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.

At this time I would like to introduce you to.

The Canada Goose Q3, FY 'twenty four earnings call.

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

After the Speakers' 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.

I would like to withdraw your question again press Star one.

Yep.

I will now hand, the call over to Ana Raman head of Investor Relations you.

You may begin your conference.

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 administration, and Neil Bouton Deputy.

And incoming CFO.

So Danny 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.

Subject to risks and uncertainties that could cause actual results to differ materially from those projected.

Certain material factors and assumptions were considered and applied in making these forward looking statements <unk>.

Additional information regarding these statements factors and assumptions and regarding material factors that could cause actual results to differ from those projected.

Billable 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.

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 report in Canadian dollars. So all amounts discussed today are in Canadian dollars unless otherwise indicated.

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

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 will turn the call over to Danny.

Thanks, Anna and good morning, everyone.

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

Sales were up 6% over the last year with adjusted EBIT of $207 2 million.

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 of demand for our emerging product lines and the <unk>.

Growth, we achieved during key holiday shopping days across all regions.

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.

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.

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

Operator: 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. If you would like to withdraw your question, again, press star. Thank you. I will now hand the call over to Anna Rahman, Head of Investor Relations. Anna, you may begin. You're up.

And what is typically a promotional retail environment. Our sales were up full price and revenue grew across all regions with record traffic in our stores.

And our best single day ever in China outperformed our industry, leading luxury hotel brand on Tmall again at full price.

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.

Anna Rahman: 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. Additionally, certain material factors and assumptions were considered and applied in making these forward-looking statements. 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. These documents are also available on the investor relations section of our website.

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

Let me take you through the progress that we've made in each of these pillars during the past quarter.

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 warms experienced that define the Canada goose customer journey once in every interaction expertise behind every recommendation.

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 as a percentage of shoppers, indicating that our in store brand and product storytelling is positively impacting their perception of the brand.

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

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

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.

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

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 what's <unk> Giants of Africa organization, which empowers and inspires African you through basketball to make losses.

Their communities work, but it is incredibly important to kind of the 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 for our own database, we're above our year to date average.

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 ourselves along the list again and to see our ranking improvement year over year.

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 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. This is what inspires us to continue to reinvent our icons, expand our categories, and introduce newness with style.

Turning to our second pillar building, our DTC network.

In Q3, we added two permanent stores, one in New Jersey, The American Dream Mall, and one in Kobe, Japan.

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.

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

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

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

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

Dani Reiss: 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.

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

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.

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.

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.

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

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

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.

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

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

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 Block 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.

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.

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

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.

This has enhanced assortment planning and driven improvements and localize assortments for our stores during Q3, we measured and improvements in both productivity and inventory turnover directly resulting from this initiative.

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.

While the benefits we achieved were muted due to the external environment the improvement 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 customers online on the front and on the buyback through this work, we expect to see improvements in conversion and return rates, the latter of which we're making meaningful progress against and I look forward to continuing.

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

And now turning to our third pillar product expansion.

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

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 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.

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.

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.

In Q3, our non heavyweight 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 heavy way down.

Recently 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.

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 Mainland 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.

Merrell 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 is increasingly resonating in the minds of consumers from products sold outside of cold weather here.

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

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

February down sales were led by APAC and came in lower in both North America and EMEA.

The strength in APAC reflects both the colder weather in greater China in Q3, as well as lapping the store closures last year relating to Covid restrictions.

Dani Reiss: However, we believe the delayed onset and cold weather through December contributed to softer domestic demand for 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 in the highest single digits year-on-year, driven by strength in China, offset by a We believe that the highly promotional environment combined with continued pressure on consumer spend in the quarter contributed to challenges in 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.

In mainland China, Our expedition Park, one of our most iconic styles with our best selling 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.

I'm very confident in our brand and our strategy.

Customers experienced Canada Goose firsthand note that we deliver performance function quality and style and more than ever before customers are discovering a performance luxury offering beyond our only cold weather products.

