7% lower.
Lower sales in North America, where the primary driver of this decline despite performing better than our previous expectations due to higher than expected customer demand.
Our direct to consumer business increased 17% driven by continued strength in our E commerce business relative to our previous plan, we experienced better than expected traffic trends in our ecommerce business.
Our licensing business was down 15% different primarily by our license business in North America.
By product type apparel revenue was down 6% driven primarily by declines in our team sports and train categories.
Where was up 19% driven by considerable strength in our run and train categories.
Finally accessories was up 23% with all of the growth being driven by our new sports masks, which we just started selling in the second quarter of this year.
From a regional and segment perspective third.
Third quarter revenue North America was down 5% driven by lower wholesale revenue due to ongoing impacts from COVID-19, and reduced off price sales.
These headwinds were partially offset by strong ecommerce growth in our DTC business in the quarter.
In EMEA revenue was up 31% driven by growth in our wholesale business as some shipments with distributors shifted from Q2 into Q3 due to the impacts of COVID-19.
Additionally, we saw solid growth in our DTC business.
Revenue in Asia Pacific was up 15% driven by growth in both wholesale and DTC.
In Latin America revenue was down 15%.
Driven by continued negative impacts from the COVID-19 pandemic.
As of September Thirtyth about 80% of locations, where the brand is sold had been reopened in this region. However.
However, within DTC, our ecommerce business delivered very strong growth for the quarter.
And finally, our connected fitness business was down 6% due to a onetime development fee recognized in the prior year's quarter, partially offset by higher subscription revenue in the current year's period.
Third quarter gross margin was down 40 basis points to 47.9% due to approximately 130 basis points of negative impact from COVID-19 related pricing and discounting.
In about 20 basis points of negative impact related to product mix as our footwear business skewed higher as a percentage of total revenue.
These items were partially offset by about 60 basis points of supply chain benefits, primarily driven by product cost improvements.
And 60 basis points of positive channel mix, which benefited from lower year over year sales to the off price channel as well as increased DTC mix.
Relative to our previous expectations for gross margin in the third quarter. Our results were significantly better than expected as we experienced higher than anticipated demand, which allowed us to sell in and sell through with considerably less discounting and markdowns than we had initially anticipated.
SGN expense was generally in line with last year's third quarter at 554 million.
In the third quarter, we recorded $74 million of restructuring charges and certain impairments related to long lived assets.
As a reminder, we expect to incur a total estimated pre tax restructuring and related charges under this plan in the range of 550 to 600 million primarily in 2020.
Year to date, we have realized 410 million in restructuring and related impairment charges and $140 million from impairments of long lived assets and goodwill.
We continue to expect about $40 million to $60 million of related savings for the full year.
Our third quarter operating income was 59 million, excluding restructuring and impairment charges adjusted operating income was 133 million.
After tax we realized net income of $39 million or nine cents of diluted earnings per share.
Excluding restructuring charges as well as the noncash amortization of debt discount on our senior convertible notes and deal costs related to the planned sale of my fitness Pal. Our adjusted net income was $118 million or 26 cents of adjusted diluted earnings per share.
From a balance sheet perspective, we ended the third quarter with 866 million in cash and cash equivalents with no borrowings outstanding under our $1.1 billion revolver.
And finally inventory grew 17% ending the quarter at 1.1 billion.
Turning to the balance of the year I would like to take a moment to provide some color on our fourth quarter expectations.
In the fourth quarter, we expect revenue to be down at a low teen percentage rate. This.
This outlook reflects meaningful improvement from the previous expectation that we gave on our last earnings call driven in part by the more robust consumer demand trends, we experienced in the third quarter that have continued into October with.
With that being said in addition to ongoing general uncertainty around COVID-19, there are a few areas, we see as revenue headwinds in the fourth quarter.
First as mentioned on our last call timing impacts from COVID-19 related to customer order flow and changes in supply chain timing is expected to result in more planned spring product deliveries in early 2021 versus late 2020.
We anticipate this change will negatively impact our fourth quarter by approximately nine percentage points compared to the prior year fourth quarter.
Additionally, we expect our fourth quarter licensing revenues will be down about 50% due to significantly lower contractual royalty minimums, along with contract settlements meaningful in last year's fourth quarter on a comp basis.
