Q3 2024 Canada Goose Holdings Inc Earnings Call

Thank you for standing by my name is Ian and I will be your conference operator today.

Ian: At this time I would like to introduce you to the Canada Goose Q3, FY 'twenty four earnings call.

Ian: All lines have been placed on mute to prevent any background noise.

Ian: After the Speakers' remarks, there will be a question and answer session.

Ian: If you would like to ask a question. During this time simply press star followed by the number one on your telephone keypad.

Ian: Do you like to withdraw your question again press Star one.

Ian: Yes.

Ian: I will now hand, the call over to Ana Raman head of Investor Relations you May begin your conference.

Ana Raman: Thank you operator, and good morning, everyone with me are Dani Breeze, Chairman and CEO, Jonathan Sinclair, EVP and CFO Cary Baker President of brand and commercial best climber, President of Finance strategy and administration and Neil Bouton Deputy.

Ana Raman: <unk> and incoming CFO.

Ana Raman: After Danny's and Jonathan's prepared remarks, we will open it up for your questions our call today, including the Q&A portion includes forward looking statements. Each forward looking statement, including without limitation discussion of our financial outlook is subject to risks and uncertainties that could cause actual results to differ.

Ana Raman: Materially from those projected.

Ana Raman: Certain material factors and assumptions were considered and applied in making these forward looking statements.

Ana Raman: Additional information regarding these statements factors and assumptions and regarding material factors that could cause actual results to differ from those projected is available in our earnings press release issued this morning, as well as in our filings with U S and Canadian Securities regulators.

Ana Raman: These documents are also available on the Investor Relations section of our website.

Ana Raman: The forward looking statements made on this call speak only as of today and we undertake no obligation to update or revise any of these statements were reporting Canadian dollars. So all amounts discussed today are in Canadian dollars unless otherwise indicated.

Ana Raman: Please note that financial results described on today's call will compare third quarter results ended December 31, 2023 with the same period ended January one 2023 unless noted otherwise.

Ana Raman: Lastly, our commentary today will also include certain non Ifr F financial measures, which are reconciled at the end of our earnings press release with that I'll turn the call over to Danny.

Operator: Thank you for standing by. My name is Ian, and I will be your conference operator. At this time, I would like to introduce you to the Canada Goose Q3 FY24 earnings. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad.

Danny: Thanks, Dan and good morning, everyone.

Danny: Performance for the third quarter reflected strong execution and a mixed consumer environment.

Danny: <unk> were up 6% over the last year with adjusted EBIT of $207 $2 million.

Danny: We're a 34% margin in line with our guidance range.

Danny: While we continue to see headwinds in North America, and Europe, driven by economic conditions, the strength of our results in Asia Pacific the increase of demand for our emerging product lines and the growth we achieved during key holiday shopping days across all regions.

Operator: If you would like to withdraw your question, again, press the star. Thank you. I will now hand the call over to Anna Rahman, Head of Investor Relations. Anna, you may begin. You're up. Thank you, Operator, and good morning, everyone. With me are Dani Reiss, Chairman and CEO, Jonathan Sinclair, EVP and CFO, Kerry Baker, President of Brand and Commercial, Beth Clymer, President of Finance Strategy Administration, and Neil Bowden, Deputy and Incoming CFO. After Dani's and Jonathan's prepared remarks, we will open it up for your questions. Our call today, including the Q&A portion, includes forward-looking statements. Each forward-looking statement, including, without limitation, discussion of our financial outlook, is subject to risks and uncertainties that could cause actual results to differ materially from those projected.

Danny: Clearly demonstrate our brandy and taken together they demonstrate a differentiated luxury positioning our products are rooted in performance performance per far enough becomes luxury. This is what inspires us to continue to reinvent our icon expand our categories and introduce newness with style.

Danny: In Q3 key consumer moments were strong with sales over the Black Friday, along we could up more than 40% versus last year.

Danny: It's typically a promotional retail environment, our sales were a full price and revenue grew across all regions with record traffic in our stores.

We had our best single day ever in China outperformed our industry, leading luxury hotel brand on Tmall again.

Danny: Yes.

Danny: This along with our overall third quarter results in Asia Pacific validate the strength of our brand in the region, especially in the context of a highly promotional environment outside of our own channels.

Operator: Certain material factors and assumptions were considered and applied in making these forward-looking statements. Additional information regarding these forward-looking statements, factors, and assumptions, and regarding material factors that could cause actual results to differ from those projected, is available in our earnings press release issued this morning, as well as in our filings with U.S. and Canadian securities regulators. These documents are also available on the investor relations section of our website.

Danny: In Q3, we remain focused on building for the long term guided by our three strategic pillars, driving consumer focused growth building, our DTC network and product category expansion.

Danny: Take you through the progress that we've made in each of these pillars during the past quarter.

Danny: First driving consumer focused growth.

Danny: In Q3, we invested in our brand to inspire and engage customers via elevated experiences and exciting collaborations last quarter I spoke about elevating the customer experience through Canadian once experienced that define the Canada goose customer journey.

Anna Rahman: The forward-looking statements made on this call speak only as of today, and we undertake no obligation to update or revise any of these statements. We are reporting 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 third quarter results ended December 31, 2023, with the same period ended January 1, 2023, unless noted otherwise. Lastly, our commentary today will also include certain non-IFRF financial measures, which are reconciled at the end of our earnings press release. With that, I'll turn the call over to Dani. Thanks, Anna, and good morning, everyone.

Danny: And every interaction expertise behind every recommendation.

Danny: Early results have been promising.

Danny: Store net promoter score in Q3 improved meaningfully compared to the same period last year and on an already high base and we saw a significant increase in the percentage of shoppers, indicating that our in store brand and product storytelling is positively impacting their perception of the brand.

Danny: I am excited about the long term benefits of our focus on experience.

Danny: I saw this firsthand in our stores, while working on our European store in Toronto over the Black Friday weekend.

Danny: Our entire leadership team because they worked in many of our other stores around the world.

Dani Reiss: Our performance for the third quarter reflected strong execution in a mixed consumer environment. Sales were up 6% over the last year with adjusted EBIT of $207.2 million, or a 34% margin in line with our guidance range. While we continue to see headwinds in North America and Europe, driven by economic conditions, the strength of our results in Asia-Pacific, the increase in demand for our emerging product lines, and the growth we achieved during key holiday shopping days across all regions, each clearly demonstrate our brand need, and taken together, they demonstrate our differentiated luxury positioning. Our products are rooted in performance, and performance pushed far enough becomes luxury.

Danny: And now turning to collaborations, which we leveraged to tap into new and diverse audiences in the third quarter, we launched six including with Babe concept OBO, the shoe surgeon peer boss and with Massagers Giants of Africa organization, which empowers and aspire to African you through basketball to make lots of change.

Danny: Their communities work, but it is incredibly important to seven years.

Our Q3 collaborations delivered on our objectives to drive brand heat and reach new target audiences. As a result of our efforts consumer engagement metrics and incentives to our own database, we're above our year to date average.

Danny: Last week, our brand was featured in the most recent Vogue business Index, an index of the world's leading luxury brands were pleased to see it for so long the list again and to see our ranking improvement year over year.

Dani Reiss: This is what inspires us to continue to reinvent our icons, expand our categories, and introduce newness with SAAS. In Q3, key consumer moments were strong, with sales over the Black Friday long weekend up more than 40% versus last year. In what is typically a promotional retail environment, our sales were at full price, and revenue grew across all regions with record traffic in our stores. We had our best single day ever in China, outperforming our industry as a leading luxury outdoor brand on Tmall. Again, at full price.

Danny: Turning to our second pillar building, our DTC network.

Danny: In Q3, we added two permanent stores, one in New Jersey, The American Dream Mall, and one in Kobe, Japan with <unk>.

Danny: We also converted our fifth Avenue store in New York City to permanent bringing us to 65 permanent stores at the end of the period.

Danny: We also opened a permanent store in January and engine in China, where we now have 22 permanent locations.

Dani Reiss: This, along with our overall third-quarter results in Asia-Pacific, validate the strength of our brand in the region, especially in the context of a highly promotional environment outside of our own channel. In Q3, we remain focused on building for the long term, guided by our three strategic pillars, driving consumer-focused growth, building our DTC network, and product category expansion. Let me take you through the progress that we've made on each of these pillars during the past quarter.

Danny: And on the wholesale front, we expanded our travel retail provinces, Seoul Korea, a couple of pop up locations.

Danny: We will be opening of the Frankfurt Airport store in the second quarter.

Danny: I am very encouraged about all of that we're learning in our early stages of this new channel and we believe that this will help us reach a new clientele.

Danny: Q3, DTC revenue increased by 14% over last year, reaching $514 million, primarily driven by DTC performance in Asia Pacific and specifically greater China.

Dani Reiss: First, driving consumer-focused growth. In Q3, we invested in our brand to inspire and engage customers via elevated experiences and exciting collaborations. Last quarter, I spoke about elevating the customer experience through Canadian warmth, an experience that defines the Canada Goose customer journey: warmth in every interaction, expertise behind every recommendation.

Danny: The strength of our brand and product Assortments combined with healthy consumer spending during key shopping moments across greater China contributed to the stronger online and offline sales in Q3 versus the previous year.

Danny: Our results demonstrate that our investment in China is getting traction from our expanded retail presence to a local brand initiatives like our fifth anniversary event that we celebrated in Shanghai last October our brand is strong in China.

Dani Reiss: Early results have been promising. Our store net promoter score in Q3 improved meaningfully compared to the same period last year and on an already high base. And we saw a significant increase in the percentage of shoppers indicating that our in-store brand and product storytelling is positively impacting their perception of the brand. I'm excited about the long-term benefits of our focus on experience. I saw this firsthand at our stores while working at our Yorkdale store in Toronto over the Black Friday weekend, as did our entire leadership team as they worked in many of our other stores around the world. Now, turning to collaborations, which we leveraged to tap into new and diverse audiences. In the third quarter, we launched six, including BAPE, CONCEPT, OBEO, Viscusergen, PIRMAS, and with Masai Ujiri's Giants of Africa organization, which empowers and inspires African youth through basketball to make lasting change in their communities, work that is incredibly important to Canada.

Danny: As a result of our continued investment we saw both growth both inside and outside of mainland China.

Danny: We intend to continue managing our expansion in China prudently focusing on initiatives to elevate our brand and achieve optimal ROI.

Danny: North America and European sales grew robustly over the Black Friday shopping weekend. However, we believe the delayed onset in cold weather through December contributed to softer domestic demand for our heavyweight down product in Q3 dampening category sales in these regions.