We are excited about this opportunity in a future in which even more consumer where kennedy years year round.

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 he will make a new role as president of APAC.

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

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

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.

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

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

Thank you for the warm welcome Danny and good morning.

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 the wrong.

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 back ends. 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.

First and foremost im spending my Onboarding time learning from the front lines of our business spending time in our stores and in our manufacturing facilities.

I spent much of my career in retail business and I am a huge believer of how much you can learn from both our customers and our operations from seeing the front lines.

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

Really data driven person and Thats 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: 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.

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

Thank you Don and good morning, everyone.

Dani Reiss: Now in a new category that will play an important role in driving year-round relevance for, In Q3, our non-heavyweight down 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.

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.

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.

This was driven by brick and mortar sales.

By shopping during key consumer moments, both online and in person.

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 gear, 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.

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.

Q3 wholesale revenue of $81 8 million was.

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.

We also estimate as high return small wholesale partners in Q3, as we proactively manage our inventory.

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

Dani Reiss: The strength of AIPAC reflects both the colder weather in Greater China and Q3, as well as the lapping of 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 China. In closing, while our top line results for Q3 were mixed in a challenging consumer environment, we were 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 first-hand 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 products.

And reach our target customers and rationally 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.

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

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

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

Revenues from Asia Pacific grew 62% year over year to $277 million or.

While 63% on a constant currency basis.

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

Dani Reiss: We are excited about this opportunity for a future in which even more consumers work hand in hand, 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 on transitioning to 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. 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.

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

Our stores in Hong Kong, and Macau continue to benefit from mainland Chinese tourism Wilds, Taiwan witnessed solid local demand.

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

In December.

Within non heavyweight down apparel and footwear with distinct outperformance 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 U S and in Canada.

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.

<unk> December also meant all consumers preferred are known the heavyweight down offerings with healthy category growth, partially offsetting the year over year decrease in heavyweight down sales in this geography.

Beth Clymer: Thank you for the warm welcome, Dani, and good morning. 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. 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.

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

Lastly.

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

27% down on a constant currency basis.

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.

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

Beth Clymer: Second, I'm diving deep into the priorities, the KPIs, and the financials of the business. 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, Keri, 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 toward becoming a leading luxury and lifestyle brand. With that, I'll hand it back to Dani.

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

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

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.

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.

Dani Reiss: 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.

<unk> III provisioning product costs.

Adjusted EBIT was $207 $2 million.

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.

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 program are excluded from adjusted EBIT.

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 BTC 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. 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 channel.

We do expect this expense to largely conclude in Q4.

As we wind down.

Consulting engagements.

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

Diluted share.

Turning to our balance sheet, we ended the third quarter of fiscal 'twenty, four 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.

We continue to focus on optimizing inventory productivity.

Mostly monitoring demand and supply levels in each of our sales channels and in each of our geographies.

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

Jonathan Sinclair: 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. That was principally due to the incremental revenue contributed by our recently acquired manufacturer, Palo Convecto. 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.

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.

That includes the value of our leases.

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

The revolving credit facility.

December 31st.

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.

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.

<unk>.

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

Jonathan Sinclair: Mainland China was a standout in terms of strong performance across all categories. 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 performers, 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. U.S. DGC 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 you.

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

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.

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

We are targeting more or less.

Now turning to our outlook.

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.

Jonathan Sinclair: 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. ETC revenues in Canada were also lower year-over-year as both store and e-commerce revenues came under pressure. EMEA revenue was down 26% year-over-year to $86.8 million, or 27% down on a constant currency value.

Growing our core heavyweight category.

And while we're still in the early days of implementation of our transformation program.

We are realizing efficiencies sooner than we expected.

The mix consumer environment has proved more of a headwind compared to the benefits we've seen 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.

