Ladies and gentlemen, thank you for standing by. My name is Krista and I will be your conference operator today. At this time, I would like to welcome everyone to Canada Goose Third Quarter Fiscal Year '25 Earnings Conference Call. [Operator Instructions] Thank you. And I would now like to turn the conference over to Neil Bowden, Chief Financial Officer. Neil, you may begin.

Good morning, everyone. With me today are Dani Reiss, our Chairman and CEO; Carrie Baker, President of Brand & Commercial; Beth Clymer, President of Finance Strategy and Administration. 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. We undertake no obligation to update these statements except as required by law. You can read about these assumptions, risks and uncertainties in our press release issued this morning, as well as in our filings with the US and Canadian regulators. These documents are also available on the Investor Relations section of our website. We report in Canadian dollars, so all amounts discussed today are in Canadian dollars unless otherwise indicated. Please note that the financial results described on today's call will compare third quarter results ended December 29, 2024 with the same period ended December 30, 2023, unless otherwise noted. For today's call, Dani, Carrie, Beth and I will deliver prepared remarks, following which we will open the call to take questions. With that, I'll turn the call over to Dani.

Thanks, Neil and good morning everyone. I'll start my thoughts on our third quarter performance and progress before turning it over to the team to review our results in greater detail. The third quarter marked solid progress towards our three operating imperatives, leading to favorable momentum throughout the month of December and into the New Year. Our third quarter revenue was slightly lower year-over-year, primarily due to the expected decline in Wholesale revenue. The direct-to-consumer business showed positive momentum. We delivered a negative 6% DTC comp, which, while below our expectations was an improvement from a year-to-date comp. More importantly, we saw a very significant improvement in the month of December, particularly in North America, where comp sales grew 22%. We are particularly encouraged by this performance as it validates the inherent strength of our business, when we execute well across product and marketing. Third quarter results witnessed continued progress across our three operating imperatives. First, setting the foundation for the next stage of our brand and product evolution. A major highlight was the launch of our first capsule collection from creative director Haider Ackermann, under the heritage label Snow Goose, which happened in November. The Snow Goose capsule reimagines our heritage through a new lens, while staying true to our performance roots. The launch was amplified by an integrated global launch featuring influential talent and a coordinated suite of activations around the world. We set records in media over 30 billion impressions, representing our highest launch in recent history. Our purposeful and strategic efforts around this launch drove significant impact across key brand heat metrics and establishes a foundation for our marketing strategy in the future. The commercial results were equally impressive. 25% of people who purchased Snow Goose also bought mainline products, while nearly two-thirds of existing customers…

Thanks Dani. Q3 marked a foundational transformation for Canada Goose as we executed with focus, discipline, and strategic intent. We saw meaningful progress across our operating imperatives, particularly in December and I'm excited to share the results. So, first let me start by discussing our first operating imperative, setting the foundation for the next stage of our brand and our product evolution. Our performance in the third quarter was shaped by our strategic decision to fully support the Snow Goose launch at the end of November, our biggest brand moment for the year. To do that, we deliberately concentrated our marketing investments in the second half of the quarter, which meant that we required than we normally would be in October and early November. As Dani mentioned, once we activated, our efforts delivered a remarkable improvement in brand momentum and commercial results across all regions and this continued through the end of the year. Our Snow Goose launch marked a sea change. It was a defining moment for us, not just for the quarter, but for how we move forward. Our campaign set a new standard, which showed up differently in all markets bolder, louder, and yet unmistakably true to our brand. And in doing so we've built a new muscle of executing engaging, immersive, and fully integrated global campaigns that drive real results. On the product front, our mix continued to evolve in the third quarter with lighter down field outerwear revenue growing year-over-year, particularly in December. At the same time, we saw robust growth in our apparel offering, which demonstrates our accelerating brand heat, confirms our relevance beyond extreme cold weather moments, and reinforces our position beyond outerwear. Bestsellers included the Grandview Cropped Jacket and Vest part of our new fall/winter 2024 collection and the beloved Chilliwack Fleece…