Danny: Direct to consumer comparable sales, which include our brick and mortar and online stores were down one 6% year over year in Q3.

Danny: Store only comparable sales grew in the high single digits year on year, driven by strength in greater China offset by a decrease in store and E Commerce comp sales in North America, and EMEA, mainly due to lower conversion.

We believe that the highly promotional environment combined with continued pressure on consumer spend in the quarter contributed to challenges converting our digital traffic and to some extent our store traffic as well, especially outside of key holiday shopping moments.

Dani Reiss: Q3 collaboration delivered on our objectives to drive brand heat and reach new target audiences. As a result of our efforts, consumer engagement metrics and signups to our own database were above our year to date. Last week, our brand was featured in the most recent Vogue Business Index, an index of the world's leading luxury brands. We're pleased to see ourselves on the list again and to see our ranking improving year over year. Turn to our second pillar, building our DTC network. In Q3, we added two permanent stores, one in New Jersey's American Dream Mall and one in Kobe, Japan. We also converted our Fifth Avenue store in New York City to a permanent store, bringing us to 65 permanent stores at the end of the period.

Danny: As a result, the progress we've made on the merchandising front was largely offset.

Danny: Ahead of our Q3 peak season, and as part of our efficiency driving transformation program, we reorganize our merchandising group focusing on centralizing our team to improve merchandising inventory management globally across all channels and product categories.

Danny: This has enhanced assortment planning and driven improvements and localize assortments for our stores.

During Q3, we measured and improvement in both productivity and inventory turnover directly resulting from this initiative.

Dani Reiss: We also opened a permanent store in January in Nanjing, China, where we now have 22 permanent locations. And on the wholesale front, we expanded our travel retail province of Seoul, Korea, with a couple of pop-up locations following the opening of the Frankfurt Airport store in the second quarter. I'm very encouraged by all that we're learning in the early stages of this new channel, and we believe that this will help us reach a new clientele. Q3 DTC revenue increased by 14% over the last year, reaching $514 million, primarily driven by DTC performance in Asia-Pacific and, specifically, Greater China. The strength of our brand and product assortment, combined with healthy consumer spending during key shopping moments across greater China, contributed to the stronger online and offline sales in Q3 versus the previous year.

Danny: While the benefits we achieved were muted due to the external environment the improvement set us up to capture opportunities in the future.

Danny: In addition to continuing on our merchandising and sales planning efforts, we remain focused on enhancing our e-commerce business by reducing friction points for customers online on the front and on the budget through this work, we expect to see improvements in cart conversion and return rates, the latter of which we're making meaningful progress against and I look forward to continuing.

Danny: Update on the progress, we're making within our digital ecosystem.

Danny: And now turning to our third pillar product expansion.

Danny: In Q3 required knitwear manufacturer pallets infected with months of our first European manufacturers facility and supports our objective to drive growth in our apparel category.

Danny: Whereas one of our leading segments within apparel and we expect this acquisition will deepen our in house expertise and enhanced gross margins and supply control.

Dani Reiss: Our results demonstrate that our investment in China is gaining traction. From our expanding retail presence to our local brand initiatives, like our fifth anniversary event that we celebrated in Shanghai last October, our brand is strong in China. As a result of our continued investment, we saw growth both inside and outside Man Land China. We intend to continue managing our expansion in China prudently, focusing on initiatives that elevate our brand and achieve optimal ROI. North America and European sales grew robustly over the Black Friday shopping weekend. However, we believe that the late onset and cold weather through December contributed to softer domestic demand for our heavyweight down products in Q3, dampening category sales in these. Direct-to-consumer comparable sales, which include our brick-and-mortar and online stores, were down 1.6% year-over-year in Q3. Store-only comparable sales grew by the highest single digits year-on-year, driven by strength anywhere in China, offset by a decrease in store and e-commerce comp sales in North America and EMEA, mainly due to lower conversion.

Danny: We are a vertically integrated manufacturer. So this is familiar territory for US now in a new category that still play an important role in driving year round relevance for our brands.

Danny: In Q3, our non heavier way down category, which includes apparel expanded its share revenue within the overall product revenue mix compared to the same period last year.

Danny: Apparel is the fastest growing product within non heavy way down.

Danny: By double digits year over year in the U S, Canada, and EMEA EMEA and doubling in APAC with sales of women's apparel driving growth across all regions apparel has steadily gained share within the non heavy way down revenue mix over the past six quarters, we attribute the growth of non heavy way down revenue to a few factors first the Canada goose.

Danny: Increasingly resonating in the minds of consumers from products sold outside of cold weather here.

Danny: And second that the delayed onset of cold. This winter influenced the type of product consumer purchase later in the quarter.

Danny: Also continued to generated year over year sales growth in our core heavyweight down category, which include our iconic heritage styles as well as our new styles.

Dani Reiss: We believe that the highly promotional environment combined with continued pressure on consumer spend in the quarter contributed to challenges converting our digital traffic, and to some extent, our store traffic as well, especially outside of key holiday shopping moments. As a result, the progress we made on the merchandising front was largely offset ahead of our Q3 peak season. As part of our efficiency-driven transformation program, we reorganized our merchandising group, focusing on centralizing our team to improve merchandise and inventory management globally across all channels and product categories. This has enhanced assortment planning and driven improvements and localized assortments for our stores. During Q3, we measured an improvement in both productivity and inventory turnover directly resulting from this initiative.

Danny: Every way down sales were led by APAC and came in lower in both North America and EMEA.

Danny: The strength in APAC reflects both a quarter whether in greater China in Q3, as well as lapping the store closures last year relating to Covid restrictions.

Danny: In mainland China, Our expedition Park, one of our most iconic styles with our bestselling heavyweight down product, while the Shelburne and Macmillan Parkas were top sellers in the U S and EMEA.

In closing, while our topline results for Q3 were mixed in a challenging consumer environment. We are moving forward focused on performance and discipline across our operations, our brand and our product.

Danny: We remain very confident in our brand and our strategy.

Danny: Customers experienced Canada goose firsthand node, we deliver performance function quality and style and more than ever before customers are discovering a performance luxury offering beyond only cold weather products.

Danny: We are excited about this opportunity in the future and with even more consumers, where kennedy years year round.

Dani Reiss: While the benefits we achieved were muted due to the external environment, the improvements set us up to capture opportunities in the future. In addition to continuing our merchandising and sales planning efforts, we remain focused on enhancing our e-commerce business by reducing friction points for our customers online, on the front and on the back. Through this work, we expect to see improvements in cart conversion and return rates, the latter of which we're making meaningful progress on, and I look forward to continuing to share updates on the progress we make within our digital ecosystem. Now, I turn to our third pillar, product expansion. In Q3, we acquired knitwear manufacturer Paola Confec, which marks our first European manufacturing facility and supports our objective to drive growth in our apparel category.

Speaker Change: Before I hand, it over to Jonathan I would like to thank him for his leadership over the past five and a half years, Jonathan I'm looking forward to the contributions you will make in your new role as president of APAC as.

Speaker Change: As well I'd like to congratulate Barton, who will transition into the role of CFO in April.

Speaker Change: I'd also like to welcome Beth Schlemmer, our new President of Finance strategy and administration.

Speaker Change: Beth is very familiar with our brand our strategy and our people have worked closely with us through our IPO and I'm very happy to have her on board I plan to work closely with Beth as I do with Gary and I look forward to staying very close to the commercial financial and operational areas of the business and at the same time spending more time focused on our product and.

Speaker Change: Our brand leading into the critical drivers are the foundation of our success.

Speaker Change: Beth I will now pass it to you to say a few words.

Beth Schlemmer: Thank you for the warm welcome Danny and good morning.

Beth Schlemmer: I'm currently in the midst of my first month here at Canada, Goose, and I'm getting up to speed on all aspects of the company. The candidates team and business isn't new to me I worked closely with the company from 2015 to 2019 I wanted to give you all a sense of what to expect for me as I step into that role.

Dani Reiss: NetWare is one of our leading segments within apparel, and we expect this acquisition will deepen our in-house expertise and enhance gross margins and supply control. We are a vertically integrated manufacturer, so this is familiar territory for us.

Beth Schlemmer: First and foremost I'm spending my Onboarding time learning from the front lines of our business spending time in our stores and in our manufacturing facilities.

Dani Reiss: Now in a new category that will play an important role in driving year-round relevance for, In Q3, our non-heavyweight downs category, which includes apparel, expanded its share of revenue within the overall product revenue mix compared to the same period last year. Apparel is the fastest growing product within non-heavyweight down, increasing by double digits year over year in the U.S., Canada, and EMEA and doubling in APAC, with sales of women's apparel driving growth across all regions. Apparel has steadily gained share within the non heavyweight down revenue mix over the past six quarters.

Beth Schlemmer: I've spent much of my career in retail businesses and I'm a huge believer of how much you can learn from both our customers and our operations from seeing the front lines.

Beth Schlemmer: Second I'm diving deep into that priority, if the kpis the financials of the business.

Beth Schlemmer: Really data driven person and that's work helps both me and the leadership team and sure. We've got our arms around the strength of our business as well as our areas of opportunity. So we can pursue them with Argentina.

I look forward to partnering closely with Danny Carey meal in the rest of the leadership team to effectively chart. The course for our next phase of growth and margin expansion. We have a tremendous amount of opportunity ahead of us and I'm excited to support our journey towards becoming a leading luxury and lifestyle brands and with that I'll hand, it back to Dani.

Dani Reiss: We attribute the growth of non-heavyweight down revenue to a few factors. First, the Canada Goose is increasingly responding in the minds of consumers for products sold outside of cold weather years, and second, that the delayed onset of cold this winter influenced the type of product consumers purchased later in the quarter. We also continue to generate year-over-year sales growth in our core heavyweight down category, which includes our iconic heritage styles as well as our new styles. Heavyweight down sales were led by APAC and came in lower in both North America and Armenia.

Danny: Thanks, Beth and with that I will turn it over to Jonathan.

Jonathan Sinclair: Thank you Danny and good morning, everyone.

Jonathan Sinclair: Third quarter results reflected our continued attention to operational performance and cost discipline, which drove top and bottom line growth in the context of a dynamic and challenging operating environment.

Jonathan Sinclair: Revenue in our third quarter with $609 9 million.

Jonathan Sinclair: Up around 6% year over year or 5% on a constant currency basis.

DTC sales of $514 million grew 14% on both a reported and constant currency basis over the same period last year.