Jonathan Sinclair: This was largely driven by lower wholesale revenue but also pressured by softer DTC. However, Harold was a standout performer with an increased share of revenue within the product. Turning Squares Profit. 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. The gross margin expanded 150 basis points to 73.7%, primarily due to pricing and partially offset by higher product. Q3 gross margin in 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. 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.

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

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

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

We expect total revenue between 310 and $330 million.

Non <unk> adjusted EBIT.

Of between 14 and $27 million.

Non <unk> adjusted net income per diluted share between two and 13 cents.

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.

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

Which.

A low single digit decrease to a low single digit increase in year over year, DTC comparable sales growth versus last year.

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.

Okay.

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 editing of a wholesale door count.

Turns from our wholesale partners revised reorder expectations and the impact of our retail store network.

We expect non <unk> adjusted EBIT.

Between $1 46, and $158 million in fiscal 'twenty, 'twenty, four representing an operating margin between 11 and 12%.

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: 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 brought 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.

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 cost base moderated by cost savings initiatives, including around $15 million in savings from the transformation program in fiscal 2024.

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

Yeah.

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: 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. In turn, our net debt leverage reduced 2.1 times adjusted EVTA at the end of Q3, compared to 3.3 times at the end of Q2. At December 31, we had completed the repurchase of the entire amount 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.

Fiscal 2024.

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 a unique value proposition as a performance luxury lifestyle brand.

Our entire distribution network to our customers around the world.

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.

As this is my last earnings call as CFO.

Jonathan Sinclair: 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... 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 products, while throwing a core heavyweight down. And while we're still in the early days of implementation of our transformation program, we are realizing efficiencies sooner than we expect.

Moving to head of Asia Pacific in April I would like to welcome Neal to this role of CFO.

He is highly talented and extremely knowledgeable about the business I am confident you'll be in good hands.

And with that operator, please open up the line questions.

Yeah.

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.

Well pause for just a moment to compile the Q&A roster.

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

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.

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, you said some really really nice momentum in.

In Asia Pacific The compares get a little tougher.

How are you thinking about how traffic in and volatility may evolve I'm not on the toughening comparisons. Thank you very much.

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.

Thanks, Oliver it's Gary Yeah.

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.

Where we saw the pressure was just consumers feeling that pinch.

<unk> lost him.

So 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 spirit 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 is a lot more choice at the lower price contracts clients, particularly in the.

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 2 and 13 cents. 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.

Wholesale market, where that channel is healing benched as well.

But and then.

In terms of whether it's.

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

Yeah.

Yeah Nathan.

Major improvements in terms of the backlog backend as well as the front end to just make sure it's easy for them to find product they need.

Any friction the whole process, you've heard John and Daniel.

Can you talk about the returns we have opportunities on.

And so that's where our focus has gone 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 us that urgency with their consumer spending we saw that change significantly.

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.

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

Around the world want to shell what candidates can offer.

But there we recognize any of that one consumer in China is not the same consumers in Toronto and then in Europe until 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 they use it in a different way and so we've got meaningful work has been under.

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

Last question I actually I will turn it over to Jonathan to talk about APAC in his new role.

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 cost savings initiatives, 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.

Thanks, Gary.

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

Hong Kong Macau.

The growth in Asia Pacific.

Driven by increased traffic.

So typically for mainland China mainland China consumers.

Mainland China growth followed.

It was extremely positive throughout the quarter and then Japan.

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.

At the same time, we actually sold store traffic doubled in mainland China and in that timeframe.

With the focus on that because because we see the mainland China performance is a proof point strengths of the brand.

And.

Obviously, we executed.

All of that increased demand.

Making sure that we place the right inventory in the right locations throughout.

The retail environment seizing government entity.

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 worldwide. 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.

During key consumer and on that note.

We achieved a record Singles' day.

In mainland China.

Outpace the right.

The growth rates of peers.

In luxury outerwear table.

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

Globally, but we remain very focused on the execution of our strategy to make sure that we're capturing.

Okay.