Thanks, Carrie and hello all. As a reminder, our third operating imperative for fiscal 2025 is to simplify and focus the way we operate. We are doing this through internal operating excellence and focused capital deployment. I'm pleased to share our progress in the third quarter. Starting with achieving operating excellence. As you have heard me say each quarter, we remain ruthlessly focused on prudently managing our headcount and third-party cost base. We are making critical hires in key areas of our business. For example, design and product development talent to support our brand and product evolution and welcoming Judit to the team. Even with these investments, our corporate headcount has not grown since our March organizational changes and we are continually making changes where required to ensure our organization is fit for purpose. Additionally, we have been working to make our operations capabilities more flexible and nimbler to support the business. We demonstrated this with the Snow Goose capsule. These products included new fabrics, trims and design features yet we brought them from design conception to consumers in a record time. This required new ways of working across our organization. We are also now manufacturing in-season small quantities of mainline product in response to consumer demand signals. For example, our HUMANATURE Chilliwack Fleece Bomber, a very popular product and one of my personal favorites is manufactured in Winnipeg. And in response to strong consumer demand, we produced more of that style in season. This has enabled us to capture incremental revenue opportunities and maintain strong sell-through rates. We have done this despite all of the teams involved in this work being smaller in Q3 this year than they were at the same time last year. This is about being simpler and more effective. As you will recall, the metric…

Thanks, Beth. I'll now review our third quarter financial results, and provide an update on our outlook. Revenue for the third quarter was $608 million, slightly below last year's $610 million. This reflects revenue growth from the DTC channel, offset by the anticipated decline in the Wholesale channel. Here's a breakdown of our channel performance on a year-over-year constant currency basis. From a channel perspective, DTC revenue increased to $518 million from $514 million last year, reflecting sales from our 74 permanent stores up from 65 in Q3 fiscal 2024. While comparable DTC sales declined 6%, we saw promising results in North America with comparable sales up for the third quarter. While we recorded positive comparable sales growth in both October and December these were not enough to overcome a very challenging November. As we noted in our Q2 earnings call and what we was repeated today, we chose to be quieter on marketing leading to the Snow Goose launch in late-November, a massive brand heat moment. Since then, with marketing spend more in line with historical levels, we have seen positive results with both North America and APAC delivering positive comparable sales growth in January. Specifically in APAC, we've been encouraged by the consumer response to our brand, during Lunar New Year. Wholesale revenue declined 8% on a reported basis and constant currency basis, aligning with our strategy to reduce wholesale order volume, over the year. For the first nine months of the year, Wholesale revenue is down 17% tracking toward our full year expectation of a 20% decline. Channel inventory improved significantly year-over-year, an outcome that we welcome as we turn our attention towards next year's order book. Other revenue rose to $14.4 million essentially flat from $14.1 million last year. We expect full year revenue from this…

Thank you. And we will now begin the question-and-answer session. [Operator Instructions] Your first question comes from the line of Alex Perry with Bank of America. Please go ahead.

Hi. Thanks for taking my questions here. Just first, I wanted to ask about the revenue guide. So you kept the top line the same but lowered the DTC comp sales forecast with no change to the Wholesale guide. What are the puts and takes there to sort of get you in the same revenue range? Does it sort of assume a higher other revenue line? That's my first question. Thanks.

Sure, Alex. Thanks for your question. Yes, so I think a couple of things. As it relates to, obviously, we know where we are on the first of February or so, and so we've got clearly a handful of weeks under our belt and performance in January, which we're happy about. I think our issue is that with not enough time left in the year we didn't think that we could deliver our original expectation around DTC. And so we probably put a little bit of conservatism in that comparable sales forecast. And where there may be upside in terms of performance that we've seen today, we'll happily take that. As it relates to other, we're not anticipating really to be materially different than last year, which is where the guide is. And the same thing is true about Wholesale, although that's a channel where there's a possibility of some upside if the rest of the year goes better than expected.

Perfect. And then just my follow-up. I wanted to ask about the 22% comp in North America in December, if I heard that correctly. Can you just talk about what you think drove that? Was that mostly the shift in the marketing activation? And then in terms of the momentum you're seeing in January I think you spoke to some positive comps in January. Was that overall DTC comps in January are positive at the company level? And what do you think is driving the January momentum as well? Thank you.

