Q2 2025 Canada Goose Holdings Inc Earnings Call

Canada Goose second quarter fiscal year 2025 earnings conference call.

Speaker Change: All lines have been placed on mute to prevent any background noise and 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 and if you'd like to withdraw that question again press star one.

Speaker Change: I would now like to turn the conference over to Ana Raman Vice President Investor Relations Ana you may begin.

Ana Raman: Thank you operator, and good morning, everyone with me today are Danny Reese, our chairman and CEO, Terry Baker President of branded commercial.

<unk> President of Finance strategy, and administration, and Neal Bolton Chief Financial Officer.

Speaker Change: Today's presentation will contain forward looking statements that are based on assumptions and therefore subject to risks and uncertainties that could cause actual results to differ materially from those projected.

The Larry Weiss Show.

Krista: Ladies and gentlemen, thank you for standing by. My name is Krista and I will be your conference operator today.

Speaker Change: We undertake no obligation to update these statements except as required by law.

Speaker Change: You can read about these assumptions risks and uncertainties in our press release issued this morning as well as in our filings with U S and Canadian regulators. These documents are also available on the Investor Relations section of our website.

At this time, I would like to welcome everyone to Canada Goose Second Quarter Fiscal Year 2025 Earnings Conference Call.

Krista: All lines have been placed on mute to prevent any background noise [inaudible]

Speaker Change: We report in Canadian dollars. So all amounts discussed today are in Canadian dollars unless otherwise indicated please.

Speaker Change: Please note that financial results described on today's call will compare second quarter results ended September 29, 2024 with the same period ended October one 2023, unless otherwise noted.

Speaker Change: Lastly, our commentary today will also include certain non <unk> financial measures, which are reconciled at the end of our earnings press release.

For today's call Dani carry Bath, and Neil will deliver prepared remarks, following which we will open the call to take questions with that I will turn the call over to Danny.

Thank you.

Speaker Change: Thank you, Operator, and good morning, everyone. With me today are Danny Reiss, our Chairman and CEO, Carrie Baker, President of Brand and Commercial, Seth Clymer, President of Finance, Strategy and Administration, and Neil Bowden, Chief Financial Officer.

Danny: Thanks, Anna and good morning, everyone.

Danny: I will start with Boston.

Danny: Quarter results and progress and then turn it over to Julie Ann Neale to review our performance in greater detail.

Krista: Today's presentation will contain forward-looking statements that are based on assumptions and therefore subject to risks and uncertainties that could cause actual results to differ materially from those projected.

Speaker Change: All of a solid start to the year with sales up 4% in first quarter.

Speaker Change: Top line momentum decelerated in the second quarter down 5% year over year.

Danny: Our wholesale business performed as expected down 15% year over year on a reported basis as we continue to elevate the status of our brand presence within the channel.

We undertake no obligation to update these statements, except as required by law.

Krista: You can read about these assumptions, risks, and uncertainties in our press release issued this morning, as well as in our filings with U.S. and Canadian regulators. These documents are also available on the Investor Relations section of our website.

Danny: Our DTC business come under more pressure than anticipated when we face an increasingly challenging consumer environment.

Danny: This resulted in DTC comparable sales declining 13% over the second quarter of last year.

Krista: We report in Canadian dollars, so all amounts discussed today are in Canadian dollars, unless otherwise indicated.

Danny: As Karen will discuss later, we also shifted the timing of some of our marketing spend as we build excitement first comparable mark rated retro hierarchy.

Please note that financial results described on today's call will compare second quarter results and that September 29, 2024 with the same period ended October 1, 2023, unless otherwise noted.

Danny: Unveiled later this month.

Danny: While this shift impacted Q2 results, we expect to see benefits from this activity over the second half of the fiscal year two more marketing dollars at work across several initiatives.

Lastly, our commentary today will also include certain non-IFRS financial measures, which are reconciled at the end of our earnings press release.

Danny: Reminder, approximately 75% of our revenue opportunity is still ahead of us this year.

Danny: Based on our historical performance.

Danny: We remain steadfast in our view that we can drive positive DTC comparable sales growth out of our stores in both the near and long term.

Krista: For today's call, Danny, Carrie, Beth, and Neil will deliver prepared remarks, following which we will open the call to take questions.

Danny: We are focused on executing with excellence through a busy holiday season and building an enduring brand that connects with our customers.

With that, I'll turn the call over to Danny.

Danny: Thanks, Ana, and good morning, everyone. I'll start my thoughts on our second quarter results and progress, and then turn it over to Carrie, Beth, and Neil to review our performance in greater detail.

Danny: For the second quarter with concrete actions.

Danny: Three key operating priorities to set us up for success.

Danny: All in a solid start to the year, with sales up 4% in the first quarter.

Danny: Due to a softer second quarter and the weaker macro environment around us that have been positive consumer confidence you will see that we introduced a lower range for guidance.

Upline momentum decelerated in the second quarter, down 5% year-over-year.

Our wholesale business performed as expected, down 15% year-over-year on a reported basis, as we continue to elevate the status of our brand presence within the channel.

Danny: As a reminder, our three operating imperatives are number one setting the foundation for the next stage of our brand and product evolution number two implementing best in class luxury retail execution and number three simplifying the way that we operate.

Danny: A VTC business came under more pressure than anticipated, and we face an increasingly challenging consumer environment.

Danny: I will share some insight into our first operating imperative will touch on some elements where settlements are imperatives and both will be expanded upon later this call.

Danny: This resulted in DTP comparable sales declining 13% over the second quarter of last year.

Danny: As Carrie will discuss later, we also shifted the timing of some of our marketing spend as we build excitement for the first capsule from our creative director, Heiner Ackerman.

Danny: First as it relates to prepare them for the next stage of our brand and product evolution.

Danny: Through the first half of this fiscal year, we set the foundation for long term product design and development of the US opening a new design studio in Paris from Goldman strong too.

The unveil letter this month.

Danny: While this shift impacted Q2 results, we expect to see benefits from this activity over the second half of the fiscal year, with more marketing dollars at work across several initiatives.

Danny: <unk> hydro and the execution of our product vision.

Danny: We've come a long way of building the infrastructure and capabilities and this is a matter of months and we're now just a few weeks out launching hottest growth capital.

Krista: As a reminder, approximately 75% of our revenue and opportunity is still ahead of us.

Krista: here, based on our historical performance. We remain steadfast in our view that we can drive positive DTC comparable sales growth out of our stores in both the near and the long term.

Danny: Incredibly excited and proud of our teams and the progress that they've made to get us ready for is a very important milestone.

Krista: We are focused on executing with excellence for a busy holiday season and building an enduring brand that connects with our customers.

Danny: Just a couple of weeks ago, we started with Gs hydro capsule with an exclusive launch of iPhone <unk>.

Krista: In the second quarter, we took concrete action for three key operating imperatives to set us up for success.

Danny: Hosted a group of industry Influencers of global media to experience his new collections against one of the most inspiring backdrops in the world.

Krista: That said, due to a softer second quarter and the weaker macro environment around us that has impacted consumer confidence, we will see that we introduce a lower range for guidance.

Danny: Was there myself with the overwhelmingly positive response to this capsule.

Danny: Which will appear under the label sneakers.

Danny: This is the brand name we operated under before we became channel.

Krista: As a reminder, our three operating imperatives are, number one, setting the foundation for the next stage of our brand and product evolution, number two, implementing best-in-class luxury retail execution, and number three, simplifying the way that we operate.

Danny: With this capsule hydro reached deep into our archives the source of inspiration to innovate in both our core and newer product categories.

Danny: This new collection represents where we've come from and where we go and we'll sell alongside Canada Goose's mainland.

Krista: I will share some insight into our first Operating Imperative, we'll touch on some elements of our second and third imperatives, and both will be expanded upon later in the talk.

Danny: <unk> vision and respectful, where we've been mix was neutral Hudson a perfect expression of our future.

Krista: First, as it relates to preparing for the next stage of our brand and product evolution.

Danny: In regard to sort of second and third operating imperatives, we are taking measured steps to simplify the way, we work and advanced our retail execution.

Krista: Through the first half of this fiscal year, we set the foundation for long-term product design and development at Canada Goose, opening our new design studio in Paris, and building a strong team to support Hyder in the execution of our product vision.

Danny: As a result, we are well positioned for our peak selling season.

Danny: On a product where it needs to be a retail network through readying our stores to greet guests as they arrive and offer them element and shopping experiences.

Krista: We've come a long way building the infrastructure and capabilities in just a matter of months, and we are now just a few weeks out of launching HIDA's first capsule.

Danny: You'll hear more about these and other initiatives during today's call.

Danny: When we spoke to you first about our three operating imperative at the beginning of our fiscal year.

Krista: I'm incredibly excited and incredibly proud of our team and the progress that they've made to get us ready for this very important milestone.

Danny: We knew that execution would not be using.

Danny: In the midst of a transformation and transformation of this magnitude takes time.

Krista: Just a couple of weeks ago, we started to tease Hydra's capsule with an exclusive launch in Iceland.

