Canada Goose Holdings Inc. (GOOS) Q3 2021 Earnings Report, Transcript and Summary

Good morning. My name is Andrea and I'll be your conference operator today. At this time, I would like to welcome everyone to the Canada Goose Third Quarter Fiscal 2021 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. [Operator Instructions] Thank you. I would now like to turn the call over to Patrick Bourke, Senior Director, Investor Relations. Please begin your conference.

Thank you and good morning, everyone. With me are Dani Reiss, President and CEO; and Jonathan Sinclair, EVP and CFO. After prepared remarks from Dani and Jonathan, we will take your questions. This call, including the Q&A portion, includes forward-looking statements. Each forward-looking statement is subject to risks and uncertainties that could cause actual results to differ materially from those projected in such statements. Certain material factors and assumptions were considered and applied in making these forward-looking statements. Additional information regarding these forward-looking statements, factors and assumptions is available in our earnings press release issued this morning as well as in the Risk Factors section of our most recent annual report. 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. Our commentary today will include certain non-IFRS financial measures, which are reconciled in the table at the end of our press release issued this morning and available on our Investor Relations website. With that, I will turn the call over to Dani.

Thank you, Patrick and good morning, everyone. I am pleased to speak with you today about our performance in our third quarter, which has exceeded our expectations. We began this fiscal year with many unknowns. So we believed into what we knew to be true. We advanced our long-term plans to best capture and serve demand while at the same time placing our business in the best position for continued growth. This approach has delivered strong results when it matters the most. Today I will provide an overview of our third quarter results and share an update on three areas; one our strategic areas of focus, two, our purpose-based commitments and three, our outlook for the rest of the fiscal year. In the third quarter of the fiscal year, our business showed remarkable resilience and we had outperformed our own expectations. Total revenue increased by 4.8% to $474 million despite extensive closures and operating restrictions. This marks a return to growth for Canada Goose and our biggest quarter and we did it with strong profitability and cash flow. Adjusted EBIT margin in the quarter was 33.3% and free operating cash flow increased by $75.1 million to $309.6 million. Our third quarter results reflect the impact of our strategic long-term initiatives, our flexibility in key investments. To you further context, here are a few highlights. First, I'd like to give an update on our digital business, which we believe to be foundational component of the future of retail. We have invested heavily in e-commerce business for years with a long-term view. This year we successfully executed against that long-term strategy and at the same time, strategically deployed additional resources to better capture and serve demand around the world in our peak season. As a result, our global e-commerce revenue increased by 39.3% and we're encouraged with the strong momentum and acceleration the we continue to see across our e-commerce business in the fourth quarter. This quarter, I feel it's important to give a deeper geographical insight into our e-commerce business. Across each of our major markets, we saw strong double-digit growth. Europe was particularly strong and this includes France, Germany and Ireland and a nearly doubling of our digital business in the UK. In Mainland China, [indiscernible] continues to be a bright spot and a powerful channel for our brand and in a well-established sites in Canada and United States, we saw a strong increase to revenue from a contribution perspective. Now to our next strategic priority, Mainland China. On our last earnings call, I spoke about the growth plans that we put in place for our business in the region. We have continued to execute on these plans. In the past year, we have more than doubled the number of stores that operate in the market. This quarter we saw that our investment has delivered strong results and Mainland China DTC revenue has increased by 41.7%. We're still very earlier in journey in Mainland China and we see significant opportunity to continue to grow our network in the region. In the year that began with so much uncertainty for [ph] all, we learnt with trips and our customer's pages [ph] which has shaped our strategic approach moving forward. On our last call, I discussed in store Omni channel shopping, which has just gone past. We believe that it would be a needle mover for customer experience in conversion and I'm pleased to say that it has been and the cost of purchase continues to evolve. In this quarter, we truly saw the power and results. We consider the validation of our approach to enable Canada Goose fans to shop with us wherever they are, whenever they want and with access to our complete assortment. Today I'll also highlight the continued importance of sustainability across our business. We are steadfast in our commitment to strengthening our communities, protecting our planet and working towards a better future for generations to come. In this quarter, we inhered [ph] HUMANATURE, a purpose-based platform that unites our sustainability and values-based initiatives. It is the driving force over an enduring commitment embedded across every aspect of our operations. The role of business has evolved in today's world and driving meaningful change and become fundamental to today's consumer. We are focused on keeping the planet cold and people on it warm through our sustainable impact strategy, continued product innovation and invigorating global communities and building culture through the arts. We've entrusted to protect people from the element and now through human nature, we're taking want to an even deeper level. Building on that, this past January we launched a more sustainable product to date the standard expedition parka. This brand-new style inspired by the iconic expedition parka and encapsulate our heritage, renowned functionality and it optimizes sustainable integration. This product is significantly for our brand helping to set the standard for the future of our Canada Goose. We've kept sustainability at the forefront throughout the past six decades driven by constant innovation for the betterment of both our consumers and the planet and I am proud to say that this is only the beginning of our sustainable, comparable learning and that the consumer response has matched our own excitement as the style has nearly sold out. Further to the topic of brand momentum and consumer relevance, last month we partnered with Shanghai based China our first ever guest designer. We challenged their particular heritage pieces; we co-created a capsule based on her innovative design direction. The collection is relative new perspective and another important high moment for the brand. And lastly, I'd like to take this opportunity to welcome Michael Armstrong who joined our Board of Directors in January, a 22-year industry veteran is currently EVP Worldwide Television Licensing and Operations for [indiscernible], ViacomCBS Global Distribution Group. I am confident that his vast popular culture, entertainment and media exposure and experience will provide a valuable perspective as we continue to execute on our long-term growth strategy. And with that, I'll turn it over to Jonathan to go over the details of our financial results and outlook.