Finally, as we continue to manage the marketplace with a keen focus on brand right premium growth.
Lower year over year sales to the off price channel will also serve as a revenue headwind.
That said, we now expect off price as a percent of global revenue to be approximately 4%.
For the year.
Which is at the lower end of our previously disclosed range so excellent progress there.
While promotional activity levels in the fourth quarter have improved relative to our prior outlook. We continue to expect them to be significantly higher than last year as such we believe this will put meaningful downward pressure on gross margin in the fourth quarter.
Now before transitioning the queue in a.
While it is not our typical practice to provide color for the upcoming year on this call we would like to make a few initial observations about how we see our business developing in 2021.
Of course, all of this is predicated on our business continuing on the same general path and macros that we've seen most recently and moving them forward into the new year.
Meaning we're assuming no major retail or other business shutdowns or other adverse economic impacts related to any accelerated COVID-19 flare ups.
With that said from a revenue perspective, there are a few things that we currently anticipate will serve as headwinds in 2021, as we work to drive premium brand right growth.
First is the sales my fitness Pal, which today represents nearly all of the connected fitness segment revenue. So following the close of that deal that revenue goes away completely.
Second as we alluded to earlier, we will begin to exit certain undifferentiated wholesale distribution, primarily in North America, starting next year.
And over the next couple of years, we expect a more meaningfully reduce our overall north American distribution points by about two to 3000 doors. So heading toward about 10000 doors by the end of 2022 in our largest region.
And finally within DTC, we continue we plan to continue to pull back on promotions and discounts to drive our premium brand positioning, which we expect will result in some near term implications on topline results.
We continue to support healthier margins as well.
Next when framing up gross margin and ESG today, it's still too early for specific color, but given our expectations around improving quality of revenue and our disciplined focus around cost management, we expect to have more agility in the interplay of these line items to manage our bottom line better as the year develops.
And with respect to our bottom line and arguably one of the most critical parts of our turnaround.
We have line of sight to delivering slightly positive earnings per share in 2021.
In closing.
We're proud of the progress we've made and to reiterate once again, we believe that the critical mass of our transformational challenges is behind us at this point.
That's not to say, we necessarily expect smooth sailing from here on out but from a strategic operational and financial perspective, we believe that we are better positioned to capitalize on our strengths moving forward.
With that we'll turn it back to the operator for your questions.
Thank you as a reminder to ask a question you need to press star one on your telephone so let's try a question press the pound key T sand badly compared to Q and a loss.
Our first question comes from regimen.
Capital markets. Your line is now open.
Hey, good morning, and thanks for taking the question guys. So Patrick as you start to you quickly rebase the business built the healthier base of business and are now kind of seemingly orienting towards growth long term are there particular categories that you think are well suited for this focus performer, where we should start to expect some outside growth and then also as.
We introduced this new cushioning technology is this is this a product that will be at scale next year or is this a pinnacle product that will take a while to work through the lineup. Thank you.
Yeah. Good morning, yes.
As it relates to the categories that we are looking.
To be our growth drivers so to speak going forward. We still believe that there is a tremendous amount of opportunity for us in our some of our core team sports and men's training categories, but what we've seen this year that we're very excited about is is the energy in our in our women's business.
We have a number of different products, both in apparel and footwear that are working very well for us now infinity brawl fly by shorts and meridian pounds Meridian infused.
The mocking issue for women the Phantom to us etcetera, etcetera. So so we see definitely women's continuing to be a big.
Big part of our growth and footwear footwear is going to continue to to help drive the growth going forward and as you talked about and the platforms. We now have four platforms in the marketplace and they all play a role.
And in terms of how we think about and the positioning of the brand and I'm one of the things that were very proud over the last three years to have accomplished is really the ability to start to build franchises and you've seen that through our hub or franchise flow will be another franchise that sits on top of hover at a at the most pinnacle expression of the brand.
Thank you.
Thank you. Our next question comes from Randy Konik with Jefferies. Your line is now open.
Yes. Thanks, a lot. So I gave you gave us some good perspective on.
Reducing the wholesale doors I guess my 10000 by 2022. So it's just a medium term what's the what should we be thinking about again from a mix perspective on revenue by whole.
Wholesale versus E com versus.