Dani Reiss: The strength of the APAC reflects both the colder weather in Greater China and Q3, as well as lapping the store closures last year relating to COVID restrictions. In Mainland China, our Expedition Parka, one of our most iconic styles, was our best-selling heavyweight down product, while the Shelburne and McMillan Parkas were top sellers in the U.S. and Asia. In closing, while our top-line results for Q3 were mixed in a challenging consumer environment, we are moving forward, focused on performance and discipline across our operations, our brand, and our product. We remain very confident in our brand and our strategy. Customers that experience Canada Goose firsthand know that we deliver performance, function, quality, and style, and more than ever before, customers are discovering our performance luxury offering beyond our only cold weather product.

Jonathan Sinclair: This was driven by brick and mortar sales are backed by shopping during key consumer moments, both online and in person.

Jonathan Sinclair: We continue to shift our revenue mix intentionally to a more profitable DTC segment, which represented 84% of total revenue in Q3 up from 78% to Europe.

Jonathan Sinclair: Q3 wholesale revenue of $81 8 million was.

Jonathan Sinclair: It was 28% down year over year or 30% down on a constant currency basis, primarily due to a planned lower order book, resulting from lower orders from existing customers compared to the same period last year and the ongoing streamlining of our wholesale accounts.

Jonathan Sinclair: We also estimate at higher returns from our wholesale partners in Q3, as we proactively manage our inventory.

Jonathan Sinclair: Our focus remains on keeping wholesale as a brand accretive channel. This means partnering with key opinion leaders.

Dani Reiss: We are excited about this opportunity for a future in which even more consumers work hand-in-ears year-round. Before I hand it over to Jonathan, I'd like to thank him for his leadership over the past five and a half years. Jonathan, I'm looking forward to the contributions you will make in your new role as President of AAPI. As well, I'd like to congratulate Neil Bowden, who will transition into the role of CFO in April. I'd also like to welcome Beth Clymer, our new president of finance, strategy, and administration. Beth is very familiar with our brand, our strategy, and our people have been working closely with us through our IPO. And I'm very happy to have her on board.

Jonathan Sinclair: To reach our target customers and rationing inventory in the channel to keep it as healthy as we can which is particularly important in a promotional environment.

Jonathan Sinclair: Q3 revenue in our other segment.

Jonathan Sinclair: A $14 1 million increased by 17% year over year on a reported and constant currency basis.

Jonathan Sinclair: And that was principally due to the incremental revenue contributed by our recently acquired manufacturer Palo contracted.

Jonathan Sinclair: Moving to performance by geography, Q3 revenue increased in Asia Pacific year over year, while declining in North America and in EMEA.

Beth Clymer: I plan to work closely with Beth, as I do with Carrie, and I look forward to staying very close to the commercial, financial, and operational areas of the business. And, at the same time, spending more time focused on our product and our brand, leading into the critical drivers that are the foundations of our success. I will now pass it to you to say a few words. Thank you for the warm welcome, Dani. Good morning.

Revenues from Asia Pacific grew 62% year over year to $277 million or 63% on a constant currency basis.

Jonathan Sinclair: Mainland China was a standout in terms of strong performance across all channels.

Jonathan Sinclair: Store traffic more than doubled year over year as the lifting of Covid restrictions resulted in a strong rebound in domestic spending.

Beth Clymer: I'm currently in the midst of my first month here at Canada Goose, and I'm getting up to speed on all aspects of the company. The Canada Goose team and business aren't new to me. I worked closely with the company from 2015 to 2019, and I wanted to give you all a sense of what to expect from me as I step into the role. First and foremost, I'm spending my onboarding time learning from the frontlines of our business, spending time in our stores and in our manufacturing facilities. I've spent much of my career in retail businesses, and I'm a huge believer in how much you can learn from both our customers and our operations from seeing the front lines. Second, I'm diving deep into the priorities, the KPIs, and the financials of the business.

Jonathan Sinclair: Our stores in Hong Kong, and Macau continue to benefit from mainland Chinese tourism.

<unk>, Taiwan witnessed solid local demand.

Jonathan Sinclair: Sales for our core heavyweight down products in the region rose significantly coinciding with the colder weather.

Jonathan Sinclair: In December.

Jonathan Sinclair: Within non heavyweight down apparel and footwear with distinct outperformance doubling in revenue year on year.

Jonathan Sinclair: Turning to North America revenue of $252 4 million was down 14% or 15% on a constant currency basis, reflecting a year over year decrease in DTC and wholesale revenues in both the U S and in Canada.

Beth Clymer: I'm a really data-driven person, and this work helps both me and the leadership team ensure we've got our arms around the strengths of our business as well as our areas of opportunity so we can pursue them with urgency. I look forward to partnering closely with Dani, Carrie, Neal, and the rest of the leadership team to effectively chart the course for our next phase of growth and margin expansion. We have a tremendous amount of opportunity ahead of us, and I'm excited to support our journey towards becoming a leading luxury and lifestyle brand. With that, I'll hand it back to Dani.

Jonathan Sinclair: U S. DTC revenue was down year over year as lower E. Commerce revenue was partially offset by higher store sales, which was driven by contribution from new stores.

Jonathan Sinclair: Warmer December fulfillment all consumers preferred are known heavyweight down offerings with healthy category growth, partially offsetting the year over year decrease in heavyweight down sales in this geography.

Jonathan Sinclair: Thanks, Beth. And with that, I will turn it over to Dani. Thank you, Dani, and good morning. Our third quarter results reflected our continued attention to operational performance and cost assessment, which drove top and bottom line growth in the context of a dynamic and challenging operating environment. Revenue in our third quarter was $609.9 million, up around 6% year over year or 5% on a constant currency basis. DTC sales of $514 million grew 14% on both a reported and constant currency basis over the same period last year.

Jonathan Sinclair: DTC revenues in Canada were also lower year over year as both store and E Commerce revenues came under pressure.

Jonathan Sinclair: Lastly.

Jonathan Sinclair: EMEA revenue was down 26% year over year to $86 $8 million.

Jonathan Sinclair: 27% down on a constant currency basis.

Jonathan Sinclair: This was largely driven by lower wholesale revenue, but also pressured by softer DTC performance.

Apparel was a standout performer with an increased share of revenue within the product mix.

Turning to gross profit.

Jonathan Sinclair: Our third quarter gross profit grew 8% year over year to $449 $7 million.

Jonathan Sinclair: This was driven by brick and mortar sales and backed by shopping during key consumer moments, both online and in person. We continued to shift our revenue mix intentionally to our more profitable DTC segment, which represented 84% of total revenue in Q3, up from 78% a year ago. Q3 wholesale revenue of $81.8 million was 28% down year over year, or 30% down on a constant currency basis, primarily due to a planned lower order book resulting from lower orders from existing customers compared to the same period last year and the ongoing streamlining of our wholesaler.

Jonathan Sinclair: That outpaced revenue growth and was driven by higher revenues and of course margin expansion.

Jonathan Sinclair: Q3, gross margin expanded 150 basis points to 73, 7%, primarily due to pricing and partially offset by higher product costs.

Jonathan Sinclair: Q3, gross margin and DCC was 78, 5% in Q3 up 50 basis points, while wholesale gross margins rose to 53, 4% up 40 basis points each compared to the same period last year.

Jonathan Sinclair: Gross margin in the DTC segment was higher due to pricing, partially offset by higher inventory provisioning and freight costs wholesale margin was up primarily due to pricing with the euro strengthening relative to the Canadian dollar and that was partially offset by higher.

Jonathan Sinclair: We also estimated higher returns from our wholesale partners in Q3 as we proactively manage our inventory. Our focus remains on keeping wholesale as a brand accretive champion. This means partnering with key opinion leaders that help reach our target customers and rationing inventory in the channel to keep it as healthy as we can, which is particularly important in a promotional environment. Q3 revenue in our other segment, of $14.1 million, increased by 17% year over year on a reported and constant currency basis.

Jonathan Sinclair: <unk> III provisioning.

Jonathan Sinclair: Costs.

Jonathan Sinclair: Adjusted EBIT was $207 2 million.

Jonathan Sinclair: Up from $197 1 million in Q3 of last year and that was due to the higher gross profit, partially offset by higher SG&A spend.

Jonathan Sinclair: The increase in SG&A spend was primarily due to the costs associated with the expansion of our retail network as we invest in the right locations and the right people to help drive long term growth.

Jonathan Sinclair: That was principally due to the incremental revenue contributed by our recently acquired manufacturer, Paolo Confecta. Moving to performance by geography, Q3 revenue increased in Asia Pacific year over year while declining in North America and EMEA. Revenues from Asia-Pacific grew 62% year-over-year to $270.7 million, or 63% on a constant currency basis. Mainland China was a standout in terms of strong performance across all China.

Jonathan Sinclair: While SG&A costs related to our transformation program are excluded from adjusted EBIT. We do expect this expense to largely conclude in Q4 as.

Jonathan Sinclair: As we wind down.

Jonathan Sinclair: Consulting engagements.

Jonathan Sinclair: Adjusted net income attributable to shareholders was $138 6 million or $1 37.

Jonathan Sinclair: Diluted share.

Jonathan Sinclair: Turning to our balance sheet. We ended the third quarter of fiscal 2004 with inventory of $478 $4 million, which was relatively flat year over year and that's after slowing year over year inventory growth for the previous two consecutive quarters.

Jonathan Sinclair: Store traffic more than doubled year over year as the lifting of Covid restrictions resulted in a strong rebound in domestic sales. Our stores in Hong Kong and Macau continue to benefit from mainland Chinese tourism, whilst Taiwan witnessed solid local democracy. Sales for our core heavyweight down product rose significantly, coinciding with the colder weather that arrived in December. Within non-heavyweight down, apparel and footwear were distinct to help performance, doubling in revenue year-on-year. Turning to North America, revenue of $252.4 million was down 14%, or 15% on a constant currency basis, reflecting a year-over-year decrease in DTC and wholesale revenues in both the US and Canada. US DTC revenue was down year-over-year as lower e-commerce revenue was partially offset by higher store sales, which was driven by a contribution from New... A warmer December also meant our consumers preferred our non-heavyweight down offerings, with healthy category growth partially offsetting the year-over-year decrease in heavyweight down sales in this job. BTC revenues in Canada were also lower year-over-year as both store and e-commerce revenues came under EMEA revenue was down 26% year-over-year to 86.8 million dollars, or 27% lower on a constant currency value.

Jonathan Sinclair: We.

Jonathan Sinclair: <unk> to focus on optimizing inventory productivity.

Jonathan Sinclair: Closely monitoring demand and supply levels in each of our sales channels and in each of our geographies.

Jonathan Sinclair: In Q3, we also bought back around three 6 million shares for a total cash consideration of $56 $6 million.