Danny: Especially within the current political backdrop.

Krista: who hosted a group of industry-influenced and global media to experience his new collection against one of the most inspiring backdrops in the world. I was there myself to see the overwhelmingly positive response to his capsule.

Danny: I've spent my entire licenses.

Danny: <unk> and economic cycles come and go but we have proven resilient through the evolution of our business with this understanding we are pushing forward prioritizing intent and focus on driving change for long term impact, which has had some short term impact on our results.

which will appear under the label Snogres.

Krista: This is the brand name we operated under before we became candidates.

Danny: <unk>.

Danny: We are committed to doing the hard things and making the hard decisions to fulfill our brands with central.

Krista: For this council, Haider reached deep into our archives as a source of inspiration to innovate in both our core and newer product categories.

Danny: All of which is underpinned by a resilient business model.

Danny: Our strong brand backed by our deep heritage.

Krista: This new collection represents where we've come from and where we're going and will sit alongside Canada Goose in the mainland.

Danny: Quality and craftsmanship of vertical integration and a deeply committed team.

Danny: As our key operating imperatives and together, we believe that our efforts will drive improvement in our overall business performance and enhance the strength of our brand and with that I'll now turn it over to Karen.

Krista: Pyra's vision and his respect for where we've been makes this new collection a perfect expression of our future.

Speaker Change: In regard to our second and third operating imperatives, we have taken measured steps to simplify the way we work and advance our retail execution.

Karen: Thanks Danny.

Karen: Q2 was a productive quarter as our team continued to execute against our key operating imperatives. While also preparing for peak hour season, we made significant progress on several fronts, which I'm proud of and I'm excited to share with you shortly.

Krista: As a result, we are well-positioned for our peak selling season, from having a product where it needs to be throughout our retail network, to readying our stores to greet guests as they arrive and offer them elevated shopping experiences.

Danny: First though let me start by putting our Q2 DTC comparable sales results into context.

Krista: You will hear more about these and other initiatives during today's call.

Danny: One of our biggest priorities in retail the fiscal is driving comp growth, but this fell short of our expectations in the quarter.

Krista: When we spoke to you first about our three operating imperatives at the beginning of our fiscal year,

Danny: Year over year DTC comp revenue declined 13% as performance in Asia Pacific and North America weighed on overall results.

We knew that execution would not be easy.

Krista: We are in the midst of a transformation, and the transformation of this magnitude takes time.

Danny: While EMEA comp growth was down year over year performance improved sequentially compared to our first quarter.

especially within the current musical backdrop.

I spent my entire life in this industry.

Danny: On a global basis store traffic and conversion declined year over year, while E. Commerce saw increased sessions, yet lower conversion.

Krista: Trends and economic cycles come and go, but we have proven resilience through the evolution of our business. With this understanding, we are pushing forward, prioritizing content and focus on driving change for long-term impact, which has had some short-term impacts on ourselves.

Danny: The exception here was also EMEA, where store traffic was up significantly reflecting the busy summer season in the region.

Danny: We were encouraged to see conversion start to improve across our key regions in September.

Krista: We are committed to doing the hard things and making the hard decisions to fulfill our brand's potential.

Danny: While consumer sentiment weakened during the quarter. Our Q2 performance was further pressured by two decisions. We made in line with our long term strategy are part of the transformation work, we started last year.

all of which is underpinned by a resilient business model.

Krista: A strong brand backed by a deep heritage of quality and craftsmanship, of vertical integration, and a deeply committed team.

Danny: First we made the deliberate decision to implement most of our marketing spend in the second half of fiscal 'twenty five as opposed to previous years, where we typically ramp investments in Q2.

Krista: As our key operating imperatives come together, we believe that our efforts will drive improvement in our overall business performance and enhance the strength of our brand. And with that, I will now turn it over to Carrie.

Danny: This enables us to fully support the launch of Hydrous first capsule ahead of holiday or seasonal strength and showcase our elevated brand expression and consumer engagement strategy during our peak season when it matters most.

Carrie Baker: Thanks Dani. Q2 was a productive quarter as our team continued to execute against our key operating imperatives while also preparing for peak, our season. We made significant progress on several fronts which I'm proud of and I'm excited to share with you shortly.

Danny: <unk> capital is a big brand moment for candidates not just from a product perspective, but also in how our brand comes to life across all touch points.

Carrie Baker: First though, let me start by putting our Q2 DTC Comparable Sales Results into context.

Danny: Driving increased brand momentum is a critical goal this year and while this capital is just the beginning it marks a milestone moment for the brand.

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Carrie Baker: One of our biggest priorities in retail to Cisco is driving comp growth, but they fell short of our expectations in the quarter. Year over year, DTC comp revenue declined 13% as performance in Asia Pacific and North America weighed on overall results.

Danny: Second we are working towards a more productive and curated product assortment focusing on icons and best sellers, while we expand into other categories strategically.

Danny: Compared to previous years, we made a conscious choice to limit the total volume of unicef's season, adding new styles, where they were needed most by building on key product families.

Carrie Baker: While EMEA comp growth was down year over year, performance improved sequentially compared to our first quarter.

Carrie Baker: On a global basis, store traffic and conversion declined year-over-year, while e-commerce saw increased sessions, yet lower conversion.

Danny: The benefit of this decision is we're better able to engage our customers through clear storytelling as well as giving space and focus in our DTC channels to hydro's new designs.

Carrie Baker: The exception here was also a MEO where store traffic was up significantly, reflecting the busy summer event season in the region. We were encouraged to see conversion start to improve across our key regions in September.

Danny: While this means fewer new styles. This season. This decision sets us up to deliver a more strategic offering to drive sales and conversion in the long term.

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Carrie Baker: While consumer sentiment weakened during the quarter, our Q2 performance was further pressured by two decisions we made in line with our long-term strategy, a part of the transformation work we started last year.

Danny: Now, let me share highlights from our Q2 operating imperatives, which aimed to address these performance issues, starting with our product and brand operating imperative.

Danny: From a product perspective, it's no secret that we occupy an enviable position of leadership in delivering the warmest outerwear, but we are fully focused on complementing that with new innovative styles that expand into other categories in season.

Carrie Baker: First, we made the deliberate decision to implement most of our marketing spend in the second half of fiscal 25, as opposed to previous years where we typically wrap investments in Q2.

Carrie Baker: This enables us to fully support the launch of Hydra's first capitol ahead of holiday, our season of strength, and showcase our elevated brand expression and consumer engagement strategies during our peak season, when it matters most.

Danny: Early results are encouraging our spring summer 'twenty four collection was positively received in particular, our apparel and everyday products confirming a significant market opportunity for our full year assortments.

Carrie Baker: Hider's First Capsule is a big brand moment for Canada Youth, not just from a product perspective, but also in how our brand comes to life across all touch points.

Danny: And more recently, we launched our fall winter collection in September, which delivers a more youthful attitude with relevant silhouette and style forward designs that don't compromise on function.

Carrie Baker: Driving increased brand momentum is a critical goal this year, and while this capsule is just the beginning, it marks a milestone moment for the brand.

Danny: October sales results, which are substantially improved over Q2. This collection is resonating.

Carrie Baker: Second, we are working towards a more productive and curated product assortment focusing on icons and bestsellers while we expand into other categories strategically.

Danny: Looking ahead, our category expansion story now includes eyewear as we announced plans to launch our first collection in spring 2025, and partnership with Marshall and eyewear.

Carrie Baker: Compared to previous years, we made a conscious choice to limit the total volume of units this season, adding new styles where they were needed most by building on key product families.

Danny: Our DNA of protection and craftsmanship translate well into eyewear and we're excited to see this category come to life soon.

Danny: Lastly on the product front, we have hired a new head of merchandising who will start early in 2025 to lead and strengthen our long term product strategy. This is a critical role that we have not had in the business for some time and will be a driving force in working with <unk> and his creative vision.

Carrie Baker: The benefit of this decision is we're better able to engage our customers through clear storytelling, as well as giving space and focus in our DDC channels to Heider's new designs.

Carrie Baker: While this means fewer new styles this season, this decision sets us up to deliver a more strategic offering to drive sales and conversion in the long-term.

Danny: Together, they will build a product offering that strengthens the link between market demand and our product roadmap to drive both revenue and margin.

Carrie Baker: Now let me share highlights from our QC Operating Imperatives, which aim to address these performance issues, starting with our Product and Brand Operating Imperatives.

Danny: Turning to marketing activity highlights in Q2, we continued to move the needle on the marketing front and targeted ways. We launched an engaging campaign with our global brand Ambassador and NBA Star Shake Youll, just Alexander which delivered increased earned media significantly subscribers strong social engagement as well as solid commercial results.

Carrie Baker: From a product perspective, it's no secret that we occupy an enviable position of leadership in delivering the warmest outerwear, but we are fully focused on complementing that with new, innovative styles that expand into other categories and seasons. Early results are encouraging.

Carrie Baker: Our Spring-Summer 24 collection was positively received, in particular our apparel and everyday products, confirming the significant market opportunity for a full-year assortment.