Thanks, Alex. I'll take the first one. So 22% comp in December, yes, for North America so really that strength of the US. And there's a few reasons for that. Of course, it absolutely was about the initiatives that we put in place. Our teams were well trained. They knew how to capitalize on all the traffic that was coming. They knew they had inventory. The marketing though component I think is a big thing. So if you remember, we were intentionally quiet in October and November to really support the Snow Goose launch. And so once that we fully turned that on and started activating that really drove strong momentum around the world but saw the results of that in North America in stores in particular and that has continued. So I think of course in certain markets it was a little bit colder and so that always is an added benefit. But primarily, it's the combo of our teams do what they have to do. They executed really well against their imperatives and then turning on the marketing just drove the momentum and gave us the reach we were looking for.

In January, I think your question really is about some color on where positive comps are. So we are seeing at a consolidated level or at least consolidated DTC positive comp. Stores are particularly outstanding and that's across the world so we're really happy about that. Now it's a little bit of a timing shift in Asia in terms of having earlier Lunar New Year. And so as we're getting to the comp component of that for last year's Lunar New Year which is a little bit later, it's possible we're going to see a little bit of slowing in performance in Asia in the first few weeks of February. But we're really excited about what we've seen in the stores and what feels like a continued acceleration. And I'll just underscore the point Carrie made, and this goes a little bit to where the EBIT guide is as well. We have continued to spend on demand generation and marketing activities both top and bottom funnel as we come through January because we know and see that it's working. And so we have recognized that it may have a little bit of short-term pressure in terms of our ability to deliver EBIT for the year but know that it's working

Perfect. Very helpful. Best of luck going forward.

Thanks, Alex.

[Operator Instructions] Your next question comes from the line of Jonathan Komp with Baird. Please go ahead.

Hi, good morning. Thank you. Maybe just first a follow-up there Neil. Could you give any more color? I know that implied fourth quarter, given the seasonality of the business, there's a pretty wide range on outcomes you had implied by the full year guidance. So just any other details or color you can share on some of the assumptions you're making in the fourth quarter?

Yes. I mean I think the math kind of squares with the full year guide. But I think the one other thing I'd point to is that we're anticipating to be just a little bit better on gross margin year-over-year and so that may not be completely clear in the guide because the full year guide is flat on gross margin, but the Q4 number is likely to be a little bit better and that's going to translate to some benefit. And as I just said, we continue to expect to spend in marketing while we -- while those numbers are delivering. And so down the P&L, that's going to put some pressure on operating income. And of course, if revenue outperforms, then that's also a help.

Okay. Thanks for that. And then maybe just a bigger picture takeaway question. As you step back and look at the performance of the new product and merchandising initiatives, the shift in marketing strategy, but also some of the short-term pressures, what are you taking away in terms of factors that are unique to the quarter versus any changes or implications for both the future growth of the business as well as the profitability just as we think forward beyond the fourth quarter here?

Yeah. So I'll take that. I think the biggest thing for us is we know we -- again, it was intentional, but starting later, obviously has an impact from a short-term basis in Q3. So really not activating our marketing until end of November, that has an impact, and that wouldn't be our plan moving forward. I think the thing to take away from that, though, is this was really such a foundational moment. So it has an impact short term. But when you think about that long term, and we're seeing the impact of that throughout the quarter and into Q4, this was such a different way to come to market. It was a different creative level. It was a different execution level in terms of the quality the boldness of the events that we did, whether it was in APAC or whether it was EMEA, whether it was in North America. So that is like a new way forward for us, and that will continue to pay dividends in Q4 and Q1, Q2, Q3 forever. And so that's how we're thinking about that. In terms of just the strategic -- the timing and the strategy around marketing, of course, we would always want to be pulling that earlier. And so that's reflected in our plans as we look at FY 2026.

I think I'd add to that, that what's really encouraging to us is the proportion of the business that's happening outside of downfilled underwear. And so really strong performance in apparel and fleece in the other categories. And so as we move away from -- in terms of the retail footprint away from sort of traditional colder weather spots, we love what we're seeing in terms of adoption rate for those other categories. And clearly, that's an area where we expect to lean into.

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

Good morning, and thank you for taking our question. I was hoping we could dive a little bit deeper into the brand resonance that you're seeing with the Chinese consumer. I know there's some noise with marketing timing shifts and a shift of the Lunar New Year. But as you spent more money marketing in the market and launched new products, specifically snow goose, can you talk a little bit about the consumer response you saw with the Chinese consumer as well as what you view as the current competitive and macro environment leading to potential for growth in that market on a go-forward basis? Thank you.