Jonathan Sinclair: We ended the quarter with 587 4 million of net debt on our balance sheet compared to $419 2 million at the end of the third quarter of fiscal 2023 and that includes the value of our leases.

Jonathan Sinclair: Q3, net debt decreased from Q2 due to cash generation from operations. In addition, we repaid all amounts are in.

Jonathan Sinclair: Our revolving credit facility.

Jonathan Sinclair: December 31st.

Jonathan Sinclair: In turn our net debt leverage reduced to one times adjusted EBITDA at the end of Q3 compared to three three times at the end of Q2.

Jonathan Sinclair: At December 31, we had completed the repurchase of the entire amount authorized under our fiscal 'twenty three normal course issuer bid program and that amounted to $5 4 million shares for a total cash consideration of $111 2 million.

Jonathan Sinclair: Although this was largely driven by lower wholesale revenue but also pressured by softer DTC, Harold was a standout performer with an increased share of revenue within the product. Turning to Gross Profits. Our third quarter gross profit grew 8% year-over-year to $449.7 million. That outpaced revenue growth and was driven by higher revenues and, of course, margin expansion, to three gross margin expanded 150 basis points, 73.7%, primarily due to pricing and partially offset by higher product. DTC gross margin in Q3 was 78.5%, up 50% basically, while wholesale gross margins rose to 53.4%, up 40 basis points, each Gross margin in the DTC segment was higher due to pricing partially offset by higher inventory provision, and Frake. Wholesale margin was up primarily due to pricing with the euro strengthening relative to the Canadian dollar, and that was partially offset by higher inventory provision. Cool.

Jonathan Sinclair: <unk>.

Jonathan Sinclair: Further we renewed in CIB in November reflecting share buybacks as a component of our capital allocation strategy.

Jonathan Sinclair: During the third quarter, we advanced our transformation program with a heavy focus on merchandising and planning stream as Danny described earlier.

Jonathan Sinclair: We expect our work in this area to support improved inventory turnover and margin expansion at our stores globally.

Impact of which we anticipate will become more apparent over the coming quarters.

Jonathan Sinclair: We remain on track to meet an estimated annual savings run rate of approximately 15% of our $150 million target this fiscal year.

Jonathan Sinclair: Targeting more or less.

Jonathan Sinclair: Now turning to our outlook.

Jonathan Sinclair: Year to date, we have progressed initiatives across our strategic pillars investing in our brand expanding our DTC presence in key markets and increasing demand for our emerging product lines, while growing our core heavy weight down category.

Jonathan Sinclair: Adjusted EBIT is $207.2 million, up from $197.1 million in Q3 of last year, and that was due to higher gross profit partially offset by higher SG&A spend. The increase in SG&A spend was primarily due to the costs associated with the expansion of our retail network, as we invest in the right locations and the right people to help drive long-term growth. While SG&A costs related to our transformation programme are excluded from adjusted EBIT, we do expect this expense to largely conclude as we wind down our consulting engagement. Adjusted net income attributable to shareholders was $138.6 million, or $1.37 per diluted share.

Jonathan Sinclair: And while we're still in the early days of implementation of our transformation program, we are realizing efficiencies sooner than we expected.

Jonathan Sinclair: The mixed consumer environment has proved more of a headwind compared to the benefits we're seeing.

Jonathan Sinclair: The traction we saw in Asia Pacific in Q3 was very promising.

In January North America, and Europe started to turn a corner with DTC performance moving back into positive growth territory. Once again, coinciding with the onset of colder weather in each region.

Jonathan Sinclair: As lunar new year is later this year and given that our comparative performance was stronger last year.

Jonathan Sinclair: Turning to our balance sheet, we ended the third quarter of fiscal 24 with inventory of $478.4 million, which was relatively flat year-over-year, and that's after slowing year-over-year inventory for the previous two consecutive quarters. We continue to focus on optimizing inventory productivity, closely monitoring demand and supply levels in each of our sales channels and in each of our job groups. In Q3, we also bought back around $3.6 million, for a total cash consideration of $56.6 million. We ended the quarter with $587.4 million of net debt on our balance sheet compared to $419.2 million at the end of the third quarter of fiscal 2023, and that includes the value of our lease.

Jonathan Sinclair: Our Asia Pacific business did not experience a comparable environment in January and therefore, our business was somewhat slower.

Jonathan Sinclair: Against this backdrop our guidance for the fourth quarter is as follows.

Jonathan Sinclair: We expect total revenue between 310 and $330 million.

Jonathan Sinclair: Non <unk> adjusted EBIT.

Jonathan Sinclair: Between 14 and $27 million.

Jonathan Sinclair: And non <unk> adjusted net income per diluted share between two and 13 cents.

Jonathan Sinclair: As such our fiscal 'twenty four outlook is as follows.

We expect total revenue between 128 5 billion and 130 $5 billion for the full year.

Jonathan Sinclair: We continue to assume DTC revenue to be around 70% of total revenue.

<unk> represents a low single digit decrease to a low single digit increase in year over year, DTC comparable sales growth versus last year.

Jonathan Sinclair: Q3 net debt decreased from Q2 due to cash generation from our operations. In addition, we repaid all amounts owing on our revolving credit facility as at December 31st. As a result, our net debt leverage was 2.1 times adjusted EVTA at the end of Q3, compared to 3.3 times at the end of Q2.

Jonathan Sinclair: It also reflects continued store expansion.

Jonathan Sinclair: We plan to open three new permanent stores in Q4, bringing our total permanent store count to 68 at the end of the fiscal year.

Jonathan Sinclair: At December 31, we had completed the repurchase of the entire amount authorized under our fiscal 23 normal course issuer bid program, and that amounted to 5.4 million shares for a total cash consideration of $111.2 million. In addition, we renewed our NCIB in November, reflecting share buybacks as a component of our capital allocation strategy. During the third quarter, we advanced our transformation program with a heavy focus on our merchandising and planning stream, as Dani described earlier. We expect our work in this area to support improved inventory turnover and margin expansion at our stores globally, the impact of which we anticipate will become more apparent over the coming four years. We remain on track to meet an estimated annual savings run rate of approximately 15% of our $150 million target this fiscal year, and we're targeting more than this. Now turning to our... Year to date, we have progressed initiatives across our strategic pillars, investing in our brand, expanding our DTC And while we're still in the early days of implementation of our transformation program, we are realizing efficiencies sooner than we expect.

Jonathan Sinclair: We also expect wholesale revenue to decrease year over year by a high teens percentage, reflecting the continued exiting of a wholesale door count returns from our wholesale partners revised reorder expectations and the impact of our retail store network.

Jonathan Sinclair: We expect non <unk> adjusted EBIT.

Jonathan Sinclair: 146 from $158 million in fiscal 2024, representing an operating margin between 11 and 12%.

Jonathan Sinclair: This assumes the gross margin percentage to be in the high sixes on a full year basis with DTC and wholesale gross margin in the mid seventies and the low fifty's respectively.

Jonathan Sinclair: We continue to expect SG&A expense to grow at a mid teens percentage rate year over year.

Jonathan Sinclair: Due to the larger DTC network and its associated operating cost base moderated by cost savings initiatives, including around $15 million in savings from the transformation program in fiscal 2024.

Jonathan Sinclair: And lastly, we expect non <unk> adjusted net income per diluted share to be between 82 and 92 sentence.

Jonathan Sinclair: The mixed consumer environment has proved more of a headwind compared to the benefits we're seeing, although the traction we saw in Asia-Pacific in Q3 was very promising. In January, North America and Europe started to turn a corner, with DTC performance moving back into positive growth territory, once again coinciding with the onset of colder weather in each region. As the Lunar New Year is lighter, and given that our comparative performance was stronger, our Asia-Pacific business did not experience a comparable environment in January, and therefore, our business was somewhat slower.

Jonathan Sinclair: This assumes an effective tax rate in the high teens as a percentage of net income before taxes and weighted average diluted shares outstanding of 101 7 million units.

Jonathan Sinclair: Fiscal 2024.

Jonathan Sinclair: In closing our.

Jonathan Sinclair: Our performance in Q3 showcased the strength of our brand in a challenging consumer environment.

Jonathan Sinclair: We have advanced our strategic priorities and are focused on unlocking further opportunities across our global retail network.

Jonathan Sinclair: We're confident in our runway for growth as we seek to deliver a unique value proposition as a performance luxury lifestyle brand.

Jonathan Sinclair: Against this backdrop, our guidance for the fourth quarter is as follows. We expect total revenue between $310 and $330 million, non-IFRS adjusted EBIT of between $14 and $27 million, and non-IFRS adjusted net income per diluted share between $0.02 and $0.13. As such, our fiscal 24 outlook is as follows. We expect total revenue between $1.285 billion and $1.305 billion for the full year.

Jonathan Sinclair: Across our entire distribution network to our customers around the world.

Speaker Change: Lastly, I would like to take this opportunity to thank Danny for the privilege of serving as CFO for the last five and a half years.

Danny: As this is my last earnings call as CFO prior to moving to head of Asia Pacific in April.

Danny: I would like to welcome Neal to this role of CFO.

Danny: He is highly talented and extremely knowledgeable about the business I am confident he will be in good hands.

Jonathan Sinclair: We continue to assume DTC revenue to be around 70% of total revenue, which represents a low single-digit decrease to a low single-digit increase in year-over-year DTC comparable sales growth versus loss. It also reflects continued store expansion. We plan to open three new permanent stores in Q4, bringing our total permanent store count to 68 at the end of the fiscal year. We also expect wholesale revenue to decrease year-over-year by a high teens percentage, reflecting the continued improvement of our wholesale door returns from our wholesale partners, revised reorder expectations, and the impact of our retail store.

Danny: And with that operator please.

Speaker Change: Please open up the line questions.

Speaker Change: Yeah.

Speaker Change: At this time I would like to remind everyone in order to ask a question Press Star then the number one on your telephone keypad.

Speaker Change: Pause for just a moment to compile the Q&A roster.

Speaker Change: Our first question comes from the line of Oliver Chen with T. D. Cohen Your line is open.

Oliver Chen: Hi, Thank you very much in the prepared remarks, you mentioned that conversion rates something youre watching if you could speak to what's happening there and if it if it improved in January as well.

Jonathan Sinclair: We expect non-IFRS adjusted EBIT of between $146 and $158 million in fiscal 2024, representing an operating margin of between 11 and 12 percent. This assumes the gross margin percentage to be in the high 60s on a full year basis, with DTC and wholesale gross margin in the mid-70s and the low 50s, respectively. We continue to expect SG&A expense to grow at a mid-teens percentage rate year over year due to the larger DTC network and its associated operating costs, moderated by the Cost Savings Initiative, including around 15 million dollars in savings from the transformation program in fiscal 2020, and lastly, we expect non-IFRS adjusted net income per diluted share to be between 82 and 92 cents. This assumes an effective tap, in the high teens as a percentage of net income before tax, and Weighted Average Diluted Shares Outstanding of 101.7 million units for Fiscal 2024.