Danny: In September we joined the World of live streaming with the opening of a new sales channel on Chinese social platform. Julian. This is a powerful way for us to tell our brand story and engage customers in a more direct way on style and functional aspects of our products.

Carrie Baker: And more recently, we launched our Fall-Winter Collection in September, which delivers a more youthful attitude with relevant silhouettes and style-forward designs that don't compromise on function.

Danny: Our performance in these early days on the Juliet is strong and contributed meaningfully to our Asia Pacific E Commerce revenue in Q2.

Carrie Baker: Based on October sales results, which are substantially improved over Q2, this collection is resonating.

Danny: And we were successful in expanding our audience, both on social and our own community through consistent and targeted engagement, we have grown the number of subscribers by over 30% year over year with the share of E Mail attributed sales in our E. Commerce revenue also growing significantly.

Carrie Baker: Looking ahead, our category expansion story now includes eyewear, as we announced plans to launch our first collection in Spring 2025 in partnership with Marchand Eyewear. Our DNA of protection and craftsmanship translate well into eyewear, and we're excited to see this category come to life soon.

Danny: In the near term our attention and focus is on creating excitement for hydrous capsule in our Boulder brand expression overall and sustained that momentum through commercial and regional campaigns that also drive demand for our mainline collection.

Carrie Baker: Lastly on the product front, we have hired a new head of merchandising who will start early in 2025 to lead and strengthen our long-term product strategy. This is a critical role that we have not had in the business for some time and will be a driving force in working with Heider and his creative vision.

Speaker Change: The expedition, we led in Iceland that Danny mentioned earlier reflects our experience first marketing strategy designed to make impressions not buy them.

Carrie Baker: Together, they will build a product offering that strengthens the link between market demand and our product roadmap to drive both revenue and margin.

Speaker Change: The capsule campaign that follows will build on our authenticity and credibility as an experiential brand amplify globally through a robust marketing campaign with investments throughout the funnel, including digital and out of home campaign regional events and impactful retail theater.

Carrie Baker: Turning to Marketing Activity Highlights. In Q2, we continue to move the needle on the marketing front in targeted ways.

Carrie Baker: We launched an engaging campaign with our global brand ambassador and NBA star Shea Gilgis-Alexander, which delivered increased earned media, significant new subscribers, strong social engagement, as well as solid commercial results.

Danny: Early data coming out of our campaign indicates that brand momentum is building reflected through the level of earned media impressions globally growth in our social following an increase in U S search demand and continued growth of our membership base.

Carrie Baker: In September, we joined the world of live streaming with the opening of a new sales channel on Chinese social platform Douyin. This is a powerful way for us to tell our brand story and engage customers in a more direct way on style and functional aspects of our products.

Danny: Another critical component of our brand and product evolution imperative is our wholesale strategy our efforts to elevate the wholesale shopping experience started nearly 18 months ago and began to bear fruit in Q2 key.

Danny: Key second quarter achievements include positive sell through with our top partners in EMEA, our largest fulfill market, which reverses prior year trends are.

Carrie Baker: Our performance in these early days of due years is strong and contributed meaningfully to our Asia-Pacific e-commerce revenue in Q2.

Carrie Baker: And we were successful in expanding our audience, both on social and our own community. Through consistent and targeted engagement, we have grown the number of subscribers by over 30% year-over-year, with the share of email-attributed sales in our e-commerce revenue also growing significantly.

Danny: Our brand was better position within strategic wholesale partners, including amend pop up and gallery Lafayette alongside luxury peers, resulting in significantly higher sales compared to the same period last year.

Danny: We also made significant progress in reducing the availability of our product with wholesale distributors that have historically not treated our product and our brand aligned way.

Danny: This has resulted in considerable improvement of our full price positioning.

Danny: We also experienced solid travel retail growth as we gained deeper experience in this relatively new channel and last but not least in October we introduced an elevated and bold visual expression at Selfridges in London, having just launched the polar bears international pop up experience and taking over the entire window displays with our fall winter collection, where.

Carrie Baker: The exhibition we led in Iceland that Dani mentioned earlier reflects our experience-first marketing strategy, designed to make impressions, not buy them.

Carrie Baker: The capsule campaign that follows will build on our authenticity and credibility as an experiential brand, amplified globally through a robust marketing campaign with investments throughout the funnel, including digital and out-of-home campaigns, regional events, and impactful retail theatre.

Danny: Pleased with the progress we've made in our wholesale business and are on track to deliver our full year outlook for this channel.

Danny: Finally, let me touch on our second operating imperatives implementing best in class retail execution and.

Carrie Baker: Early data coming out of our campaign indicates that brand momentum is building, reflected through the level of earned media impressions globally, growth in our social following, an increase in U.S. search demand, and continued growth of our membership base.

Danny: In Q2, we grew our permanent retail store network opening two new stores in Montreal, Canada in Wuhan, China and converted two temporary phases into permanent stores, one in Birmingham, UK and one in Shanghai, China. This brings our permanent store count to 72.

Carrie Baker: Another critical component of our brand and product evolution imperative is our wholesale strategy. Our efforts to elevate the wholesale shopping experience started nearly 18 months ago and began to bear fruit in Q2.

Danny: We also expanded our store in Tokyo luxury epicenter, the Ginza district, which now provides guests with an elevated flagship experience, including a beautiful VIP space and a renowned coltrane.

Carrie Baker: Key second quarter achievements include positive sell-throughs with our top partners in EMEA, our largest wholesale market, which reverses prior year trends.

Danny: Last quarter, we laid out three streams of work to level of execution across our retail network first boosting our sales training second strengthening store operations and third improving product availability.

Carrie Baker: Our brand was better positioned within strategic wholesale partners, including a men's pop-up in Gallery Lafayette alongside luxury peers, resulting in significantly higher sales compared to the same period last year.

Carrie Baker: We also made significant progress in reducing the availability of our product with wholesale distributors that have historically not treated our product in a brand-aligned way. This has resulted in considerable improvement of our full price positioning.

Danny: Our efforts here through the first half of the year has ensured our stores are well prepared to capitalize on the selling opportunities throughout our peak season. They are well stocked with labor optimized for weekend traffic employees are well trained to deliver that Canadian warmth experience and our floors are well stocked for customers to find the products they're looking for.

Carrie Baker: We also experienced solid travel retail growth as we gained deeper experience in this relatively new channel.

Carrie Baker: And last but not least, in October we introduced an elevated and bold visual expression at Selfridges in London, having just launched a Polar Bears International pop-up experience and taking over the entire window displays with our fall-winter collection.

Danny: As mentioned earlier, we saw the most prominent evidence of this preparation in our EMEA stores, where these initiatives were quickly implemented across the regional network and have led to steadily improving conversion.

Danny: With a much larger store base, it's taking a little longer in North America, but we are applying that same playbook for success, there and also in Asia Pacific.

Carrie Baker: We're pleased with the progress we've made in our wholesale business and are on track to deliver our full-year outlets for this channel.

Danny: We've made tremendous progress in the first half of our fiscal and we are far from done as our journey of transformation continues at.

Carrie Baker: Finally, let me touch on our second operating imperative, implementing best-in-class retail execution.

Carrie Baker: In Q2, we grew our permanent retail store network, opening two new stores in Montreal, Canada, and Wuhan, China, and converted two temporary spaces into permanent stores, one in Birmingham, UK, and one in Shanghai, China. This brings our permanent store count to 72.

Danny: The change of this magnitude takes time, but we are on the right path.

Speaker Change: Near term headwinds aside we know what we're capable of delivering in Q3 and we are full steam ahead I'll now pass it over to Pat.

Pat: Thanks, Carrie and good morning all.

Carrie Baker: We also expanded our store in Tokyo's luxury epicenter, the Ginza District, which now provides guests with an elevated flagship experience including a beautiful VIP space and a renowned cold room.

Pat: Our third operating imperative and fiscal 'twenty five is to simplify and focus the way we operate as an organization.

Speaker Change: We are doing this through internal operating excellence and focused capital deployment we've.

Speaker Change: We've made good progress on both of these fronts in our second quarter, which I will take you through now.

Speaker Change: Starting with achieving operating excellence.

Danny: In Q2, we continued to simplify the way we work and ensure our spending while investing in key areas to drive growth through the business.

Carrie Baker: Our efforts here through the first half of the year have ensured our stores are well-prepared to capitalize on the selling opportunities throughout our peak season. They are well-staffed with labor optimized for weekend traffic. Employees are well-trained to deliver that Canadian warmth experience.

Danny: To share some examples.

Danny: We've been aggressively reviewing our third party vendors, which has resulted in the renegotiation or cancellation of numerous contracts in the first half of the year and yielded significant savings.

Carrie Baker: And our floors are well stocked for customers and the products they're looking for.

Danny: We also continue to evolve our teams in ways that reduce cost and improve their effectiveness.

Carrie Baker: I mentioned earlier we saw the most prominent evidence of this preparation in our EMEA stores where these initiatives were quickly implemented across the regional network and have led to steadily improving conversion.