Good morning, everyone. Thanks Dani and thank you all for joining us. Looking at Q3 performance and our current trends that are three key things that stand out. Canada Goose has returned to growth. The resilience of our earnings and cash flow has delivered and we're entering the final quarter of the fiscal year with strong momentum. Starting with the topline, total revenue increased by $4.87 million to $474 million with significant sequential improvement across our business. This reflects global demand strength as well as our focusing to the pivotal distribution to where the consumer is shopping tonight. Coming out of the first COVID wave in the summer, we were in the midst of a massive digital shift in consumer behavior. We knew that e-commerce was as close as we could get to an always open channel and get this, we were proactive in our investments compared to the fall with the selling season from logistics to inventory mapping and experience. The result is a strong acceleration in performance in our previous quarter. E-commerce grew by 39.3% driven by meaningful investments to both traffic and conversion. Operationally, we're pleased with how smooth our network handles and shift record online volumes during the peak. The transition we completed in the summer to enhance capability and service levels were central to achieving this. Geographically, that was well-balanced double-digit growth in all of our major e-commerce markets. In North America, we saw strong contributions from our well-established sites in Canada and the US. In Mainland China, our shopping team of [indiscernible] continues to be a powerful engine for growth and last but not least, our momentum in Europe was exceptional. This includes very strong results in Germany, France and the Republic of doubling of our digital business in the UK. Alongside eCommerce, our another big strategic bet this year was store expansion in Asia. We did several offers in international shopping. We knew that serving the world's largest luxury consumer base at home was critical. DTC revenue in Mainland China increased by 41.7% with existing stores near pre-pandemic levels and the completion of our two remaining openings in Changchun, China and Shanghai. This strengthens our conviction in some way and we further expand its tier one tier two cities complements by the reach of Timo. And our stores in North America and Europe, we faced outsized headwinds from capacity restrictions and managed closures compounded by a lack of international traffic. In Q3, we lost 35 trading days for each of our three locations in Toronto, with Ottawa and Montreal also shutting at the end of the quarter. In London, we lost 36 trading days, with Paris and Milan, each closed for 13 as well as Berlin for 12 days. These closures include some of our most productive stores globally, the biggest and busiest days of the year. Against this to achieve total DTC revenue of $299.4 million, only $2.4 million less than last year is a great result. Relative to Q2, we offset a much greater proportion of retail deployments through e-commerce and when open, the stores delivered strong productivity. Wholesale increased by 2.7% to $160.8 million, this was driven by later shipment timing, data requests for more than in-season fulfillment model. We’re pleased with the performance of our partners this fall winter and we will continue to take a controlled brand first approach to managing this channel. Moving to earnings and cash flow adjusted EBIT margin was 33.3% in the quarter. This is a level of profitability most brands never come near let alone in times like these. Our resilience is grounded in full price economics and highly productive distribution. Consolidated gross margin was 66.8% with PTC at 77.9% and wholesale at 51.5%. Both channels were above typical levels due to temporary tailwinds. Gross margins in the mid 70s for DTC and mid to high 40s for wholesale remained the right level for wholesale over the long-term. That said these increases also reflect the durability of our gross margin fundamentals. Going down the P&L DTC operating margin was 55%. Retail profitability was impacted by operating disruptions, but was still very strong, and the uplift from e-commerce growth was a positive partial offset. Wholesale operating margin came in at 42.9%. While aggressively managing costs and cutting discretionary spending, we are better equipped to play offence when we see the opportunity. We accelerated SG&A investments in brand and demand building while still delivering a strong profit this quarter. Deducted EPS per diluted share was $1.01 compared to $1.08 last year. That brings cash free operating cash flow was $309.6 million an increase of $75.1 million driven by - reduced working capital. As a vertical manufacturer with an evergreen offering, we are executing against a planned drawdown of staged goods. Inventory decreased by 2.6% relative to Q3 last year, and 17.8% relative to the end of fiscal 2020. We remain on track to deliver a significant year-over-year decline as we close out fiscal 2021. In terms of liquidity, we are in a strong position with no leverage and a high degree of flexibility. Cash was up $469 million at the quarter end alongside an additional $256 million of available borrowing capacity in our undrawn revolver. Finishing with current trends, we are encouraged by the continued acceleration that we have seen in e-commerce growth since December. On the retail side however, store closures and movement ability restrictions have intensified. 45% of our own retail stores globally are currently closed. Globally, we've also seen a slowdown in foot traffic in certain markets in response to new movement restrictions. Recognizing this is a dynamic situation, we believe we are well positioned to continue moderating these headwinds through our digital business. In the wholesale, the vast majority of our shipments have been completed to-date. Q4 is seasonally a very small quarter for the channel and we currently expects a low double-digit year-over-year revenue decline. We concluded our contractual obligations for PPE, manufacturing in Q3, and as a result we do not expect further revenue from these activities in other segments in Q4. In terms of gross margin, we do not expect the DTC and wholesale gross margins in Q4 to repeat the larger year-over-year increase we had in Q3. This is due to seasonal spring products, and a reduction in [indiscernible] business manufacturing. Lastly, we expect overall SG&A in Q4 to grow at a similar rate year-over-year to rate we saw in Q3, driven by our continued investments in brand demand building. At the start of this year, we moved aggressively to effect downside, while investing with conviction, when we saw opportunity. Our success this quarter shows that that strategy is working. We can grow and we can be highly profitable in a challenged operating environment. We believe - that this underscores have the potential when the world comes out of this pandemic. We know that the path there won't be a straight line, but we're on the right track. And I look forward updating you on our progress on our next call. And with that, I will pass it over to our operator to begin Q&A.