Oliver Chen: Also our localized assortments I felt like a big opportunity where are you in that journey in terms of where that can go over time and finally I know you said, some really really nice momentum in Asia Pacific The compares get a little tougher.

Oliver Chen: How are you thinking about how traffic in and volatility may evolve on that on the toughening comparisons. Thank you very much.

Oliver Chen: Thanks, Oliver it's Gary here.

Gary: So first question on conversion rate. So, yes, we even heard us talk about the pressure specifically in North America and EMEA on conversion strong traffic both in store and online where we saw the pressure was just consumers feeling that pinch.

Speaker Change: Hence a little less.

Speaker Change: And then just I guess what their wallets.

Given a couple of things one weather didn't help in terms of winter just didn't just didn't come for them and so they didn't have that same sort of spur to get their typical winter jackets second one was just a highly promotional environment. So whether it was outerwear as a category just in general there was a lot more choice at the lower price point.

Jonathan Sinclair: In closing, our performance in Q3 showcased the strength of our brand in a challenging consumer environment. We have advanced our strategic priorities and are focused on unlocking further opportunities across our global retail network. We're confident in our runway for growth as we seek to deliver our unique value proposition, as a performance luxury life, across our entire distribution network to our customers around the world. Lastly, I would like to take this opportunity to thank Dani for the privilege of serving as CFO for the last five and a half years. As this is my last earnings call as CFO, prior to moving to head up Asia-Pacific in April, I would like to welcome Neil to this role as CFO. He's highly talented and extremely knowledgeable about the business. I'm confident you'll be in good health.

Speaker Change: Clients, particularly in the wholesale market, where that channel is healing interest as well.

Speaker Change: But and then.

Speaker Change: In terms of whether it's improved.

Speaker Change: Improved in January yet, so, we're making just to think to the first quarter well yet.

Speaker Change: Yes.

Speaker Change: Improvements in terms of the backlight backend as well as the front end to just make sure it's easy for them to find the product they need.

Speaker Change: Reduce any friction the whole process you heard Joe.

Joe: Can you talk about the returns we have opportunities on.

Joe: And so that's where our focus is going on and we did see that upgrades in January so as Jonathan spoke to the colder weather that appeared in the first couple of weeks really did help them do that.

Joe: Urgency with their consumer spending we saw that change significantly.

Speaker Change: Second question, you talked about localized assortment and where can that go we see lots of opportunity on that of course, there's a brand you know as long as we do you want them to just showing up consistently around.

Operator: And with that, Operator, please open up the line. At this time, I would like to remind everyone in order to ask a question, press star for number one on your telephone keypad. We'll pause for just a moment to compile the Q&A. Our first question comes from the line of Oliver Chen, of New Orleans. Hi. Thank you very much.

Speaker Change: Around the world want to shell what candidates can offer.

Speaker Change: But there we recognize any of that one consumer in China is not the same consumers in Toronto and and then in Europe, and so we want to make sure that there is.

That meets their needs at the right time, whether it's seasonality, whether we know something about that consumer and they use it in a different way and so we've got meaningful work has been under.

Speaker Change: In the works on that already and we think there's lots of opportunity to still continue to do that.

Carrie Baker: In the prepared remarks, you mentioned that conversion rates are something you're watching. Could you speak to what's happening there and if it improved in January as well? Also, localized assortments feel like a big opportunity. Where are you on that journey in terms of where that can go over time? And finally, you've seen some really, really nice momentum in Asia-Pacific. But the comparisons get a little tougher. How are you thinking about how traffic and volatility may evolve in the toughening comparisons? Thank you very much. Thanks, Oliver. It's Carrie here.

Speaker Change: The last question or actually I will turn it over to Jonathan to talk about APAC in his new role.

Jonathan Sinclair: Thanks, Gary.

Jonathan Sinclair: So in the third quarter 12 pack it took a little bit more.

Jonathan Sinclair: Hong Kong Macau.

Jonathan Sinclair: The growth in Asia Pacific.

Jonathan Sinclair: Driven by increased traffic.

Jonathan Sinclair: Particularly for mainland China mainland China consumers.

Jonathan Sinclair: Mainland China growth followed.

Jonathan Sinclair: It was extremely positive throughout the quarter and then Japan.

Jonathan Sinclair: We had a significant uptick in traffic across grades in China. Obviously, we didn't have the COVID-19 restrictions that we had a year ago.

Jonathan Sinclair: At the same time, we actually saw store traffic doubled in mainland China and in that timeframe.

Carrie Baker: So first question on conversion rates. So yes, you heard us talk about the pressure specifically in North America and EMEA on conversion, strong traffic, both in-store and online, where we saw the pressure was just, you know, consumers feeling that pinch, a little less loose, I guess, with their wallets, given a couple of things. One, weather didn't help in terms of, you know, winter just didn't, just didn't come And so they didn't have that same sort of spur to get their typical winter jackets.

Jonathan Sinclair: With <unk> focus on that because because we see the mainland China performance is a proof point strengths of the brand.

Jonathan Sinclair: And.

Jonathan Sinclair: Obviously, we executed.

Jonathan Sinclair: All of that increased demand.

Jonathan Sinclair: Making sure that we place the right inventory in the right locations throughout the week.

Jonathan Sinclair: The retail environment seizing government entity.

Jonathan Sinclair: During key consumer and on that note.

Carrie Baker: The second one was just a highly promotional environment. So, whether it was outerwear as a category, just in general, there was a lot more choice at lower price points, particularly in the wholesale market, where that channel was feeling pinched as well. But, and then, in terms of whether it's improved in January, yes. So we're making, just to speak to the first quarter, He did major improvements in terms of the back end as well as the front end to just make sure it's easy for them to find the product they need, reduce any friction in the whole process. You heard Dani talk about returns we have opportunities on, and so that's where our focus has gone. And we did see that improvement in January. So, as Jonathan spoke to, the colder weather that appeared in the first couple of weeks really did help.

Jonathan Sinclair: We achieved a record Singles' day.

Jonathan Sinclair: In mainland China.

Outpace the rate.

Jonathan Sinclair: The growth rates of peers.

Jonathan Sinclair: In luxury outerwear or table.

Jonathan Sinclair: Now that said and we've talked about this before China has not been immune to the Softbank credit that we've seen.

Jonathan Sinclair: Globally, but we remain very focused on the strat.

Jonathan Sinclair: Strategy to make sure that we're capturing.

Jonathan Sinclair: Okay.

Jonathan Sinclair: They all the available opportunities.

Jonathan Sinclair: Turning to what's happened since the end.

Jonathan Sinclair: We do face tougher problems in China right.

Jonathan Sinclair: In Asia Pacific.

Jonathan Sinclair: A couple of reasons for that.

Jonathan Sinclair: Last year.

Jonathan Sinclair: The surgeons.

Jonathan Sinclair: Surgeons ophthalmology.

Jonathan Sinclair: It's happened in between the tenant being held together in lunar new year, which was more or less speaking a three week period.

Carrie Baker: And so that urgency was there; consumer spending; we saw that change significantly. Thank you. Second question: you talked about localized assortment and where that can go. We see lots of opportunity for this. Of course, as a brand, you know, as well as we do, you want to be showing up consistently around the world. We want to show what Canada Goose can offer. But we recognize the need that one consumer in China is not the same consumer as in Toronto and as in Europe. And so we want to make sure that there is a product that meets their needs at the right time, whether it's seasonality, whether we know that something about that consumer; they use it in a different way.

Jonathan Sinclair: Tracy Scott right.

Jonathan Sinclair: And so that had an impact and of course. This year. This is a six week period.

Jonathan Sinclair: During which we can build a business it might be China. So.

Jonathan Sinclair: As we as we go to read that is to say, it's still quite comparable in terms of empowerment.

Very pleased with the movement, we're continuing to see.

Speaker Change: Thank you best regards.

Speaker Change: Okay.

Speaker Change: Okay Alright.

Speaker Change: Our next question comes from Brooke Roach of Goldman Sachs. Your line is open.

Brooke Roach: Good morning, and thank you for taking our question I wanted to follow up on the China discussion now, though is cycled the one year Mark on China Covid disruptions can you discuss the per store average productivity and profitability that you're seeing in the region today and how that compares to the per store productivity and profitability that you are.

Carrie Baker: And so meaningful work has been under way on that already, and we think there's lots of opportunity to continue to do that. Last question, I will actually turn it over to Jonathan to talk about AIPAC and its new role. So, in the third quarter, to unpack this a little bit more, Hong Kong and Macau led the growth in Asia-Pacific, driven by increased travel, particularly from mainland China consumers. Mainland China growth followed and was extremely positive throughout the quarter, and then Japan. We've had a significant uptick in traffic across Great China. Obviously, we didn't have the COVID restrictions that we had a year ago that were in place at the same time.

Brooke Roach: We're seeing in your North America, DTC business, and then perhaps for Jonathan.

Brooke Roach: As you think about bridging the gap from adjusted EBIT margins in the low double digit range to a multiyear cadence of recovery can you speak a little bit more about the factors in your control that you think are achievable over the course of the next 12 months. Thank you.

Speaker Change: Okay, So I'm going to take.

Speaker Change: That question and it's two parts so let's let's talk.

Talk a bit about China.

Speaker Change: In this in this business sales densities and our.

Jonathan Sinclair: But we actually saw store traffic double in mainland China in that time frame. We're particularly focused on that because we see the Men in China performance as a proof point of strength on the ground. And, obviously, we executed on that increased demand by making sure that we placed the right inventory in the right locations throughout the retail moment, seizing on the opportunity during key consumer moments. And on that note, we achieved a record single-day sales performance in Mainland China and outpaced the growth rates of peers in Luxury Outwear on Tmall. Now, that said, and we've talked about this before, China has not been immune to the soft macro, globally, but we remain very focused on them, a strategy to make sure that we're capturing all the available opportunities, turning to what's happened since the end. We do face topical challenges in Asia Pacific. There are a couple of reasons for that.

Speaker Change: Margins.

Speaker Change: In Asia Pacific in General.

Speaker Change: Pretty robust.

Speaker Change: They sit at the higher end of the range that we enjoy and of course every every region has its own ranges. If you look at the average of what we experienced in <unk>.

Speaker Change: Asia Pacific specifically mainland China actually we see good levels of revenue productivity on good levels of volatile. So we're very encouraged by that we expected we expected to see that but of course it is.