Danny: We continue to prudently manage our head count hiring for only the most critical roles as we exercise discipline over our cost base, while we've been hiring since the workforce reductions we implemented at the end of our last fiscal year. In March we have also been very judicious about when and whether walls are truly needed.

Carrie Baker: With a much larger store base, it's taking a little longer in North America, but we are applying that same playbook for success there and also in Asia Pacific.

Carrie Baker: We've made tremendous progress in the first half of our fiscal, and we are far from done as our journey of transformation continues.

Danny: Our actions drove efficiency with our Q2 SG&A expenses decreasing year over year.

Carrie Baker: A change of this magnitude takes time, but we are on the right path.

Danny: This occurred despite investments in critical areas, such as technology infrastructure and product design, including scaling up the team in our Paris design studio.

Carrie Baker: Near-term headwinds aside, we know what we are capable of delivering in Q3, and we are full steam ahead. I'll now pass it over to Beth.

Danny: However, it is important to note that due to slower topline growth SG&A as a percentage of revenue increased year over year after normalizing for adjustments in both periods.

Thanks, Carrie. And good morning all.

Beth: Our third operating imperative in Fiscal 25 is to simplify and focus the way we operate as an organization.

Danny: We acknowledge the importance of popular and we are not satisfied with this outcome.

Carrie Baker: We are doing this through internal operating excellence and focused capital deployment.

Danny: However, we believe our focused investment and cost management strategies position us well to improve SG&A as a percent of revenue as we drive sales growth in the coming quarters.

Carrie Baker: We've made good progress on both of these fronts in our second quarter, which I'll take you through now.

starting with Achieving Operating Excellence.

Danny: We intend to continue implementing specific cost optimization initiatives and remain disciplined in allocating resources to investments that directly support revenue growth no matter the market conditions.

Carrie Baker: In Q2, we continue to simplify the way we work and ensure our spending is lean while investing in key areas to drive growth through the business.

to share some examples.

Danny: We expect these actions plus the scaling of revenue to yield tangible improvements in SG&A efficiency.

Carrie Baker: We've been aggressively reviewing our third-party vendors, which has resulted in the renegotiation or cancellation of numerous contracts in the first half of the year and yielded significant savings.

Danny: Next I'll speak about focused capital deployment.

Danny: As Youll recall, we made a decision to open a smaller number of stores in fiscal 'twenty five while we focus on our existing base.

Carrie Baker: We also continue to evolve our teams in ways that reduce costs and improve their effectiveness.

Danny: This plus our general conservatism on capital deployment as resulted in our capex declining significantly year over year in the second quarter, even while we invest in critical areas that drive revenue and strengthened the foundations of our business to support speed and scale.

Carrie Baker: We continue to prudently manage our headcount, hiring for only the most critical roles as we exercise discipline over our cost base.

Carrie Baker: While we've been hiring since the workforce reductions we implemented at the end of our last fiscal year in March, we have also been very judicious about when and whether roles are truly needed.

Danny: We also made significant progress in right sizing our inventory levels inventory at the end of our second quarter decreased 9% year over year, an acceleration from a 7% year on year decrease at the end of Q1. It also marks our fourth consecutive quarter of decreasing our year over year inventory balance.

Carrie Baker: Our actions drove efficiency with our Q2 FG&A expenses decreasing year over year. This occurred despite investment in critical areas, such as technology, infrastructure, product design, including scaling up the team in our Paris design studio.

Danny: We realize this by temporarily lowering production levels with both our third party contract manufacturing partners and in our own facilities.

Carrie Baker: However, it's important to note that due to slower top-line growth, SG&A as a percent of revenue increased year-over-year after normalizing for adjustments in both periods.

Danny: We supplemented that with friends and family sales to continue exiting slow moving inventory and non carryover styles.

Carrie Baker: We acknowledge the importance of proxy leverage, and we are not satisfied with this outcome.

Danny: This resulted in a 0.9 times inventory turnover for the 12 month period, ending September 29, 2024% to 13% improvement year over year accelerating from a 6% year on year improvement last quarter.

Carrie Baker: However, we believe our focused investment and cost management strategies position us well to improve SG&A as a percent of revenue as we drive sales growth in the coming quarters.

Carrie Baker: We intend to continue implementing specific cost optimization initiatives and remain disciplined in allocating resources to investments that directly support revenue growth, no matter the market conditions.

Danny: We expect to see continued movement in our inventory turnover in the second half of the year as demand increases in our peak season, and our sales ramp up.

Carrie Baker: We expect these actions, plus the scaling of revenue, to yield tangible improvements in XG&A efficiency.

Danny: All of our efforts contributing to improved inventory help with in our operations and across our channels.

Next, I'll speak about focused capital deployment.

Danny: As we achieve those goals we are gradually re scaling our production capacity to support both this year's peak season, and next fiscal year, while still staying focused on improving inventory turns.

Carrie Baker: As you'll recall, we made a decision to open a smaller number of stores in fiscal 25 while we focus on our existing base.

Carrie Baker: This, plus our general conservatism on capital deployment, has resulted in our CapEx declining significantly year-over-year in the second quarter, even while we invest in critical areas that drive revenue and strengthen the foundations of our business to support speed and scale.

Danny: Overall, we're pleased with the progress made in simplifying our operations and deploying our capital responsibly in Q2.

Danny: We are committed to identifying and implementing further changes on an ongoing basis as we evolve our culture and internalized discipline and efficiency across the organization.

Carrie Baker: We also made significant progress in right sizing our inventory levels. Inventory at the end of our second quarter decreased 9% year-over-year. An acceleration from a 7% year-over-year decrease at the end of 2 months. It also marks our 4th consecutive quarter of decreasing our year-over-year inventory balance.

Speaker Change: I'll now pass it over to Neil to discuss our Q2 financial performance and outlook.

Neil: Thanks Pat.

Neil: As you've heard so far today, we are making good progress across our execution leavers I will start with reviewing our second quarter financial performance and then discuss our updated outlook.

Carrie Baker: We realize this by temporarily lowering production levels with both our third-party contract manufacturing partners and in our own facilities.

Speaker Change: Revenue in Q2 was down 5% year over year or 6% on a constant currency basis due to a decline in DTC revenue and a planned decrease in wholesale rate, partially offset by an increase in other channels revenue.

Carrie Baker: We supplemented that with friends and family sales to continue exiting slow-moving inventory and non-carryover styles.

Carrie Baker: This resulted in a 0.9x inventory turnover for the 12-month period ending September 29, 2024, a 13% improvement year-over-year, accelerating from a 6% year-on-year improvement last quarter. We expect to see continued movement in our inventory turnover in the second half of the year as demand increases in our peak season and our sales ramp up.

Danny: First I will describe our regional performance on a year over year constant currency basis.

Danny: North America revenue decreased 3% on lower DTC and wholesale revenue, partially offset by higher sales activity in the other channels, primarily friends and family events.

Danny: Asia Pacific revenue grew 3%, mainly due to higher travel retail revenue in greater China, which is included in our wholesale business, partially offset by lower D to C. In the region.

Carrie Baker: All of our efforts are contributing to improved inventory health within our operations and across our channels.

Carrie Baker: As we achieve those goals, we are gradually rescaling our production capacity to support both this year's peak season and the next fiscal year, while still staying focused on improving inventory terms.

Danny: And revenue in EMEA was down 17%, primarily due to a planned decrease in wholesale revenue.

Speaker Change: Thank you for watching. Don't forget to like, comment, and subscribe!

Danny: From a channel perspective second quarter, DTC revenue was down 5% or 6% on a constant currency basis due to softer demand in both our in store and e-commerce channels.

Danny: <unk> comparable sales were down 13% year over year due to the factors carried discussed earlier that impacted both traffic and conversion in the quarter.

Carrie Baker: I'll now pass it over to Neil to discuss our Q2 financial performance and outlook.

Danny: August and September with a more challenging months in the quarter as consumer sentiment weakened.

Thanks, Beth.

Neil Bowden: As you've heard so far today, we are making good progress across our execution levers.

Danny: It's worth repeating that despite consumer caution in our markets, we believe that being somewhat quieter in marketing and head of the hydro capsule launch later this fall in traffic as well.

Speaker Change: I'll start with reviewing our second quarter financial performance and then discuss our updated outlook.

Carrie Baker: Revenue in Q2 was down 5% year-over-year, or 6% on a constant currency basis, due to a decline in D2C revenue and a planned decrease in wholesale revenue, partially offset by an increase in other-channel revenue.

Danny: We began to see some improvement towards the end of September as we started to ramp up our marketing investments with the second drop of our fall winter collection and the kickoff of the snow Goose campaign.

Danny: I'd like to point out the Golden week was a bright spot for us with revenue in mainland China better than last year for a seven day period.

Carrie Baker: First, I will describe our regional performance on a year-over-year constant currency basis.

Danny: While this is one week out of a full quarter and not an indicator of the total period. It does demonstrate the strength of our brand in China.

Carrie Baker: North America revenue decreased 3% on lower D2C and wholesale revenue, partially offset by higher sales activity in the other channel, primarily friends and family events.