[Operator Instructions] Your first question comes from the line of Omar Saad of Evercore. Omar, your line is open.

Thank you for taking my question. So I'm wondering about you know, I appreciate the information around the tourist impact sounds like it was a pretty big drag. But maybe you could dive in a little bit deeper, especially in North American and Europe, whether it historically been a strong tourist customer? And maybe you could also shed some light on the mix of your business between locals and tourists and your key market. And then also, the Chinese tourist is an important tourist. Do you have the footprint and presence you need in China to recapture some of those lost tourists there yet? Thanks, guys.

Hey Omar, thanks for your question. Good question we’re certainly in an environment with essentially no international traffic in North America and Europe - in fact the tourists has been closed and if I guess since last spring. So I'm really pleased with the strength of demand in local resume from local markets and move in from all of our consumers in these markets, actually it's been strong in and of itself. And for example, our revenue in Europe and rest of the world increased by 30% that’s reasonable but has been particularly hard hit by tourism because recently and we were up there. So and I'm very encouraged by what we've been seeing in our local markets from our local consumers.

And if I can - add a couple of points to that I mean, I think in a pre COVID world, you'll have heard us say many times that our retail traffic had roughly split to 50/50 between local and international consumers. And strategically, our focus this year has been on serving those travelling international consumers at home and driving demand in the local markets. And the fact that we were able to grow our business in Q3 with all of these headwinds is really, really encouraging. When it comes to China, we've had a great couple of quarters formally in Mainland China this year and this most recent one up 41.7%. We are seeing great progress both in our existing stores and in the new stores. We've got a very clearly established strategy of Tier 1 and Tier 2 complemented by REIT. And we are able to take great advantage of that market by executing on that strategy. We're very pleased with how it’s going.

Your next question comes from the line of Jay Sole with UBS.