Speaker Change: Right going through really the first quite normal period trading.

Speaker Change: First a good a good period of time.

Speaker Change: So that gives us a lot of encouragement as to both the current performance.

Speaker Change: But also the potential draw performance in Asia Pacific generally.

Speaker Change: Okay.

Speaker Change: I think when it comes to adjusted EBIT.

Speaker Change: Think about the opportunity for growth I think.

Speaker Change: I leaned heavily on what we've been talking about in the transformation program.

Jonathan Sinclair: Last year, the resurgence of demand happened between the turn of the calendar year and the Lunar New Year, more or less speaking for a three-week period, all concentrated in January, and so that had one impact. And, of course, this year, there's a six-week period during which we can build our business. So, as we go to read that business, it's not quite comparable in terms of the environment, but we're very pleased with the momentum. Thank you. Best regards. The Ultimate Parody Site!

Speaker Change: You've already heard Dani describes some of the what the wind told US this quarter and we see that as I said in my prepared remarks, the benefits of that accruing <unk>.

Speaker Change: Progressive had the time, but I'd remind you that it's something that is switching comprehensive in its approach, but it's multi stream.

Speaker Change: Our multi year, but we don't see that something that we have to wait.

Speaker Change: For five years before we see any benefit from say for example, when we think about that section at the.

Speaker Change: Oh pricing level, we think about marketing, what we think about technology or we think about the store program with procurement.

Speaker Change: And the supply chain.

Operator: Okay, thank you. Our next question comes from Brooke Roach of Goldman Sachs. Your line is, Good morning, and thank you for taking our question.

Speaker Change: We see opportunity in each and every one of them and we are organized behind those streams to really drive benefit.

Speaker Change: So we've always said it well.

Carrie Baker: I wanted to follow up on the China discussion. Now that we've cycled the one year mark on China's COVID disruptions, can you discuss the per store average productivity and profitability that you're seeing in the region today? And how that compares to the per store productivity and profitability that you are seeing in your North America DTC business? And then, perhaps for Jonathan, as you think about bridging the gap from adjusted margins in a low double-digit range to a multi-year cadence of recovery, can you speak a little bit more about the factors in your control that you think are achievable over the course of the next 12 months? Okay, so I'm going to take that question in its two parts. So let's talk a bit about China first. In this business, our sales densities and our margins in Asia-Pacific, in general, are pretty robust. They sit at the higher end of the range that we enjoy, and, of course, every region has its own unique ranges.

Speaker Change: We will accumulate over time.

Speaker Change: We are already at the point, where we've got.

Speaker Change: Hum.

Speaker Change: Sorry, 15 centers the benefit in the run rate come installed next year, and we're targeting more than that.

Speaker Change: Great. Thank you so much I'll pass it on.

Speaker Change: Thank you. Our next question comes from the line of Rick Patel with Raymond James Your line is open.

Speaker Change: Yeah.

Rick Patel: Thank you and good morning, everyone. Two questions from me first on Europe, I'm, hoping you can unpack the results in EMEA, a little bit more just curious about the changes in trend you may have seen versus earlier in the year and your expectations going forward and then second.

Rick Patel: Just a follow up to the last question I'm curious, how we should be thinking about the outlook for operating expenses not just in the fourth quarter, but beyond that as we think about the transformation program and the path to get to 30% margins over the long term.

Rick Patel: What seems to be a more challenging backdrop today.

Jonathan Sinclair: If you look at the average of what we experience in Asia-Pacific, specifically in mainland China, we see good levels of revenue productivity and good levels of margin. So we're very encouraged by that. We expected to see that, but, of course, it's... We're going through really the first quite normal period of trading there for a good period of time.

Speaker Change: Thanks, Rick.

Speaker Change: Let me give you some color on EMEA. So have you heard.

Speaker Change: In Q3 revenue was down 26% and that was both in DTC and wholesale revenue. When you think about that region. It's a much more even split between DTC channel and wholesale and so without impacting on both channels have that significant more significant.

Speaker Change: And I thought it would in other regions and store revenue was slightly up E Commerce, where we saw more pressure that was.

Jonathan Sinclair: So, that gives us a lot of encouragement as to both the current performance there but also the potential for our performance in Asia Pacific General. I think when it comes to adjusted EBIT and as we think about the opportunity to grow, I think I lean heavily on what we've been talking about in the transfer. You've already heard Dani describe some of the work that went on this quarter, and we see, as I said in my prepared remarks, the benefit of that accruing progressively over time. But I'd remind you that it's something pretty comprehensive in its approach. It's multi-stream and multi-year, but we don't see that as something that we have to wait for five years before we see any benefit from. So, for example, when we think about Alfred H. Muggle.

Speaker Change: Slowly down wholesale is really the big story there because.

Speaker Change: The volume of wholesale business that we do there and so again reminding you that we are streamlining on purpose that we started with a lower than planned at the Eric staffing had been trying to strategically reduce that also that wholesale channel I was feeling a lot more pressure you know across the board every category Theyre, just theyre well inventory and so there was discounting which obviously.

Speaker Change: Impact.

Speaker Change: Yeah.

Speaker Change: So between that too like the traffic was good conversion with.

Speaker Change: As I said earlier, a little more.

Speaker Change: And so that's why our focus is on we have a lot of new stores that we've opened in the last few years and so that's really our focus when you think about FY 'twenty five priorities of making sure that as we increase the productivity of those stores, but I am happy about is to see what people are buying in those markets. So demand is strong brand is healthy there they're coming into us.

And to our stores and online can buy different things. So they arent just thinking about as far that heavyweight down park, either buying police, they're buying hybrid set there I'm looking at footwear. So that it's really encouraging to me that they understand where the brand is growing and that consumers want the products that we're offering so more opportunity ahead for sure.

Jonathan Sinclair: We think about marketing, we think about technology, we think about the store program or procurement, and the supply chain. We see opportunity in each and every one of them, and we are organized behind those to really drive better. So we've always said this will accumulate over time, but as I said, we're already at the point where we've got 15% of the benefit in the run rate by the start of next year, and we're targeting more. Great. Thank you so much.

Speaker Change: I think when it comes to to SG&A.

Speaker Change: It's worth unpacking, it a little bit about what's been going on for all of them just just talking to them to the future I think.

Speaker Change: SG&A.

Speaker Change: It's a function of a larger retail network and ongoing investment in store expenses.

Operator: Thank you. Our next question comes from the line of Rick Patel with Raymond James. Thank you. Good morning, everyone.

Speaker Change: The margin policy that has been pressurized by the fact that we're getting softer year on year.

Speaker Change: Great.

Speaker Change: No we remain committed to improving our pricing.

Carrie Baker: Two questions for me. First, on Europe. I'm hoping you can unpack the results in EMEA a little bit more. Just curious about the changes in trend you may have seen versus earlier in the year and your expectations going forward. And then, second, just to follow up on the last question, curious how we should be thinking about the outlook for operating expenses, not just in the fourth quarter, but beyond that, as we think about the transformation program and the path to get to 30% margins over the long term in what seems to be a more challenging backdrop today. Thanks, Eric.

Speaker Change: In the near term.

Speaker Change: Now I talked specifically about the transformation program costs down because we see that.

Speaker Change: We're right in the middle of planning next year or at the moment and in that context.

Speaker Change: We are.

Speaker Change: Looking at how we stabilized expenses.

Speaker Change: Within that.

Speaker Change: Pace up with the pace of our retail expenditure program should look like.

Speaker Change: Thank you very much.

Speaker Change: Yeah.

Speaker Change: Our next question comes from the line of <unk>.

Carrie Baker: Let me give you some color on EMEA. As you heard, Q3 revenue was down 26%, and that was both DTC and wholesale revenue. When you think about that region, it's a much more even split between the DTC channel and wholesale. And so the impact on both channels has a significant, more significant impact than it would in other regions. Store revenue is slightly up. Ecom was where we saw more pressure that was slowly going down.

Speaker Change: Shao with Wells Fargo. Your line is open.

Shao: Hey, guys. Thank you Anna and good.

Shao: Jonathan.

Shao: Neil welcome.

Shao: I guess I wanted to ask about the gross margins in the inventory. So I think Jonathan you mentioned inventory provisions taken in the quarter could you give us more color on.

Shao: What exactly drove that sounds like it was in both channels is there anything expected.

Carrie Baker: Wholesale is really the big story there because of the volume of wholesale business that we do there. And so again, reminding you that we were streamlining on purpose. We started with a lower order book than planned for the year.

Shao: From a provision standpoint in the fourth quarter and then how should this kind of inform our views of how the channel gross margins look both in the fourth quarter and maybe even into next year. Thank you.

Carrie Baker: That's because we're trying to strategically reduce. Then also, the wholesale channel is feeling a lot more pressure, across the board, every category, they're just, they're well inventoried. And so there was discounting, which obviously had an impact. So, between that, too, like, the traffic was good. Conversion was, you know, as I said earlier, a little more challenging.

Speaker Change: So our view on gross margins at a channel level has really not changed.

Speaker Change: We've always said.

The long term view is mid seventies.

Speaker Change: Mid to high Forty's.

Speaker Change: DTC and wholesale respectively. This year wholesale looks a bit better than that it's got a bit of an FX tailwind. So that's obviously helps it.

Carrie Baker: And so that's where our focus is. We have a lot of new stores that we've opened in the last few years. And so that's really our focus when you think about FY25 priorities of making sure we increase the productivity of those stores. What I am happy about is to see what people are buying in those markets. So, demand is strong. Brand is healthy there.

Speaker Change: I think when it comes.

We feel our inventory is good.

Speaker Change: We obviously have been very focused on improving.

Speaker Change: The.

Speaker Change: Productivity of the inventory and that's why you've seen it going from 20% up about this time last year progressively down and.

Speaker Change: And its growth rate to a point, where it's now flat year over year, and we see more opportunities still.

Carrie Baker: They're coming into us, into our stores, whether it's online, to buy different things. So, they aren't just thinking about us for that heavyweight down parka. They're buying fleece. They're buying hybrid knit. They're looking at footwear.

Speaker Change: When it comes to the obsolescence provisions to be honest.

Speaker Change: We believe it's appropriate to be cautious as we are developing the adjacent categories, but we continue to enjoy as you can see notwithstanding the very robust gross margins at the channel level.

Carrie Baker: So, that is really encouraging to me that they understand where the brand is growing and that consumers want the products that we're offering. So, more opportunity ahead for sure. I think when it comes to SQ&A...

Speaker Change: Despite the.

Speaker Change: Change in product mix.