Danny: Our focus continues to be on the day in day out retail execution and our expectation continues to be that these actions will result in positive comparable sales growth in fiscal 'twenty five.

Carrie Baker: Asia Pacific revenue grew 3%, mainly due to higher travel retail revenue in greater China, which is included in our wholesale business.

Danny: We've seen the trajectory improvement to positive comparable sales growth in October and several of our stores in mainland China EMEA, the U S and Canada, although pockets of consumer pressure remain throughout those markets.

Carrie Baker: partially offset by lower D2C in the region, and revenue in EMEA down 17% primarily due to a planned decrease in wholesale revenue.

Carrie Baker: From a channel perspective, second quarter DTC revenue was down 5% or 6% on a constant currency basis due to softer demand in both our in-store and e-commerce channels.

Danny: Online performance is lagging somewhat though it is being bolstered by the launch of <unk> and some early singles day sales in mainland China.

Danny: Mainland China performed well in October leading to a low single digit increase in total DTC comparable sales growth for the month.

Speaker Change: D to C comparable sales were down 13% year over year due to the factors Carrie discussed earlier that impacted both traffic and conversion in the quarter.

Danny: Q2, wholesale revenue was down 15% or 17% on a constant currency basis, reflecting our planned lower order book as we elevate the quality of this channel.

Carrie Baker: August and September were the more challenging months of the quarter as consumer sentiment weakened.

Carrie Baker: It's worth repeating that despite consumer caution in our markets, we believe that being somewhat quieter on marketing ahead of the Hyder capsule launch later this fall dampened traffic as well.

Danny: For the first half of the year wholesale revenue was down 21%, which is in line with our full year outlook.

Danny: While the North American and EMEA order books are smaller year over year as planned.

Carrie Baker: We began to see some improvement toward the end of September, as we started to ramp up our marketing investment. We began to see some improvement toward the end of September, as we started to ramp up

Danny: There is improvement in both greater China, and Korea, as we deepen our wholesale relationships, especially in key travel retail locations such as Hainan Island in airports.

Carrie Baker: with the second drop of our fall-winter collection and the kickoff of the Snow Goose campaign.

Carrie Baker: I would like to point out that Golden Week was a bright spot for us, with revenue in mainland China better than last year for a seven-day period.

Danny: Despite continued uncertainty about traditional and pure play digital wholesale partners channel inventory is significantly improved year over year.

Carrie Baker: While this is one week out of a full quarter, and not an indicator of the total period, it does demonstrate the strength of our brand in China.

Speaker Change: We're seeing stronger commercial alignment as you heard from Gary about the brand's representation at our partners. This gives us optimism about this channel moving forward.

Thank you.

Carrie Baker: Our focus continues to be on the day-in, day-out retail execution.

Carrie Baker: And our expectation continues to be that these actions will result in positive comparable sales growth in fiscal 25.

Speaker Change: Revenue in our other channels segment increased to $26 6 million in Q2 of fiscal 'twenty five up from $9 7 million in Q2 of fiscal 'twenty four primarily due to an increase in friends and family sales to exit slower moving and discontinued inventory.

We've seen a trajectory improvement.

Carrie Baker: positive comparable sales growth in October in several of our stores in mainland China, India, the US, and Canada.

Although pockets of consumer pressure remain throughout those markets.

Speaker Change: We expect to be much quieter on this front in the third quarter and are evaluating opportunities in early calendar 2025.

Carrie Baker: Online performance is lagging somewhat though it is being bolstered by the launch of Douyin and some early single-day sales in mainland China.

Speaker Change: In addition, we are positive improvements from third party sales from the Knitwear manufacturing facility. We acquired in Q3 of fiscal 'twenty, four and employee sales for which we implemented a new program in Q3 of fiscal 'twenty four.

Carrie Baker: Mainland China performed well in October leading to a low single-digit increase in total B2C comparable sales growth for the month.

Carrie Baker: Q2 Wholesale Revenue was down 15% or 17% on a constant currency basis reflecting our planned lower order book as we elevate the quality of this channel.

Speaker Change: Let's now turn to gross profit.

Speaker Change: Our second quarter gross profit decreased by 9% year over year.

Speaker Change: Gross margin declined 260 basis points to 61, 3%, primarily due to a higher proportion of non heavy weighed down revenue within our product mix.

Carrie Baker: For the first half of the year, wholesale revenue was down 21%, which is in line with our full year outlook.

Carrie Baker: While the North American and EMEA order books are smaller year-over-year as planned,

Speaker Change: We expect to expand gross margin over the balance of the fiscal year driven by a more favorable D to C channel mix lapping both the acquisition of our European Knitwear manufacturer and introduction of our updated employee sales program complemented by further cost efficiencies on production labor and more favorable overhead absorption than planned.

Carrie Baker: There is improvement in both Greater China and Korea as we deepen our wholesale relationships, especially in key travel retail locations such as Hainan Island and airports.

Carrie Baker: Despite continued uncertainty about traditional and pure play digital wholesale partners, channel inventory is significantly improved year-over-year.

Speaker Change: Moving further down the P&L, our adjusted EBIT was $2 5 million, which was down from $15 6 million in the second quarter of last year, while we reduced overall SG&A expenses by nearly $15 million topline pressure resulted in a lower adjusted EBIT and lower adjusted EBIT margin.

Carrie Baker: We are seeing stronger commercial alignment, as you heard from Carrie, about the brand's representation and our partners.

This gives us optimism about this channel moving forward.

Carrie Baker: Revenue in our other channel segment increased to $26.6 million in Q2 of Fiscal 25, up from $9.7 million in Q2 of Fiscal 24, primarily due to an increase in friends and family sales to exit slower-moving and discontinued inventory.

Speaker Change: We've mentioned several ongoing initiatives aimed at driving the top line, while also demonstrating discipline in managing our cost base.

Speaker Change: Lower SG&A in Q2 was primarily due to lower corporate SG&A spend and a shift in timing of our marketing spend to the back half of this fiscal year. This was primarily offset by higher costs associated with operating 10, more permanent stores year over year and increased technology and design studio investments.

Carrie Baker: We expect to be much quieter on this front in the third quarter and are evaluating opportunities in early calendar 2025.

Carrie Baker: In addition, we have positive improvements from third-party sales from the knitwear manufacturing facility we acquired in Q3 of Fiscal 24, and employee sales, for which we implemented a new program in Q3 of Fiscal 24.

Speaker Change: The decreases in corporate SG&A spend was primarily due to savings that resulted from the workforce reductions implemented in fiscal 'twenty, four and significant costs associated with our transformation program in Q2 last year, which was included in our reported results are excluded from adjusted EBIT.

Let's now turn to gross profit.

Our second quarter gross profit decreased by 9% year-over-year.

Carrie Baker: Gross margin declined 260 basis points to 61.3%, primarily due to a higher proportion of non-heavy weight down revenue within our product mix.

Speaker Change: Lastly on the income statement.

Speaker Change: Q2, adjusted net income attributable to shareholders was $5 2 million or <unk> <unk> per diluted share compared to $16 2 million or <unk> 16 per diluted share in Q2 fiscal 'twenty four.

Carrie Baker: We expect to expand gross margin over the balance of the fiscal year, driven by a more favorable D to C channel mix, lapping both the acquisition of a European knitwear manufacturer and introduction of our

Carrie Baker: updated employee sales program complemented by further cost efficiencies on production labor and more favorable overhead absorption we planned.

Speaker Change: Turning to our balance sheet.

Speaker Change: At the end of the quarter inventory was $473 million down 9% year over year, driven by a noticeable decrease in finished goods.

Thank you very much.

Carrie Baker: Moving further down the P&L, our adjusted EBIT was $2.5 million, which was down from $15.6 million in the second quarter of last year. While we reduced overall SG&A expenses by nearly $15 million, top-line pressure resulted in a lower adjusted EBIT and lower adjusted EBIT margin.

Speaker Change: We ended the quarter with $826 million of net debt compared with $852 million at the end of the second quarter of fiscal 'twenty. Four we ended the period with approximately $282 million in unused borrowing capacity on our revolving credit facility.

Carrie Baker: We've mentioned several ongoing initiatives aimed at driving the top line while also demonstrating discipline and managing our cost base.

Speaker Change: Our net debt leverage at the end of the second quarter was two nine times adjusted EBITDA compared with three three times at the same time last year.

Carrie Baker: Lower SG&A in Q2 was primarily due to lower corporate SG&A spend and a shift in timing of our marketing spend to the back half of this fiscal year. This was primarily offset by higher costs associated with operating 10, more permanent stores year over year and increased technology and design studio investments.

Carrie Baker: Lower SG&A in Q2 was primarily due to lower corporate SG&A spend and a shift in timing of our marketing spend to the back half of this fiscal year. This was primarily offset by higher costs associated with operating 10 more permanent stores year-over-year and increased technology and design studio investments.

Speaker Change: We expect to end the year with leverage below historical levels.

Speaker Change: As a reminder, our capital allocation priorities towards driving shareholder value, our first to invest in organic growth opportunities, including brand and product development as well as in the expansion of our retail network second to invest in the foundational needs of the business like leveling up our technology and third to ensure we have an efficient.