Hi, good morning. This is [indiscernible] on behalf of Jay. So a couple of questions. I know the fourth quarter you mentioned is not that relevant on the wholesale channel. But what are you seeing in terms of wholesale book orders, I don't know if it's too early to ask maybe like the fall season. If you could comment also a little bit about how the e-commerce channel grew like throughout the quarter, throughout this last quarter. And last week, as you were mentioning your focus in China and Tier 1 and Tier 2 cities, how does that translate into like potential store openings as we move into the next couple of years? Thank you.

So I think our wholesale order book is something we typically talk about in the next fall, but we run a process, which we're running this year. And we're very pleased with outstanding, I think that I can give you some assurance about that. We talked a little bit of color on the e-commerce performance geographically speaking. But I think, we talked in our last call about how we've seen acceleration towards the end of the second quarter in our ecommerce performance year-over-year, that's an acceleration that continued to build through the third quarter, just as the numbers got bigger, and just when it really mattered. And that acceleration is something that I'm pleased to say has continued beyond the third quarter and into the fourth quarter. And when we think about the future, and where we're going with stores, this is where we're continuing to execute on our strategy. There is no change to that. And that's something we'll comment on further in due course, but suffice to say there is no change from strategy. We see DTC as an important and key avenue for growth in this business both online and physically.

And I agree with all the assets [indiscernible] I'm particularly proud of this year of this quarter of the team and our ability to have our biggest quarter ever under the circumstances during global pandemic. We've seen the [technical difficulty] consumer from all over the world to drive growth and acceleration, and really [indiscernible] is a lifestyle brand that they are gravitating towards and that makes me very optimistic and hopeful for the future.

Your next question comes from the line of Kate Fitzsimons of RBC Capital Markets.

Yes. Hi. Good morning. Congratulations on the return to growth. I guess I wanted to add two quick ones for me. You guys have noticed a couple times on the acceleration in the ecommerce business here in Q4. It is interesting because it seems at least demand for your brand, 10s that maybe happened earlier in the winter season. So curious what you think is driving the acceleration there, any comments on regional performance or response to early spring selling that would be helpful. And then secondly, Jonathan, you noted some brand building investments on the SG&A in Q3, what was the nature of some of these kind of investments and as we look out to Q4, what are some of the strategic expense priorities in Q4 and beyond, when we look at the channel, wholesale, DTC and also that unallocated expense buckets, that would be helpful? Thank you.

Thank you for your question. I will start off by giving few supplementary about that. I think that as we saw in previous quarters and throughout this year, the consumers mentality is much more of a buy now, where now mentality, I think that's important given the shift to the variety, and I think also with regard to our brand specifically, we're very relevant brand at a time like this where survival brand, we made products the last few products that are functional, and I think that consumers today there are certain times like this, that people are driven to products like ours, and I think in general, people these days are looking for real things that have real functional attributes that authenticity behind them. And I think that's part of the reason for the acceleration and continued acceleration.

Okay, normally on the question of cost, I think the key investments that we've been making as I refer to a little bit in my prepared remarks are around brand and demand building. And we deliberately, weren't investing as much. But if you think about the business being about a much more [indiscernible] I think, what's key is that you jump on the investment, as the market becomes into season. And that's what we were doing, and whether it was around the markets that we were opening up online, or whether it was about the existing markets or in support of the markets, where we're opening stores, we have been investing to build brand awareness to build [indiscernible] and to capitalize on the demand and convert into the businesses that we're reporting today. And that's something that the closets are by now, we're now mobile, and because this is now - we've got to be continuing into Q4. That's why we're continuing to invest in it. And that's why you'll see the cost continues to go up. But we're very comfortable with that, because we see the playback.

Your next question comes from the line of Ike Boruchow with Wells Fargo.

Hi, good morning, everyone. Just two quick ones for me. Jonathan, you guys had different cash flow, a lot of cash you guys have in the balance sheet relative to years past? Any thoughts on use of cash or your capital allocation? And then we appreciate the wholesale commentary for 4Q is there any commentary that a lot of noise with the store closures and whatnot, but any help on the DTC revenues that are embedded in your plan for 4Q as well?