All of the available opportunities.

Turning to what's happened since the end.

We do face tougher problems in China right.

In Asia Pacific.

A couple of reasons for that.

Last year.

D a.

Surgeons ophthalmology.

It's happened in between.

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. Your line is open. Hi, thank you very much.

<unk>.

The calendar year, and lunar new year, which was more or less speaking a three week period all right.

And so that had an impact and of course this year, there's a six week period.

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

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

Oliver Chen: In the prepared remarks, you mentioned that conversion rates are something you're watching. If you could speak to what's happening there and if it improved in January as well, also, localized assortments, I 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. The comparisons get a little tougher.

I'm very pleased with the movement, we're continuing to see.

Thank you best regards.

Okay.

Okay. All right. Thank you. Our next question comes from Brooke Roach of Goldman Sachs. Your line is open.

Good morning, and thank you for taking our question I wanted to follow up on the China discussion now that we've 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.

Kerry Baker: How are you thinking about how traffic and volatility may evolve in the toughening comparisons? Thank you very much. Thanks, Oliver. It's Kerry here.

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

Seeing in your North America, DTC business, and then perhaps for Jonathan.

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.

Okay.

Kerry 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. And then, in terms of whether it's improved in January, yes. So we're making, just to speak to the first quarter, we... We 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, 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.

I'm going to take.

That question and it's two parts, so, let's let's talk a bit about China first.

In this in this business sells sensors and our.

Margins in.

In Asia Pacific in General.

Pretty robust.

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>.

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.

But going through really the first quite normal period trading.

First a good a good period of time.

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

Kerry 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's 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.

But also the potential for our performance in Asia Pacific generally.

Okay.

I think when it comes to adjusted EBIT and <unk>.

Think about the opportunity for growth I think.

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

You've already heard Dani describes some of the wins totaled it this quarter. So when we see that as I said in my prepared remarks, the benefits of that accruing <unk>.

Progressive we have the time.

But I would remind you that it's something that is pretty comprehensive in its approach, but it's multi stream.

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

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

Operating model, we think about marketing, what we think about technology or we think about the store program with procurement.

And the supply chain.

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

So we've always said it well.

Kerry Baker: And so we've got meaningful work 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.

This will accumulate over time.

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

Hum.

Sorry, 15% of the benefit in the run rate come the start of next year, and we're targeting more than that.

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

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

Yeah.

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.

Jonathan Sinclair: We've had a significant uptick in traffic across Great Britain and China; obviously, we didn't have the Covid restrictions that we had a year ago in place at the same time, and 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 straight to 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 outerwear on T-Mobile. Now, that said, and we've talked about this before, China has not been immune to soft macro.

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.

And what seems to be a more challenging backdrop today.

Thanks, Rick.

Let me give you some color on EMEA, so as you heard.

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 some of the.

Impacting on both channels have that significant more significant.

I thought it would in other regions.

Our revenue was slightly up economies.

Where we saw more pressure that was slightly.

Jonathan Sinclair: Globally, but we remain very focused on the strategy to make sure that we're capturing all the available opportunities, turning to what's happened since the end of the war. We do face challenges in the Asia Pacific. There are a couple of reasons for that.

Slowly down wholesale is really the big story there because.

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 ear staffing has been trying to strategically reduce that also that wholesale channel I was feeling a lot more pressure across the board every category, they're just they're well inventoried and so there was discounting, which obviously I didn't.

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 Thank you. Okay, thank you.

The impact.

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

As I said earlier, a little more challenging 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.

And to us.

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

Our stores and online by.

By different things so they don't just thinking about as far that heavyweight down park, either by 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.

I think when it comes to to SG&A.

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

SG&A.

It's a function of a larger retail network and ongoing investment in store expansion.

And the margin policy that has been pressurized by the fact that we're getting softer year on year revenue growth.

No we remain committed to improving our operating leverage.

Leverage in the near term.