We owned stores, how do we think about that and how do you think about that impacting obviously should be a positive margin shift, but the how significant can we expect that to be over the medium term.
Yes, I mean, we're not at a point and we're going to give a lot of details as we go into 21, we're just trying to stay high level, we still got a lot of work to do to fine tune next year, but we are looking at the company to lead more from a DTC approach focused on consumer Centricity to drive best experiences unlock potential full price retail.
Ill.
Leverage factory house for inventory management et cetera.
Definitely invest in digital cross owned and wholesale partners.
I think one thing that's a little bit tricky for us, though to remember is even though we're going to be focusing a lot on DTC.
The model branded stores in APAC are mainly partner owned and that runs through our wholesale revenue.
So from a mix of DTC to wholesale you may not see a significant change in the coming years, but the actual model branded stores and kind of full view of the brand in those stores will increase.
As well.
Got it and last one more question.
Yes, it sounds like Patrick you'd be you'd be much more bullish on.
The wins that you're seeing late in the lending business, what's kind of been the breakthrough there have been more marketing or just noticing on the product and then just related then just separately as well.
On the mass side Ive known on kind of the long are you seeing loss also helping to rise apartment within the E. Commerce business, we saw a lot of growth in the quarter and how we should be thinking about the last at least for the foreseeable few quarters, helping to drive.
The channels of distribution and a constant going forward. Thanks.
Okay. Thanks, Thanks, Ronny so I'll start with the sole with women's and then I'll switch over into the Max masks with womens. It did its a result of what we've done starting to at the beginning of this year remember again 2020 was the first year that we were able to fully deploy our go to market strategy across.
All categories are the brand.
But but more importantly, with it with a very strong singular message that we knew was going to resonate with both men and women.
On the back of that we also knew that we had better product that was delivered on time and with the right marketing. So this is really what you're seeing is our is our go to market.
Really starting to.
Fire and as it relates to women we.
We have been as I said before a successful across many different products.
So it isn't just one product here or there it's the entire head to toe approach.
And ultimately it is execution through our go to market that you're starting to see Si play up and its been consistent through the year. So it isn't something that just started lately. It's it was there in spring and summer. It's now they're in fall and we believe it's going to continue into next year and.
You know I think for us women.
Women's is definitely one of the growth engines, but it's really nice to see how our brand is now resonating across both genders.
The mask.
As an interesting.
One for us because we decided very early on that the mask was going to be something that we made for athletes. So our approach to go with the mask and make it a sports mask and actually marketed as some as a tool that you use when you're working out has been the differentiator for us it's a high quality product that with high functionality.
Great fit and now also with a number of different colors and then last one that we were just released with the rock has been really successful as well, which is more kind of an upscale version if you like or the mask. So for us we're going to be looking at that as a as a segment in itself. You. If you if you like inside of accessories, where we have more products coming out around that.
And in terms of whether you're able to convert the people that are coming onto our platforms by just the mask. That's one of the things that we are working to do.
Based on the new E Commerce platform that we have and the capabilities, we're building with CRM and loyalty so big opportunity there for us going forward.
Thank you.
Thank you. Our next question comes from San Francisco with BMO Capital markets. Your line is now open.
Thanks, Good morning, guys really nice progress great job.
Patrick as as you as you guys continue to elevate the brand can you speak to how you're thinking about our opportunity from here. It doesn't have to be next quarter, but just as you're thinking about where that opportunity lies and then Dave along those lines any help on taking a step back and thinking through the longer term EBIT margin recapture opportunity. Thank you.
In terms of in terms of.
One of the things that we're very proud of this year is that we'll be able to grow our margins in a year, where we're taking a lot of revenue out of the top line and and to be able to do that you've got to be able to command a price for your product.
And were clearly able to do that with less discounting and more premium pricing more premium positioning.
In some of the areas that you are seeing that especially I would say is in our footwear. This year. We've launched that we started by launching the mocking already India, which was a big success for us our highest price running shoe ever at a $150. We actually then came in with two more $150 shoes defense and two in the PR three.
Rock training shoe all of them selling through really well so for us being able to now compete at that premium level also in footwear and in combination with less discounting and more premium across the board.
It's going to help drive.