Okay, so I think when it comes to capital allocation, our top priority is investing in the growth of this business. We said so many times, but it remains true, that huge untapped potential, and therefore from our point of view, top priority, top return on capital is always going to be investing in the future of this business. And we said before, we're going to invest $45 million this year in capital expenditure that's very much on track. And that all rise and fall as the needs of the business demand, but that remains our top priority. We're not looking at other uses. So then thinking about Q4, I mean, we've had obviously the good momentum and accelerating momentum in online offset by the fact that some of the store supplies, but as we move through the quarter, you've got to think last year also was pretty heavily impaired from about this point in the quarter or so, I think there is a strong case to say this business has got very good DTC permit.

Your next question comes from the line of Megan Annette with TD Securities.

Thanks. Good morning. So Dan, you touched on this in your remarks, but wondering if you could talk a bit more about the success of the various collaborations that were launched in the quarter and also early into Q4. So what kind of response are you seeing there from the consumer? And is there any color you can provide on the pipeline of collaboration that you're working on in the upcoming year? And just lastly, any update on the plans for the footwear launch that you can touch on? Thank you.

Thank you for your question. And yes, collaborations are a very important part of our business. And they have been - we have been successful for us this year. We have our first ever guest designer this year, Shanghai based Angel Chen designed a caps of collection for us and it's been received very well by our consumers. And no - these are opportunities that provide - that really provide high moments for our brand and ways for our brand to be reinterpreted for by different designers for different markets. And this has been a collaboration which has been received well generally, and we do intend to do more guests to that collaborations in the future. And it's definitely been something which works for us, as we do with our collaboration, which we've been doing for many years. In terms of footwear, we're still on track to launch that at the end at - this next year, next fall. I'm very excited about it, I think footwear is going to be a very important category for us in the long-term. I think we're doing it the right way. I think our strategy was very carefully thought through, and we're executing against that strategy. Well and I believe the execution is one of our strong points. And I think that I'm very excited for the market to see what are footwear the select from what we can do with it.

Your next question comes from the line of Oliver Chen of Cohen.

Hi, regarding innovation and product, Dani how are you thinking about focuses on lighter weight product and non-evergreen, you have a really strong core. And then as we look ahead, inventory relative to sales growth, would love your thoughts on how you're planning that, given the performance here and how your production availability or utilization looks? Thank you.

Thanks, Oliver. So with regards to our innovation and product, first of all our core product and I mean our core business model is still very important that we have a strong core. And we've seen that this year as well and our Consumers have gravitated towards that. But at the same time, there has been a lot of product diversification, a lot of diversification into lightweight down. Our knitwear has been well received. Our fleece has been well received. And we've certainly seen that we have let’s say permission from our consumers to get into new categories that make sense for us. Of course, it's very important for us that we do that in a best-in-class way and we put a best-in-class product into the market, regardless of what category it is. But I'm still very encouraged to see the diversification globally. And no, I think that that just speaks to the relevance of Canada use to the global lifestyle.

I think when it comes to inventory, I mean clearly, we're reporting a modest decline this quarter, it’s exactly where we want it to be. We've always said that we're going to pull down on the inventory levels at the start of the year that's exactly how this is playing out. And it may be generated a huge amount of our cash flow in Q3 as a vertical manufacturer with an evergreen offering. The beauty is that we can do this without constraining our commercial flexibility. So we've got a really strong position with already staged inventory, and we can adjust that speed. And frankly, if we were an outsourced model we could. And so, we remain on track to deliver - significant year-over-year decline without compromising with the commercial potential of the business.

Your next question comes from the line of Mark Petrie with the CIBC.

Good morning, you touched on this earlier, but I just want to follow-up specifically with regards to China and sort of the evolution in shopping behavior there and recognizing that parka’s obviously do drive the business particularly for Q3? I'm interested to hear about the adoption beyond parka’s and how the sales mix in China compares to other regions, where you’ve had a direct consumer presence longer, specifically sort of parka’s versus accessories or knitwear. And then, what that tells you about how the brand is building in that market?

I think the way to think about that is - that we you know obviously we're seeing great headway with parka’s made in China. But we've also seen good strong headway with the other categories. And that's what's really pleasing is that we're able to see this building out and getting a much more rounded presence with the consumer, which is important, but the full breadth and depth of the brand and our presence in that market. And I guess that what you probably see as China is a big country and if you think about it from a Northwest South point of you in the Southern part of China. It's much warmer it's less frigid in the winter. And therefore you'll get more of a mixed in favor of the lighter weight products there. Whereas you go further north in particular in the depths of winter, it's a more heavy part of penetration.

And just to add to that I just think it back to what previously comments at all, but I think that this just speaks to the growth of Canada use to the lifestyle brand being and our products being accepted across multiple categories that makes sense for us. And it's very encouraging, I see a lot more of it in the future. And I believe - there's a lot of opportunity ahead of us.