No I talk specifically about the transformation program goes down because we see that.

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

We are.

Looking at how we stabilized expenses.

And within that.

Hey, Chuck what the pace of all retail expenditure program should look like.

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.

Thank you very much.

Yeah.

Our next question comes from the line of Ike <unk> with Wells Fargo. Your line is open.

Hey, guys. Thank you Anna and good.

Jonathan Congrats and Neil welcome.

Jonathan Sinclair: So, that gives us a lot of encouragement as to both the current form of it there but also the potential for our performance in Asia-Pacific, generally. 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 Hume-Mogul.

I guess I wanted to ask about the gross margins and inventory. So thanks, Jonathan you mentioned inventory provisions taken in the quarter could you give us more color on what exactly.

Exactly drove that sounds like it was in both channels is there 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 both in the fourth quarter and maybe even into next year. Thank you.

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

We've always said.

The long term view is mid seventies.

Hi, Fortis.

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.

DTC and wholesale respectively. This year wholesale looks a bit better than that it's got a bit of an FX tailwind.

Obviously it helps it.

I think when it comes.

We feel our inventory is good.

We obviously have been very focused on improving the.

The productivity.

The inventory and that's why you're seeing it going from 20% up at this time last year progressively down in it.

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

This growth rate to a point, where it's now flat year over year, and we see more opportunities still.

When it comes to the obsolescence provisions to be honest.

Rick Patel: 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, 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 in what seems to be a more challenging backdrop today. Let me give you some color on EMEA.

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.

Despite the change.

Change in product mix to pay.

Papers ICU or categories. So overall, we feel pretty good.

Okay.

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

Okay.

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.

Kerry Baker: So, as you heard, 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 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.

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.

That'd be really helpful. Thank you.

Sure. Thanks for the question wholesale.

Is it going.

<unk> 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.

Kerry 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.

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

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.

Kerry 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.

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 thats the spirit in which we look at our editing process. So in terms of this.

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 move returns hormones inventory, whether we're making swaps, whether we're helping them on the marketing front end investment to get that inventory in it and so it really is truly a partnership but.

Kerry 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.

That's an ongoing work so I think that will continue in FY, 'twenty, five and likely FY 'twenty six as well.

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

Okay.

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

Kerry Baker: So, demand is strong, and the brand is healthy there. 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.

Your line is open.

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 when it makes sense too.

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

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

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

Yes, and the pace of retail expansion, we obviously believe that there's 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.

Jonathan Sinclair: It's worth unpacking a little bit about what's been going on rather than just talking about it. 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 talked 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.

So there's no there's.

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.

Focus making sure that we are delivering that amazing Canadian once experience to consumers and can share. We're maximizing the traffic that is coming in three of those stores are getting closer to the customer.

Being able to present that full expanded.

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.

Getting more out of what we've invested them.

Operator: Your line is open. Thank you, guys. Thank you. And Jonathan, congrats, and Neil, welcome.

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.

Ike Boruchow: 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.

Quite a bit of cumulative pricing over the last few years and some of the park guys have moved well beyond the levels. They are priced at.

Four or five years ago.

What I ask you about sort of current comfort are there any styles I think you might ever reduce pricing or how to think about pricing changes going forward.

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.

I think that one can see itself and 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, it's not about <unk>.

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 helped.

Looking at need state necessarily creating desire for people.

People want and so price point matches up it's typically not the factor of whether they're buying or not.

And that has 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.

Jonathan Sinclair: I think when it comes, 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.

Quality the craftsmanship I think that's why people come to Canada Goose for an amazing product that they know we will deliver what that style whether it's.

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 categories.

Categories do you styles within a category at much higher price points and so we're quite comfortable with where we're at today and.

Room to grow in the future.

Alright, Thanks, Kerry that's very helpful.

Much appreciate it.

Yeah.

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

Operator: 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.

Good morning, everyone. This is Mike will do on freight Jamie 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 here allows you to grow the business.