Speaker Change: For those newer categories. So overall, we feel pretty good.

Jonathan Sinclair: It's worth unpacking a little bit about what's been going on rather than just talking about. I think our SG&A growth is a function of a larger retail network and ongoing growth. And the margin part of that has been pressurized by the fact that we're getting softer year-on-year revenue. Now, we remain committed to improving our operating leverage in the near term, and I talk specifically about the transformation program just now because we see that. We're right in the middle of planning next year at the moment, and in that context, we are looking at how we stabilize expenses and within that, what the pace of our retail program should look like. Thank you very much. Our next question comes from the line of Ike Boruchow, from Wells Fargo. Your wine is open,

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Thank you. Our next question comes from the line of Alexander Perry with Bank of America. Your line is opened.

Speaker Change: Yeah.

Alexander Perry: Hi, Thanks for taking my question here I guess I just wanted to ask a little bit about wholesale so as we move into 2024.

Alexander Perry: How should we be thinking about wholesale from here would you say you know after this year, you're mostly done editing down your door count would you expect this to be sort of the new baseline and then wholesale grocery here.

Alexander Perry: That'd be really helpful. Thank you.

Alexander Perry: Alright, thanks for the question wholesale.

Speaker Change: It's an ongoing effort so for US no I wouldn't say that we're I would ever say, one particular year. That's the new baseline. This has been something that we do constantly whether there's new entrants that are really important with the influencer customers our target customers that were not reaching well add those those doors.

Speaker Change: For us it's more about auto control total in funds to the market and protecting the brand and so for US you know.

Speaker Change: Wholesale as we both had Jonathan said earlier and I've said before is that all sounds really important channel to us again accretive to our brand helps us validate maybe certain categories.

Operator: Thank you, guys, thank you, and Jonathan, congrats, and Neil, welcome. I guess I wanted to ask about gross margins and inventory. So I think, Jonathan, you mentioned inventory provisions taken in the quarter. Could you give us more color on what exactly drove that? It sounds like it was in both channels.

Speaker Change: Geographic reach obviously, we don't anticipate having hundreds of stores in our own network and so they play a really critical role for us, but it has to be strategic it has to be important to our customer and so that's the spirit in which we look at our editing process. So in terms of this.

Speaker Change: You saw that in Q3, a lower order book, they're a little bit under pressure and so we're working really closely with the partners that that we see in the future strategic partners, whether we're helping them to lose returns hormones inventory, whether we're making swaps, whether we're helping them on the marketing funds and investment to get that inventory anything so it really is.

Jonathan Sinclair: Is anything expected from a provision standpoint in the fourth quarter? And then how should this kind of inform our views of how the channel gross margins look, you know, both in the fourth quarter and maybe even into next year? Thank you.

Jonathan Sinclair: So our view on gross margins at a channel level has really not changed. We've always said that the long-term view is mid-70s and mid-to-high-40s for DTC and Wholesale respectively. This year, Wholesale looks a bit better than that. It's got a bit of an FX tailwind, so that's obviously helpful.

Speaker Change: Truly a partnership but that's.

Speaker Change: That's an ongoing work that I think that will continue in FY 'twenty five that likely FY 'twenty six as well.

Speaker Change: Perfect. That's very helpful best of luck going forward.

Speaker Change: Thank you. Our next question comes from the line of Jonathan Komp with Baird.

Jonathan Sinclair: I think when it comes to, you know, we feel our inventory is good; we obviously have been very focused on improving the productivity of the inventory, and that's why you've seen it going from 20% higher at this time last year, progressively down in its growth rate to a point where it's now flat year over year, and we see more opportunity still. When it comes to the obsolescence provisions, to be honest, we believe it's appropriate to be cautious as we're developing the adjacent categories, but we continue to enjoy, as you can see, notwithstanding that very robust gross margin of the channel. Despite the change in product mix in favor of those newer categories. So overall, we feel pretty good. Thank you. Our next question comes from the line of Alexander Perry with Bank of America. Your line is open.

Jonathan Robert Komp: Your line is open.

Jonathan Robert Komp: Yeah, Hi, Thanks, Good morning, Jonathan and I just wanted to follow up you mentioned thinking strategically about the pace of retail expansion going forward. Just wanted to ask are there any factors that could highlight as you make that decision with it when it makes sense too.

Speaker Change: Slowdown in the pace in the near term as they focus on productivity and margin of the existing base just just any more color there.

Speaker Change: Hey, Jonathan it's Gerry I'll actually take that question.

Gerry: Yes, and the pace of retail expansion. We obviously believe that there are still tons of runway. We have we're going to have 68 stores at the end of this year that is still tons of white space for us to go after in any given region.

Gerry: So there's no there's.

Gerry: There's no change in our appetite in terms of where we think this brand can go in and the importance of opening stores that said, we have opened a lot of stores in the last few years that I've been in challenging environments and so we haven't seen the productivity that we note that they are capable of and so that really is our near term.

Carrie Baker: Hi, thanks for taking my question here. I guess I just wanted to ask a little bit about wholesale. So as we move into 2024, how should we be thinking about wholesale from here? Would you say, you know, after this year, you're mostly done editing down your door count, would you expect this to be, you know, sort of the new baseline, and then, you know, wholesale gross from here? That'd be really helpful.

Gerry: Focus making sure that we are delivering that amazing Canadian once experience to consumers, making sure. We're maximizing the traffic that is coming in three of those doors getting closer to the customer.

Gerry: Being able to present that full expanded.

Gerry: Category Assortments that were doing such great work on so there is no shortage in our appetite for where it can go but the near term focus really is on.

Gerry: Getting more out of what we've already invested in them.

Carrie Baker: Thank you. Sure, thanks for your question. Wholesale, it's an ongoing effort. So for us, no, I wouldn't say that we're, I would never say one particular year, that's the new baseline. This has been something that we do constantly; whether there's new entrants that are really important with influencer customers or target customers that we're not reaching, we'll add those, those doors. For us, it's more about total control, total influence in the market, and protecting the brand. And so for us, you know, Wholesale, as we both said, Jonathan said earlier, and I've said before, is that wholesale is a really important channel to us. Again, accretive to our brand, helps us validate maybe certain categories, geographic reach. Obviously, we don't anticipate having hundreds of stores in our own network. And so they play a really critical role for us, but it has to be strategic, it has to be important to our customers. And so that's the spirit in which we look at our editing process. So in terms of this year, you saw that in Q3, with a lower order book, they're a little bit under pressure.

Speaker Change: Okay that makes sense and then just one follow up when you think about the conversion discussion I just wanted to ask about sort of pricing and comfort at the levels you're at its Ben.

Speaker Change: Quite a bit of cumulative pricing over the last few years and some of the partners have moved well beyond the levels. They are priced at.

Speaker Change: Four or five years ago, just what I ask you about sort of current comfort are there any styles.

Speaker Change: You might ever.

<unk> pricing or how to think about pricing changes going forward.

Speaker Change: So this is a great conversation because I think it's so interesting when you think about luxury brands and you know pricing comes up a lot.

Speaker Change: Luxury brands, it's not about.

We're not looking at need state necessarily youre, creating desire for on X that people want and so price point matches up it's typically not the factor of whether theyre, they're buying or not and that's helped the spirit of what we think and so when we think about our assortment do we have enough breadth in the assortment to reach different consumer and stop and think about that do we make sure that there is enough.

Speaker Change: The quality of the craftsmanship I think that's why people come to Canada Goose for an amazing product that they know we will deliver it when that style, whether it's <unk>.

Speaker Change: Comfort, whether it's a performance and so we price that accordingly, so yes, we typically have taken price in the single digits, we have not seen price resistance to that and so we actually think there's quite a lot of headroom in terms of introducing new whether it's your categories do you new styles within a category at much higher price points and so we're quite comfortable.

Carrie Baker: And so we're working really closely with the partners that we see in the future as strategic partners, whether we're helping them move returns or move inventory, whether we're making swaps, whether we're helping them on the marketing front and investing to get that inventory moving. So it really is truly a partnership, but that's an ongoing work. So I think that will continue in FY25 and likely FY26 as well. Perfect. That's very helpful.

Speaker Change: With that we're at today.

Speaker Change: Room to grow in the future.

Speaker Change: Alright, Thanks, Kerry that's very helpful.

Speaker Change: I appreciate it.

Speaker Change: Okay.

Speaker Change: Your next question comes from the line of Michael <unk> with Barclays. Your line is open.

Carrie Baker: Best of luck going forward. Thank you. Our next question comes from the line of Jonathan Komp with Bayard: you don't want to. Yeah, hi, thanks. Good morning.

Michael: Good morning, everyone. This is Mike will do on freight journey and thank you for taking our question.

Michael: As you continue to grow and gain traction in the China business would you. Please share additional color on the various investments here allows you to grow the business.

Carrie Baker: Jonathan, I just want to follow up. You mentioned thinking strategically about the pace of retail expansion going forward. I just wanted to ask, are there any factors you could highlight as you make that decision?

Michael: Okay.

Speaker Change: Sorry, I missed the first few words, what you said could you repeat it please.

Carrie Baker: Would it make sense to flow down the pace in the near term as you focus on productivity and margin of the existing base? Just any more color there. Hey, Jonathan, it's Carrie.

Speaker Change: Sure I was saying like as you continue to grow and gain traction in the China business would you. Please share any additional color on the investments you are making.

Speaker Change: Leveraging to grow this business.

Carrie Baker: I'll actually take that question. So, yes, pace of retail expansion. We obviously believe that there is still tons of runway. We have, we're going to have 68 stores at the end of this year. That is still tons of white space for us to go after in any given region.

Speaker Change: So I think.

Speaker Change: We all obviously we have been.

Speaker Change: Both of our retail network that quite extensively.

Speaker Change: That's something that we remain very focused on making children.

Speaker Change: Right. So it was in the right places that we've got the right merchandising we are investing in inventory behind.

Carrie Baker: So there's no change in our appetite in terms of where we think this brand can go and the importance of opening our own stores. That said, we have opened a lot of stores in the last few years that have been in challenging environments, and so we haven't seen the productivity that we know that they are capable of.

Speaker Change: Behind that growth and we see a ton of opportunity behind US. We've also got a very strong lasting table on the ground.

Speaker Change: Because we believe very firmly that you've got to you've got to be very much in tune with the Chinese consumer in order to develop with us.

Speaker Change: And therefore to make sure that we're realizing them right.

Carrie Baker: And so that really is our near-term focus, making sure that we are delivering that amazing Canadian warmth experience to consumers, making sure we're maximizing the traffic that is coming through those doors, getting close to the customer, you know, being able to present that full expanded category assortments that we're doing such great work on. So there's no shortage in our appetite for where it can go. But the near-term focus really is on getting more out of what we've already invested. Okay, that makes sense. And then just one follow-up.