Carrie Baker: The decreases in corporate SG&A spend was primarily due to savings that resulted from the workforce reduction implemented in fiscal 'twenty, four and significant costs associated with our transformation program in Q2 last year, which was included in our reported results and excluded from adjusted EBIT.

Carrie Baker: Decreases in corporate SG&A spend was primarily due to savings that resulted from the workforce reductions implemented in Fiscal 24 and significant costs associated with a transformation program in Q2 last year, which was included in our reported results and excluded from adjusted EBIT.

Speaker Change: Capital structure.

Speaker Change: Turning now to our fiscal 2025 financial outlook.

Carrie Baker: Lastly on the income statement.

Speaker Change: While our revenue for the first half of fiscal 'twenty five is largely in line with our forecast our DTC business has performed below our expectations.

Carrie Baker: Q2, adjusted net income attributable to shareholders was $5 2 million or <unk> <unk> per diluted share compared to $16 2 million or <unk> 16 per diluted share in Q2 fiscal 'twenty four.

Carrie Baker: Lastly, on the income statement, Q2 adjusted net income attributable to shareholders was $5.2 million, or $0.05 per diluted share, compared to $16.2 million, or $0.16 per diluted share, in Q2 Fiscal 24.

Speaker Change: Considering the weakening in consumer sentiment since we provided our initial outlook in may in our first half performance. We are taking the prudent decision to introduce a bottom range to our full year fiscal 'twenty five guidance.

Carrie Baker: Turning to our balance sheet.

Carrie Baker: At the end of the quarter inventory was $473 million down 9% year over year, driven by a noticeable decrease in finished goods.

Turning to our balance sheet.

At the end of the quarter, inventory was $473 million.

Speaker Change: Full year fiscal 'twenty five revenue is expected to range between an increase in the low single digits to a low single digit decline compared to fiscal 'twenty four.

Carrie Baker: down 9% year-over-year, driven by a noticeable decrease in finished goods.

Carrie Baker: Ended the quarter with $826 million of net debt compared with $852 million at the end of the second quarter of fiscal 'twenty. Four we ended the period with approximately $282 million in unused borrowing capacity on our revolving credit facility.

I'm sorry. I'm sorry. I'm sorry. I'm sorry.

Carrie Baker: We ended the quarter with $826 million of net debt compared with $852 million at the end of the second quarter of fiscal 24. We ended the period with approximately $282 million in unused borrowing capacity on our revolving credit facility.

Speaker Change: We expect DTC comparable sales to also move in a similar range this year versus the prior year.

Speaker Change: We continue to expect wholesale revenue to decrease 20% year over year, which is unchanged from our initial outlook.

Carrie Baker: Our net debt leverage at the end of the second quarter was two nine times adjusted EBITDA.

Carrie Baker: Our net debt leverage at the end of the second quarter was 2.9 times adjusted EBITDA compared with 3.3 times at the same time last year.

Speaker Change: Our gross margin outlook is also unchanged, which we expect will remain similar in fiscal 'twenty five compared to the previous year.

Carrie Baker: Paired with three three times at the same time last year.

Carrie Baker: We expect to end the year with leverage below historical levels.

Carrie Baker: We expect to end the year with leverage below historical levels.

Speaker Change: Due to the lower range, we are providing on the topline we expect non <unk> adjusted EBIT margin to range between an increase of 60 basis points to a decline of 60 basis points over the prior year.

Carrie Baker: As a reminder, our capital allocation priorities towards driving shareholder value, our first to invest in organic growth opportunities, including brand and product development as well as in the expansion of our retail network second to invest in the foundational needs of the business like leveling up our technology and third to ensure we have an.

Carrie Baker: As a reminder, our capital allocation priorities towards driving shareholder value are first to invest in organic growth opportunity, including brand and product development, as well as in the expansion of our retail network.

Speaker Change: We have lowered the top end of our adjusted EBIT margin range from the 100 basis point increase in our initial outlook.

Carrie Baker: Second, to invest in the foundational needs of the business, like leveling up our technology. And third, to ensure we have an efficient capital structure.

Speaker Change: To reflect our increased investments in marketing activities compared to what we planned at the onset of the year.

Carrie Baker: <unk> capital structure.

Carrie Baker: Turning now to our fiscal 2025 financial outlook.

Speaker Change: And the change in our expected regional revenue mix towards Asia Pacific We.

Turning now to our Fiscal 2025 Financial Outlook.

Carrie Baker: While our revenues for the first half of fiscal 'twenty five is largely in line with our forecast our DTC business has performed below our expectations.

Speaker Change: We expect the lower mix contribution and DTC comparable sales from North America, and EMEA to compress margins given the higher fixed cost structures in these regions, particularly in our stores.

Carrie Baker: While our revenue for the first half of fiscal 25 is largely in line with our forecast, our D2C business has performed below our expectations.

Carrie Baker: Considering the weakening in consumer sentiment since we provided our initial outlook in may in our first half performance.

Carrie Baker: Considering the weakening in consumer sentiment since we provided our initial outlook in May and our first half performance, we're taking a prudent decision to introduce a bottom range to our full year fiscal 25 guidance.

Speaker Change: As a result, we expect non <unk> adjusted net income per diluted share to increase in the mid single digit range with approximately 98 million shares and weighted average diluted shares outstanding.

Carrie Baker: We're taking the prudent decision to introduce a bottom range to our full year fiscal 'twenty five guidance.

Carrie Baker: Full year fiscal 'twenty five revenue is expected to range between an increase in the low single digits to a low single digit decline compared to fiscal 'twenty four.

Carrie Baker: Full year fiscal 25 revenue is expected to range between an increase in the low single digits to a low single digit decline compared to fiscal 24. We expect D to C comparable sales to also move in a similar range this year versus the prior year.

Speaker Change: Let me remind you 75% of our revenue is historically recorded in the back half of our fiscal year and we are relentlessly working to drive positive comparable sales growth over that period.

Carrie Baker: We expect you to see comparable sales to also move in a similar range this year versus the prior year.

Carrie Baker: We continue to expect wholesale revenue to decrease 20% year over year, which is unchanged from our initial outlook.

Speaker Change: To close out today's prepared remarks had underscore that we're encouraged by the progress we're making to transform our operations and to evolve engagement with the Canada Goose brand despite difficult macro conditions.

Carrie Baker: Our gross margin outlook is also unchanged, which we expect will remain similar in fiscal 'twenty five compared to the previous year.

Speaker Change: Let me reiterate that the transformation of this magnitude takes time and things are moving in the right direction as we build stronger connections with our consumers and deliver elevated shopping experience. Our team is deeply engaged in executing across our three operating imperatives with an immediate focus on delivering sales during our peak season.

Carrie Baker: Due to the lower range, we are providing on the topline we expect non <unk> adjusted EBIT margin to range between an increase of 60 basis points to a decline of 60 basis points over the prior year.

Carrie Baker: We have lowered the top end of our adjusted EBIT margin range from the 100 basis point increase in our initial outlook.

Speaker Change: We continue to test and learn and unlock opportunities across our brand product and D to C execution and are confident in our ability to stabilize our revenue base, leading to improved and sustainable growth and profitability in the near and long term.

Carrie Baker: To reflect our increased investments in marketing activities compared to what we planned at the onset of the year.

Carrie Baker: And the change in our expected regional revenue mix towards Asia Pacific We.

Carrie Baker: We expect the lower mix contribution and DTC comparable sales from North America, and EMEA to compress margins given the higher fixed cost structures in these regions, particularly in our stores.

Speaker Change: With that I'll open the call up for questions.

Speaker Change: Thank you we will now begin the question and answer session. If you would like to ask a question. Please press star one on your telephone keypad to raise your hand and join the queue and if you'd like to withdraw that question again press star one and we ask that you. Please limit yourself to one question and one follow up.

Carrie Baker: As a result, we expect non <unk> adjusted net income per diluted share to increase in the mid single digit range with approximately 98 million shares and weighted average diluted shares outstanding.

Carrie Baker: Let me remind you 75% of our revenue historically recorded in the back half of our fiscal year and we are relentlessly working to drive positive comparable sales growth over that period.

Speaker Change: Your first question comes from the line of Adrienne <unk> with Barclays. Please go ahead.

Adrienne: Good morning, and thank you for all the detail on the color Denny I guess.

Carrie Baker: To close out today's prepared remarks, and underscore that we're encouraged by the progress, we're making to transform our operations and to evolve engagement with the Canada Goose brand despite difficult macro conditions.

Adrienne: Where the macro aside and advertise setting everybody back let's call it a year and it's not specific it's macro generally.

Adrienne: But as we think about kind of the things that you can control.

Carrie Baker: Let me reiterate what a transformation of this magnitude takes time and things are moving in the right direction as we build stronger connections with our consumers and deliver elevated shopping experiences are team is deeply engaged in executing across our three operating imperatives with an immediate focus on delivering sales during our peak season.