Yeah.

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

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.

Kerry 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, or Jonathan said earlier, and I've said before, is that wholesale is a really important channel to us. Again, it contributes 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, a lower order book, they were a little bit under pressured.

Leveraging to grow this business.

So I think.

We all obviously we have been.

Both of our retail network that quite extensively.

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

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

Behind that growth and we see a ton of opportunity behind US. We've also got a very strong marketing team on the ground.

Because we believe in it.

Got it got to be very much in tune with the Chinese consumer in order to develop with us.

And therefore to make sure that we are realizing the right.

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

Launch event of the business.

Pittsburgh.

Kerry 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. That's very helpful. Best of luck going forward. Thank you. Our next question comes from the line by Jonathan Komp with Bayard: you don't want to. Yeah, hi, thanks. Good morning.

Fifth anniversaries already been for the business. This is full so those are good examples all the way in which we pay that lastly, we also invest in online we started.

China, just on T mobile and <unk> com.

Yes.

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

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.

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

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

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.

Kerry 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.

So we have some data.

On the market, but what I would say is that the way.

Kerry 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.

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.

We are specifically, though.

Also very engaged with Gen Z.

Kerry 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.

China and that's important because they are small.

It is of interest in the sector and spending.

Awesome. Thank you very much.

Okay.

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

Hey, good morning.

Would 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, if that varies across regions at all and then.

Any any sense you can share with regards to.

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

Kerry 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 want to ask about sort of current comfort. Are there any styles you think you might ever reduce pricing on or how you think about pricing changes going forward? I like that one too.

Thanks Mark.

So look on performance within non heavy weight down as you heard has been really strong. So that has 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 on in every region. So I mentioned in.

Hybrid.

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

Kerry 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, it's not about and not looking at the need state, necessarily; you're creating desire for products that people want. And so price point matches that, but it's typically not the factor of whether they're buying or not. And that's the spirit of what we think of.

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.

I'm very happy to see that progress.

The other category, we 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 trying to think of any major differences across the regions, but theres nothing.

Kerry Baker: So when we think about our assortment, do we have enough breadth in the assortment to reach different consumers and have a big focus? Do we make sure that there's enough, you know, quality, the 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 yet.

Again.

Overall I would say in Q3, we talked about the expedition is very strong in APAC and that's it's great to see it's 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 that's great.

Your second question was on SKU count so versus last year or two years ago, Yes, we have.

Kerry Baker: And so we actually think there's quite 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 where we're at today, and there's room to grow. All right. Thanks, Gary.

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 make sure. It's palatable for a consumer out there visiting us in any one of those channels. So definitely has been some editing them also to make room for it.

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

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 style that we have.

Michael Vu: 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?

Give some room and some and some yes, some breathing room for consumers to receive that well.

Okay.

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 merchandising, 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.

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

And I just want to thank everybody for joining us today. We appreciate your interest in Canada Goose and with that we'll conclude this call. Thank you.

Yeah.

Yeah.

Yeah.

Okay.

Yeah.

Okay.

Yeah.

Okay.

[noise].

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.

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 Ben Cheng Wen, or Angel Chen.

Okay.

Kerry 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?

Yeah.

Jonathan Sinclair: And even more specifically, which demographics are you seeing driving China? 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. Thank you very much. Our next question comes from the line of Mark Petrie. CIBC, your line is open.

Mark Petrie: 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. Thanks. Thanks, Mark. Um, yeah, so look, performance within the non-heavyweight division, as you heard, has been really strong.

Kerry 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.

Kerry 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. 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 trying to think of any major differences across the regions, but there's nothing significant overall, I would say in Q3, we talked about Your second question was about SKU camp so versus last year or two years ago. Yeah, we have been consolidating. It's not deliberate to just get to a specific number.

Kerry 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, and 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 us 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 style that we have and 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. We appreciate your interest in Canada Goose. And with that, we'll conclude this call. Thank you.