Speaker Change: The right materials, but also the right events web presence in the right places wasn't C E.

Speaker Change: Launch event of the business.

Speaker Change: Pittsburgh.

Speaker Change: Fifth anniversaries or have been for the business as it's full so.

Speaker Change: Those are good examples of the way in which we've had it out lastly, we also invest in online we started.

Speaker Change: China, just on T mobile and J D they'll come.

Speaker Change: We track that as we got further activity planned to expand our digital footprint there as well.

Carrie Baker: When you think about the conversion discussion, I just want to ask about sort of pricing and comfort at the levels you're at. There's been quite a bit of cumulative pricing over the last few years, and some of the parkas have moved well beyond the levels they were priced at, you know, four or five years ago. Just what I asked about sort of current comfort. Are there any styles you think you might ever reduce pricing on or how to think about pricing changes going forward? I like that one too.

Speaker Change: Just one add to that is just on the product front. So we wholesale over the last few years since we've been open and partnered with a local Chinese designers to let it and can win whether it's angel chairman. So we had really good success of partnering together to bring to life something that's really meaningful not just in China are broader APAC, but also around the world, but leveraging that that chi.

Annie's style and relevance and cultural relevance. So that's been one of the key investment for us over the time.

Speaker Change: Perfect. Thank you and then just one follow up regarding the China market do you have any data on age or income demographics in China versus other markets and even more specifically, which demographics are you seeing driving the China business.

Carrie Baker: So this is a great conversation, because I think it's so interesting when you think about luxury brands, and you know, pricing comes up a lot. Luxury brands aren't about and not looking at the need state, necessarily; you're creating desire for products that people want. And so price point matches up, but it's typically not the factor of whether they're buying or not.

Speaker Change: So we have some data.

Speaker Change: On the market, but what I would say is that the.

Speaker Change: Generally speaking and this is also true in China, we enjoy broad appeal across a lot of demographics up both by age by income side.

Speaker Change: We all.

Carrie Baker: And that's the spirit of what we think of. So when we think about our assortment, do we have enough breadth in the assortment to reach different consumers, a big focus? We make sure that there's enough, you know, quality, and craftsmanship. I think that's why people come to Canada Goose for an amazing product that they know will deliver, whether it's style, whether it's, you know, comfort, whether it's performance. And so we price that accordingly. So yes, we typically have taken prices in the single digits. We have not seen price resistance to that.

Speaker Change: <unk>.

Speaker Change: Also very engaged with Gen Z.

Speaker Change: Mainland China, and that's important because they are drivers of interest in the sector and spending.

Speaker Change: Awesome. Thank you very much.

Okay.

Speaker Change: Our next question comes from the wider Mark Petrie with CIBC. Your line is opened.

Speaker Change: Okay.

Mark Petrie: Hey, good morning could you just talk a little bit more about the performance of the different categories within non heavyweight down and also just give us a sense of how the SKU count has evolved versus a year ago or a couple of years ago.

Mark Petrie: That varies across regions at all and then.

Mark Petrie: Any any sense you can share with regards to.

Carrie Baker: And so we actually think there's a lot of headroom in terms of introducing new categories, new, new styles within a category at much higher price points. So we're quite comfortable with our position today, and there's room to grow. Great. Thanks, Gary. That's very helpful.

Mark Petrie: How that will evolve in the coming periods acceleration or deceleration. Thanks.

Mark Petrie: Okay.

Speaker Change: Thanks Mark.

Speaker Change: So look I.

Speaker Change: Performance within not heavily weighed down as you heard has been really strong.

Operator: Much appreciated. Your next question comes from the line of Michael Vu with Barclays. Your line is open. Good morning, everyone.

Speaker Change: So that has obviously increased the share of revenue expanding in that overall mix. So all categories grew but non heavyweight downward fastest within that it was really apparel and that was and in every region. So I mentioned in our.

Jonathan Sinclair: This is Michael Vuhan on behalf of Adrian Yee, and thank you for taking our question. As you continue to grow and gain traction in the China business, would you please share additional color on the various investments you're leveraging to grow the business? Sorry, I missed the first few words of what you said. Could you repeat that?

Speaker Change: Hybrid net programs Sweat program that we've introduced in the last couple of years fleece is our standout performer for us.

Speaker Change: For sure and again, that's a cross category, what I'm loving to see about that is that women are driving those apparel purchases and that's been a really deliberate concentrated effort in terms of.

Operator: Sure, I was saying, like, as you continue to grow and gain traction in the China business... Would you please share any additional color on the investments you're making and leveraging to grow this business? So I think we are obviously, we've been developing our retail network there quite extensively. And that's something that we remain very focused on making sure that we've got the right stores in the right places, we've got the right merchandise, we're investing in inventory behind that growth, and we see a ton of opportunity behind that. We've also got a very strong marketing team on the ground because we believe very firmly that you've got to be very much in tune with the Chinese consumer in order to develop a, and therefore, to make sure that we're sourcing the right materials, but also the right events.

Speaker Change: Not just from a product design perspective about how we reach consumers. How we reached the scene of how we market to them, how we bring that to life.

Speaker Change: Very happy to see that progress. The other category you know we've talked a lot about footwear over the years accessories has been growing every day, which is an integral part, but if the wind and rain. Those programs are all growing meaningfully there just still small on their own so they're kind of lumped together, so I'm trying to think of any major differences.

Speaker Change: Across the region, but theres nothing significant.

Speaker Change: Overall I would say in Q3, we talked about the expedition and very strong in APAC and that's it's great to see is we've had that in our line for a long time and to see it in a market that is important is China is still growing that's that's great.

Speaker Change: Second question was on SKU count so versus last year or two years ago, Yes, we have.

Speaker Change: Consolidating it's not deliberate to just get to a specific number we're trying to look at the assortment in and make sure that that assortment makes sense for the size of our store the online offering making sure. It's palatable for a consumer out there visiting us in any one of those channels. So definitely has been some editing.

Operator: We're present in the right places, whether it's CIIE, we had the launch event for the business, and the fifth anniversary event for the business this fall. So those are good examples of the way in which we've handled that. Lastly, we also invest in online. We started in China just on Tmall, we're on JD.com, WeChat, and we've got further activity planned to expand our digital footprint.

Speaker Change: Also to make room for the category. So we know that there's lots of white space in terms of us showing up as a lifestyle brand new categories are important part of that and so we want to make sure that we're being as productive as in Canada. The styles that we have.

Jonathan Sinclair: One add to that is just on the product front. So we've also, over the last few years since we've been open, partnered with local Chinese designers. So whether it's Feng Cheng Wen, or Angel Chen.

Speaker Change: Okay.

Speaker Change: Some room and some and some yes, some breathing room for consumers to receive that well.

Speaker Change: Okay.

Speaker Change: There are no further questions at this time I would like to turn things over to Ana Raman for some closing remarks.

Ana Raman: And then just wanted to thank everybody for joining US today. We appreciate your interest in Canada Goose and with that we'll conclude this call. Thank you.

Carrie Baker: And so we've had really good success in partnering together to bring to life something that's really meaningful, not just in China or broader APAC but also around the world, but leveraging that Chinese style and relevance and cultural relevance. So that's been one of the key investments for us over time. Perfect, thank you. And then just one follow-up regarding the Chinese market. Do you have any data on age or income demographics in China versus other markets? And even more specifically, which demographics are you seeing driving China?

Ana Raman: Yeah.

Okay.

Ana Raman: Okay.

Ana Raman: Yeah.

Ana Raman: Okay.

Ana Raman: Yeah.

Ana Raman:

Jonathan Sinclair: So we have some data on the market, but what I would say is that, generally speaking, and this is also true in China, we enjoy broad appeal across a lot of demographics, both by age and by income. We are specifically, though, also very engaged with Gen Z. And that's important because they are drivers of interest in the sector and society. Awesome, thank you very much. Our next question comes from the line of Mark Petrie. CIBC, your line is open.

Ana Raman: [noise].

Carrie Baker: Good morning. Could you just talk a little bit more about the performance of the different categories within non-heavyweight down? And also just give us a sense of how the skew count has evolved versus a year ago or a couple years ago, if that varies across regions at all, and then any sense you can share with regard to how that will evolve in the coming periods, acceleration or deceleration.

Carrie Baker: Thanks. Thanks, Mark. Yeah, so look, performance within the non-heavyweight division, as you heard, has been really strong.

Carrie Baker: So that has, you know, obviously increased the share of revenue expanding in that overall mix. So all categories grew, but non-heavyweight down grew fastest. Within that, it was really apparel, and that was in every region. So, you know, I mentioned our hybrid knit programs and sweat programs that we've introduced in the last couple of years. Fleece is a standout performer for us, for us for sure.

Carrie Baker: And again, that's a cross category. What I'm loving to see about that is that women are driving those apparel purchases. And that's been a really deliberate, concentrated effort in terms of, you know, not just from a product design perspective, but how we reach consumers, how we reach those females, how we market to them, how we bring that to life.

Carrie Baker: I'm very happy to see that progress. The other category, you know, we've talked a lot about footwear over the years; accessories have been growing every day, which is an internal term, but, you know, for wind and rain, those programs are all growing meaningfully, they're just still small on their own, so they're kind of lumped together. So, I'm trying to think of any major differences across the regions, but there's nothing significant overall.

Carrie Baker: I would say in Q3, we talked about the Expedition being very strong in APAC, and that's, it's great to see it. We've had that in the pipeline for a long time, and to see it in a market that's as important as China, you know, still growing, that's great. Your second question was about SKU camp versus last year or two years ago. Yeah, we have been consolidating. It's not deliberate to just get to a specific number.

Carrie Baker: We're trying to look at the assortment and make sure that that assortment makes sense for, you know, the size of our store, the online offering, make sure it's palatable for a consumer as they're visiting us in any one of those channels. So there definitely has been some editing. Also, to make room for new categories. So we know that there's lots of more white space in terms of showing up as a lifestyle brand, and new categories are an important part of that. And so we want to make sure that we're being as productive as we can with the styles that we have.

Carrie Baker: Give some room and some breathing room for consumers to receive that well. There are no further questions at this time. I'd like to turn things over to Anna Raman for some closing remarks. We just want to thank everybody for joining us today.

Anna Rahman: We appreciate your interest in Canada Goose. And with that, we'll conclude this call. Thank you.? ??? ??? ??? ??? ??? ??? ??? ??? The Ultimate Parody Site! Subs by www.zeoranger.co.uk and www.facebook.com.au