Everything up for us and the most important bellwether. There of course is the margin something we're very proud of maybe you want to add some color on that day, yeah, I think relative to longer term EBIT.
We're excited about kind of returning to that long term profitable growth journey next year.
And we're going to keep marching forward, there's there's a fair amount of opportunities across all fronts. As we think about gross margin with the business going forward.
Relative to DTC mix relative to running a much healthier percentage of of off price channel sales.
And overall, just continuing to execute so much more cleanly than we may have done in prior years.
And then as far as wrapping up this restructuring plan. We're very excited about how deeply we have been able to go and how well we've been able to transform our operations to be more effective and efficient and be able to draft off without more next year and into the next few years after that so.
Gross margin percentage to estimate a percentage of revenue where there's opportunities across the board. There so longer term our absolute plan is march that up to 10% plus which year. We hit that is something we will get to at our next investor day, but we're excited about the progress we're making in stepping into next year.
Great. Thanks, a lot nice job in the best of luck for the rest of the year. Thank.
Thank you.
Thank you. Our next question comes from Alex and General Office with Goldman Sachs. Your line is now open.
Good morning, and thanks for taking my question I had another question on the.
Planned to pull out of two to 3000 undifferentiated wholesale doors.
Wonder if you could share with us what percentage of North America revenue sales represent and what the profile of those stores are they predominantly small chains ought to change.
Department stores, what did those look like.
Sure Hi, Alex This is Patrick so for for the next couple of three years, we will be it will be a work in progress.
And it will be across.
And every size of customer I would say part of it is larger customers. Some of it is the tale that you're cutting.
Ultimately for US it's important that our brand shows up the right way and that were able to drive the brand. The way that we feel is the venture be driven and that will be the approach that we take.
That's very clear and then my second question is related to E commerce.
Continued to see strong growth in that channel continue.
Continues to be a priority I wonder if you could update us on where we are in terms of profitability about channel and what investments need to be.
Maybe to me off of that.
Yeah, I'll start and I'll hand, it over to Dave one of the great things that we were able to accomplish in this quarter I'm very proud of this we were able to switch over from our aging very aging something that we actually put into the market in the early two thousands.
Our old homegrown platform onto our new E Commerce platform that we had already been running for a few years in Europe, we do that in July without missing a heartbeat and.
I'm very proud of the ramp down ramp up to only seven days team did a phenomenal job.
The benefit of that is that we're now more or less on one platform around the world apart from China and the second benefit to it is that we will be able to benefit from of course best practices across the world, but also an ability to merchandise and ultimately drive our new CRM and loyalty programs onto that.
Platform as well, which has the added benefit that is something that will start to happen throughout 2021.
And will ramp as we get get into the back half of the year, Dave do you want to add some yeah I'll just add a little bit I mean, we were super excited with how well the new platforms performing and globally, having growth over 50% in E. Com in Q3 is a great Testament to that so the team has done just a phenomenal job cross functionally on standing that up in and around the world drive.
Forward on that platform.
And we expect that to continue to be a strong growth area for us in Q4, as well and as we move into 2021 and to Patricks point I think the key investment areas that we've been really really diving into a little bit last year a lot. This year and continuing into next year is on the CRM front, the personalization front the loyalty program front, where.
We are going to be rolling out various pilots around the world and then expanding it globally and then also overall just really expanding our.
Our omni channel capabilities, as well and leveraging and come through that also so lot of fronts that were investing their digital is a massive area of opportunity for us. So we're excited about it.
Then thanks for the color.
Thank you.
Next question comes from Matthew Boss with Jpmorgan. Your line is now open.
Great Thanks, and congrats on the progress.
Thank you Beth Thank you Matt.
Patrick maybe just to circle back on North America, and not to beat a dead horse here on the 20% door count caught that you guys are making and maybe just size that up relative to the 3.6 billion dollar revenue base. In 2019 is it best to think of that revenue base in North America now is a peak or.
Or how best to think about the market size, you're targeting by the end of 2022, I guess really the question is about the sales transfer you see as you've caught these doors relative to direct to consumer growth.
Yes, I think first of all I just want to make it very clear we're gonna grow in North America.
I think thats incredibly important to state I think the composition of that growth is going to change over time and Dx sac.
The exact measurement of what grows and what what goes back and we're not prepared.