Your next question comes from the line of Adrienne Yih with Barclays.

Hello, good morning. My question is actually on kind of reinstallation or reengagement of the manufacturing process starting this year for winter 2021, what level of innovation, are you planning for winter 2021? And then secondarily on the wholesale guidance for fourth quarter is that largely due to current bookings and what's the opportunity for upside to that number? And upon full recovery, do you think you’ll reengage with the same number and sort of inventory depths in these channel partners? Thank you very much.

Thank you for your question and to your question correctly with regards to factory innovation, we're constantly innovating and finding more efficient ways to manufacture our products. We're really proud that we are able to, we do have eight facilities in Canada, and that we're always - we're always innovating and making them more efficient. And we have the largest manufacturing infrastructure of its kind in this country, employing approximately 20% of the trend so of course, Canada. In terms of our wholesale business, I mean we were really, really happy with it. And we - as always wholesale is a very important part of our business. Our wholesale partners, are like minded partners who will add value to our brand. And Jonathan will add he is more closer to the numbers with that.

Yes, I mean the one thing I'd say is, this is a tiny quarter for wholesale. And so and that's normal this is a highly seasonal business, pretty much all of the wholesale is down before we get into this quarter, this year is no different. And the fact we're going to be down year-over-year it's very small numbers. And so that's also important to keep in perspective. You know, notwithstanding the closures and the restrictions, we're positive about the wholesale channel. But at the same time, and as I said earlier, we are very disciplined. We’re very controlled about what we do we see - it’s a strong complimentary brand aggressive channel and it's managed well. And that's what we intend to do.

Your next question comes from the line of Brian McNamara with Berenberg Capital.

Hi, good morning, thanks for taking the question. Just a follow-up on wholesale so, the results came in much better than your guidance of a low double-digit decline? Could you provide more color on what drove that large delta? And also, is it reasonable to assume you've called a significant amount of wholesale partner just given the after effects of COVID? And if so, have wholesale partner has been getting better allocations, better results? Thank you.

Yes I mean our wholesale performance in the quarter - was something we were very pleased with. Obviously, the primary source of revenue in the quarter is that we are fulfilling our order book that's what we did. To the extent that customers wanted more, it's something that we consider in our location model, after what we consider the products of DTC notwithstanding that we were able to meet those requests. And so that produced some positive growth. We were very pleased with how that that is turned out. We're also, I think the other thing to think about as we look at the size of our wholesale business, no we've been on a continual edit or continuous edit of our wholesale distribution for the last several years. We don't see that changing anytime soon for us. What matters is quality of distribution and quantity of distribution, and that's what's so important. And so expect to see, we’re continued to focus on that as we move forward, but equally but that - an important part of our business in this channel.

Your next question comes from the line of Robby Ohmes with Bank of America Securities.

Hey guys, thanks for taking my question. I wanted to just ask about the U.S. market in particular, the U.S. revenues I think we're down a little bit for the quarter, but digital, you pointed out with strong, double-digit - was wholesale weaker in the U.S. than other regions or where the stores much weaker versus what you're seeing in China, maybe a little more color on kind of how the U.S. market played out through the quarter?

Yes, so what I'd say to give a bit more color on, I mean, first of all online for extremely well. We were very happy with it and it's a big business and it really, thank you. So it was a very strong business. Schools were a little bit interrupted. I think there was some noise around the election and traffic, and really has been disrupted, a wholesale business was very good. .:

Yes, [indiscernible] that I think that given that as we all know, there was no tourism this year and there were major disruptions, many stores wholesale and retail were closed at different points in time throughout the year. I think the strength that wholesale and retail showed during the time that they were open for local consumers was extremely robust, it was strong and certainly demonstrated the underlying demand for our product, which was very encouraging.

I would now like to hand the call back to Mr. Dani Reiss for any closing remarks.

Well, thank you. Thank you very much. Thanks to everybody for joining the call. Before we leave, I would like to close by acknowledging how challenging a year it has been continues to be for so many people. COVID-19 has impacted the lives of millions and our hearts go out to all of those that have been affected. I'd also like to sincerely thank our team members around the world for their continued efforts, resilience, and strength, and for showing such strong embodiment of our values throughout this very difficult year. Thank you everybody again for joining us on this call. And I certainly look forward to talking to you guys again soon.

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