Adrienne: Let's say the the notion that we kind of want to move some of the seasonality and not have so much concentrated in the back two quarters of the year expansion into other categories.

Adrienne: Non non more of the seasonally adjusted kind of like apparel for other season can you talk about what the business looks like by channel mix and by region.

Carrie Baker: We continue to test and learn and unlock opportunities across our brand product and DTC execution and are confident in our ability to stabilize our revenue base, leading to improved and sustainable growth and profitability in the near and long term.

Adrienne: Winter versus non.

Adrienne: The non seasonal apparel and in three to five years. So just kind of maybe like a re landscape that LLP that you had given us probably pre pandemic I think as a whole.

Speaker Change: With that I'll open the call up for questions.

Speaker Change: Just to recalibrate, where we are in that cycle. Thank you so much.

Speaker Change: Thank you we will now begin the question and answer session. If you would like to ask a question. Please press star one on your telephone keypad to raise your hand and join the queue.

Speaker Change: Yes. Thank you for your question.

Speaker Change: And I'll ask you some higher level commentary and color on the future I mean, I think that.

Speaker Change: Know that our opportunity remains tremendous and we know that our brand is extremely strong through multiple lines of research through inventory and we're very excited about that.

Speaker Change: And if you'd like to withdraw that question again press star one.

Carrie Baker: Ask that you please limit yourself to one question and one follow up.

Speaker Change: Your first question comes from the line of Adrienne <unk> with Barclays. Please go ahead.

Speaker Change: Sure.

Speaker Change: Corn product evolution point of view we've evolved.

Speaker Change: Good morning, and thank you for all the detail on the color Denny I guess.

Speaker Change: As you've seen in quite a bit over the last.

Speaker Change: A number of years and the plans for that for that to continue.

Carrie Baker: No.

Carrie Baker: There is the macro aside and advertise setting everybody back let's call. It a year and it's not specific it's just macro generally.

Speaker Change: We are in a merchandiser, joining us soon which will really help with that and.

Speaker Change: And.

Speaker Change: With our new design studio in Paris, which is.

Carrie Baker: But as we think about kind of the things that you can control.

Speaker Change: To me one of the biggest biggest banker during this year with some platform homeowner maintenance to drive this business forward and we're really going to Armstrong.

Carrie Baker: Let's say the the notion that we kind of want to move some of the seasonality and not have so much concentrated in the back two quarters of the year expansion into other categories.

Speaker Change: The strong design Xyrem product.

Speaker Change: No.

Carrie Baker: Non non more of the seasonally adjusted kind of like apparel for other season can you talk about what the business looks like by channel mix and by region.

Speaker Change: So coming out of that facility.

Speaker Change: Which works going to of course their design capabilities here in Toronto and manufacturing capabilities in Canada. So I do believe that.

Speaker Change: Our vision is to see our product line expand quite considerably.

Carrie Baker: Winter versus non.

Carrie Baker: Non seasonal apparel and in three to five years. So just kind of maybe like a re landscape that MRP that you had given us probably pre pandemic I think as a whole.

Speaker Change: Beautiful products.

Speaker Change: People are people are.

Speaker Change: People related.

Speaker Change: Wants to Ireland.

Speaker Change: And we're working related could be diligently explore organization that can support that.

Carrie Baker: Yes.

Carrie Baker: Just to recalibrate, where we are in that cycle. Thank you so much.

Speaker Change: Adrienne I'll. This is Beth I'll add to that well, obviously, we are not.

Carrie Baker: Yes. Thank you for your question and I'll ask you some higher level commentary and color on the future I mean I think.

Speaker Change: Specifically pointing to that that long term guidance anymore.

Carrie Baker: And we know that our opportunity remains tremendous and we know that our brand is extremely strong through multiple lines of research to real Madrid, and we're very excited about that.

Speaker Change: There are many themes in that that remains very true we have a significant amount of footprint expansion opportunity across all geographies. We have a significant amount of expansion of retail Anita see execution expense an opportunity brand building opportunity that will continue to grow consumer sentiment, which will create both DTC and wholesale revenue opportunities in multiple markets.

Carrie Baker: Product evolution point of view and evolved.

Carrie Baker: As you've seen in our product.

Carrie Baker: Quite a bit over the last.

Carrie Baker: A number of years and the plans for that is for that to continue.

Speaker Change: And we do expect to see our non heavyweight down categories grow faster because they are newer categories for us, but we also believe there is plenty of growth opportunities in and heavyweight down as well. So the thematic elements that you heard in our long range plan. We certainly still feel are very much true, even though the specific revenue or any of that fork.

Carrie Baker: We have no merchandisers are joining us soon which will really help with that and.

Carrie Baker: And.

Carrie Baker: With our new design studio in Paris, which is.

Carrie Baker: To me one of the biggest biggest thing we're doing this year and with some platform volner maintenance to drive this business forward and we're really going to have strong.

Speaker Change: Cast suggested by that we pulled back on.

Carrie Baker: The strong design Xyrem product.

Speaker Change: Great and then a quick one just a follow up for Neil.

Carrie Baker: Yeah.

Carrie Baker: Coming out of that facility.

Speaker Change: This shift in marketing dollars, how should we think about that hitting the SG&A line.

Carrie Baker: Which works going to of course of their design capabilities here in Toronto and manufacturing capabilities in Canada. So I do believe that.

Speaker Change: Model out the SG&A for next quarter.

Carrie Baker: Our vision is to see our product line expand quite considerably.

Speaker Change: And then are there any stores.

Speaker Change: Globally that are not hitting your four wall your internal your IRR metrics.

Carrie Baker: With beautiful products.

Carrie Baker: Our people are.

Carrie Baker: People related.

Speaker Change: That would be under consideration for a potential closing or is that not even in the cards. Thank you.

Carrie Baker: Wants to Ireland.

Carrie Baker: And the wearable accumulated could be diligently explore organization that should support that.

Speaker Change: Yes, I will take the second.

Speaker Change: Adrienne I'll. This is Beth I'll add to that well, obviously, we're not.

Speaker Change: Part of the question first Adrian and thanks for your questions.

Speaker Change: No, we're not giving any consideration to that right now the focus for the business top to bottom, it's about peak and peak execution.

Speaker Change: Typically pointing to that that long term guidance anymore.

Speaker Change: There are many themes in that that remains very true we have a significant amount of footprint expansion opportunity across all geographies. We have a significant amount of expansion of retail and data C execution expense an opportunity brand building opportunity that will continue to grow consumer sentiment, which will create both DTC and wholesale revenue opportunities in multiple markets.

Speaker Change: And.

Speaker Change: Okay.

Speaker Change: We need to look beyond that we will at the right time, but right now we're very focused on driving productivity and profitability out of every store and as a reminder, our metrics in the stores are very very strong.

Speaker Change: As it relates to the shift in marketing, we don't necessarily give color on specific marketing spend or where it falls, particularly in the quarters, but what I can tell you is on a year to year basis, we're going to be slightly up in the marketing spend and we have been a little bit quieter in the first half than we will be in the second half of the year, obviously, putting all of our heft behind the hydro.

Speaker Change: And we do expect to see our non heavyweight down categories grow faster because they are newer categories for us, but we also believe there is plenty of growth opportunities in and heavier way down as well so that the thematic elements that you heard in our long range plan. We certainly still feel are very much true, even though that specific revenue and EBIT <unk>.

Speaker Change: Launch, which is coming soon as well as some commercial marketing activities that we know that can drive some search volume and some of the other kpis that help fund.

Speaker Change: Cast suggested by that we pulled back on.

Speaker Change: Great and then a quick one just a follow up for Aneel.

Speaker Change: <unk> help lead to.

Speaker Change: What was the shift in marketing dollars, how should we think about that hitting the SG&A line.

Speaker Change: Revenue in the channels.

Speaker Change: Fantastic. Thank you very much out eight I think.

Speaker Change: We model out the SG&A for next quarter.

Speaker Change: Hi, good morning.

Speaker Change: And then are there any stores anywhere globally that are not hitting your four wall your internal your IRR metrics.

Speaker Change: Your next question comes from the line of Rick Patel with Raymond James. Please go ahead.

Speaker Change: Hi, This is Josh filling in for Rick. Thanks for taking the question I was hoping you can provide additional color.

Speaker Change: That would be under consideration for potential closing or is that not even in the cards. Thank you.

Speaker Change: And your plans to improve on the comps for the remainder of the year.

Speaker Change: Yes, I'll take that.

Carrie Baker: Second.

Carrie Baker: Final question first Adrian.

Speaker Change: Curious how to really think about the opportunity to try those higher productivity levels on our reach from a regional perspective.

Carrie Baker: Thanks for your questions.

Speaker Change: No, we're not giving any consideration to that right now the focus for the business top to bottom, it's about peak and peak execution.

Speaker Change: Absolutely it's karri here so.

Carrie Baker: And.

Speaker Change: One of the biggest thing is that we started in the first half is what I talked about <unk>.

Speaker Change: Making sure our horizontal wells that are well.

Speaker Change: Well stocked with inventory and when such a better position than we were this time last year, even six months ago.

Speaker Change: We've made considerable efforts on training our staff and then also making sure that we're staffed appropriately when we see the capex. So all of those programs have been massive efforts in the first half and we started to see green shoots of that probably fastest in EMEA as we talked about we're applying that same playbook to every region and so we're really seeing that.

Speaker Change: Improvement in APAC, and North America is taking a little bit longer obviously, a larger store base.

Speaker Change: It really is continuing what we have already started on making sure that we're just being as aggressive as we have been in the first half.

Speaker Change: Hopefully with the influx of more marketing, we're going to see a little more traffic, especially on our comp stores. So to me, it's really staying on the path of things that we've already done and hopefully seeing a lot more trust.

Speaker Change: Traction from those efforts.

Speaker Change: And then I think as we stand here today as well I mean, we're clearly through the first big months at our peak, we got some data on how those things have.

Speaker Change: <unk> there are regions, particularly China, where we see that some level of resilience of the consumer that perhaps wasn't there in the second quarter.

Speaker Change: So that gives us a degree of confidence.

Speaker Change: What we can do about the macro is really out of our control and so we're focusing on how we drive the traffic to the stores and then all the steps to carry just referred to that helps lead to conversion once they're in there and I. Just don't think we can underscore enough how much effort there is around the world going into.

Speaker Change: Labor and training and ensuring that the luxury experience for the consumer is where it needs to be as we get.

Speaker Change: Keep it to peak.

Speaker Change: Thanks, and one follow up quick follow up on just the China component can you talk Mike I know you performed pretty well relative to the industry can you talk about what you're currently seeing from like the Chinese consumer.

Speaker Change: Perhaps any more color on what youre seeing in China that can and form our expectations for the region for the rest of the year.

Speaker Change: Yes, I think today the story is a little bit different than it probably was in the second quarter.

Speaker Change: We have continued to open stores as planned.

Speaker Change: We know that as you probably due to the macro environment in China.

Speaker Change: The challenge.

Speaker Change: We are hopeful that the stimulus that came through.

Speaker Change: Will lead to something over the long term, we're not necessarily planning for that what we do know is that our brand resonates with Chinese consumers wherever they are in the world and they shop, our stores in Canada, and the U S and Europe, and especially in mainland China.

Speaker Change: Travel seems to be somewhat muted, but again thats up and over a long term those trends will correct.

Speaker Change: What we have seen.

Speaker Change: In the past few weeks with both Golden week, and with Singles' day is some positive forward momentum momentum, we're hopeful that that trajectory continues.

Speaker Change: And that gives us as I said, a few months ago, some confidence that the Chinese consumer will continue to support Canada Goose.

Speaker Change: Just one add on there is the other growth that we're seeing also in with our wholesale business, whether it is travel retail.

Speaker Change: It also gives us confidence there is demand out there our partners do you want more inventory.

Speaker Change: So having been there, yes, it's a little quieter so.

Speaker Change: And Josh really affects the luxuries Thunder, but.

Speaker Change: But I think so many bright spots that are giving us confidence in both the mid and long term.

Speaker Change: Thanks, so much.

Speaker Change: Thank you.

Speaker Change: Your next question comes from the line of Oliver Chen with TD Cowen. Please go ahead.

Oliver Chen: Hi, Thank you regarding the new head of merchandising and what will be some key priorities and as you think ahead with the innovation and the.

Speaker Change: Execution, you are having with the new creative designer how are you thinking about creating new icons in the balancing new versus evergreen product and is developing new evergreen icons as well. Thank you.

Oliver: So Oliver.

Speaker Change: We must carry here, so our new head of merchandising so.

Speaker Change: I mentioned in my remarks, but worth noting <unk> been working very closely obviously with hydro and the team in.

Speaker Change: And broadening our assortment. So again, we've made such great progress in showing up as a lifestyle brand, but there are so many more opportunities still ahead of us and as you said.

Speaker Change: I'm trying to deals more than just for the sake of arm, we want to do more that's better and so reflected by our current season offering. It's a lot of focus on bestsellers and icon because we don't want to just have this broad assortment that confuses kind of customers. We want to have a very clear while not though distinctive voice that comes through our product. So.

Speaker Change: There, it's eyewear that we're introducing whether its accessories, whether it's doubling down on some new icons that we're introducing for having write down.

Speaker Change: That's going to be the focus so really understanding the consumer demand listening to what.

Speaker Change: What in what they are asking for but then also really translating R&D NAF, who cannot cases and protection performance and style.

Speaker Change: Okay, Neil as we think about the gross margin longer term what should we know about puts and takes that you could articulate then also category mix dynamics. Thank you.

Oliver Chen: Yes, I mean, I think keeping in mind that don't necessarily have a longer term view out I'll speak sort of more qualitatively Oliver.

Speaker Change: Clearly product mix over the last many years has shifted away from heavily weighed down in a way that excites us.

Speaker Change: Both because it makes the store economics really really attractive as we start to get deeper into the categories.

Speaker Change: As Kevin just alluded to the merchandising leader will help alongside hydro so product mix, perhaps creates a little bit of a headwind I'm not certain that's the case, but.

Speaker Change: Got it.

Speaker Change: It certainly is going to create a lot more dollars of gross profit and ultimately.

Speaker Change: EBIT leverage as we as we look forward, we continue to be vertically integrated that as a major competitive advantage for us.

Speaker Change: The team.

Speaker Change: Exists both in our product development chain as well as entire supply chain are laser focused on delivering high quality products that consumer the consumers love, but it allows us to control the manufacturing any cost environment that gives us informed decisions and so we think as I say I think that gives us a competitive advantage over the long term.

Speaker Change: I think beyond that.

Speaker Change: Certainly our view is over the long term, we want to grow each revenue channel and we're going to do that responsibly through comp growth as well as some pricing, but pricing isn't necessarily the lever that we want to pull out we want to pull on creating tremendous products for our consumers and growing volume through those through all of our channels.

Speaker Change: Thanks, Neil and carry best regards.

Speaker Change: It's all over.

Speaker Change: Your next question comes from the line of Brooke Roach with Goldman Sachs. Please go ahead.

Brooke Roach: Good morning, and thank you for taking our question I was hoping you could elaborate on your plans to drive an acceleration in comp trends in North America, and how youre thinking about that growth opportunity between stores and online and then separately can you contextualize the number of days of wholesale inventory you have on hand by channel.

Brooke Roach: By region and channel. Thank you.

Gary: And for US it's Gary here.

Gary: So in terms of accelerating the cost in North America. So we talked about North America is a little more cash on our store.

Gary: Frankly, it's a larger network a little more mature and so just hasnt come as fast as maybe some other regions and so it's the same playbook that we talked about so making sure that we are just being super diligent on what its traffic labor matching labor hours.

Gary: Monitor NBA performance, making sure we've got the right inventory in those stores.

Gary: Really the same playbook the only other thing I would say in North America is looking at just the state of the U S. Canada is actually.

Gary: Remaining quite strong in an environment, where the macro headwinds are are there.

Gary: I'd say the luxury spending in the U S and the weakened consumer sentiment is impacting those stores a little bit more and so we're looking at whether we need to put a little more on marketing investment how do we make sure that we're being responsible to the different.

Gary: Consumer demand patterns that we see by region. The brand health is not the same across the U S and so we're being very laser focus on a local level.

Gary: To drive that comp performance in.

Speaker Change: In terms of wholesale channel do you want to talk about inventory, yes, I can I'll take the question broke about inventory by Shan on region. So I think there's really two stories here. There is the wholesale channel inventory story, which is that we are in a significantly lower inventory position in the channel. This year than we were last year, that's obviously quite intentional or pullback in <unk>.

Speaker Change: Revenue. This area is to create that so that those wholesalers can experience our sell through so that we are maintaining our full price proposition at wholesale and retail and so we see that coming to fruition, which we and our wholesale partners are pleased with indeed to see if the opposite we were not and Terry alluded to a strong enough inventory position in D C.

Speaker Change: Everywhere.

Speaker Change: We had certain products that were well received by customers that were sold through to quickly et cetera. So we're in a much stronger inventory position and our D to C channel now at the beginning of peak than we were last year and we expect that will retain and we're leveraging the vertical integration you heard me I'll talk about earlier to capitalize on that and to chase sales opportunities when they do exist that we can get.

Speaker Change: For our product quickly enough. So that really is it really a tale of two two channels there.

Speaker Change: By region I don't think there's a lot of variation between region. Those are pretty those themes are pretty true across regions within each of those channels.

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

Speaker Change: Thanks, Greg.

Speaker Change: Again, if you would like to ask a question. Please press star one on your telephone keypad.

Speaker Change: And that concludes our question and answer session I would now like to turn the conference over to Ana Raman for closing comments.

Ana Raman: Thank you everyone for joining today's call. We look forward to giving you. Our next update with our Q3 results, we wish everyone, a happy and healthy holiday season. Thank you.

Speaker Change: Ladies and gentlemen, this does conclude today's conference call. Thank you for your participation and you may now disconnect.

Speaker Change: Yeah.