Sure. Thanks for your question, Brooke. So the response was -- it's pretty consistent globally in terms of just how people are responding to Snow Goose as a capsule collection. But in China, you've got to remember, it's one of our healthiest markets in terms of brand awareness, brand strength. And so the addition and all the energy and the marketing investments that we made in that market only amplified that. And so we continue to see that, as I said, in January. Their activation, I can't remember the exact date, but it was close to mid-December. And so that really started to turn on, and we've just seen that momentum build over the week over week. So the response has been really strong. They love the newness. As Dani mentioned, I think, in his remarks, it didn't just bring in new customers. It also really appeal to existing customers. So two-thirds of the purchasers globally of Snow Goose are existing customers. So it did the job that we needed it to do and we saw that in China. We saw that in EMEA. We saw that in North America. So very happy with those results. In terms of the macro view, I mean it continues to be pressured. When you look at Hong Kong, Macau, Taiwan those markets we're still seeing lower traffic levels. Mainland China is a little bit more mixed. We had really strong performance on Douyin as we talked about. Golden Week was strong. Lunar New Year we're really happy with what we're seeing there. So it's still a tough market, but we're seeing the momentum in those places that we are investing in. And so those commercial moments we're really happy with the results that we're seeing.

Just as one quick follow-up. If we could pivot to the outlook for wholesale great to see some improving sell-throughs in North American wholesale. Can you speak to how those conversations with your wholesale partners are trending for fall/winter 2025? What is your outlook for stabilization in the wholesale channel into the next fiscal year?

So wholesale as I said in my remarks the strategy is working so we're having very positive conversations with our partners. So us being very selective on the ones that we're investing with, the ones that are brand-aligned that see the future that see the potential for us to be a 360 relevant brand those are going really well. So the partnerships that we've been and you've heard us talk about the PVI activation at Selfridges those are working so not only just in the quarter are driving stronger sell-through. So they all have lower inventory, but they're seeing stronger sell-through results which is exactly what we want to see. Because of that there's cleaner markets and they're holding price. And so that is boding well for future conversations. They're really excited about Haider and what he's bringing in the energy and the newness and sort of the bold color palette. So it feels like there's a renewed energy and a trust there that goes both ways that we're really excited about what that means for the future. So we saw most of that in Q3 in North America, but having strong conversations in EMEA as well and saw ATS orders in both of those markets. In APAC, it's much more of a growth on from a travel retail perspective and so that -- obviously you know that goes into our wholesale channel but similar response. Very excited understand the future see what we're doing with the investments and it's starting to pay off.

As far as 2026 goes we're in the middle of our process so we'll update that outlook on the next call as we normally do.

Great. Thanks so much. I will pass it on.

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

A lot of the Haider product has been exciting. What have been key learnings and also your thoughts on launch cadence and the interplay with the new design and product development talent you mentioned? A second on traffic. How has that trended digitally and physically in terms of store traffic or any major callouts by geographies would be helpful as well. And third longer term on pricing what do you see happening across the portfolio perhaps like-for-like and mix as you think about modernization of the assortment? Thank you.

Hey, Oliver, thanks for the questions. It's Dani. Key learnings from the first capital provider. We were really happy with how it performed. I think that we validated that this new energy off the brand and this new way we'll be launching Snow Goose really new customers, existing customers and also there's lots of cross-selling that went on. So, it really did what it was supposed to do in terms of cross-selling and bringing more customers. I think the product was -- we've got some amazing product feedback amazing feedback on the campaigns that we did. I think that we're [indiscernible] place now with regards to the way our brand is being perceived again and think that [indiscernible] has really catalyzed that and I'm really excited for the next [indiscernible] come up. They're going to do and it's going to be even better.

And I'll add to that Oliver is that some of the product development and operations insights you've heard me say in the remarks and different this was for us. These products look very different. The materials are very different. The elevation of design and the speed at which we executed it was also really different. And so that just required new muscles across the organization, the way design product development, manufacturing supply chain, all in together the way we migrate product from the floor of the factory to the stores in a much faster period of time. We experimented with a lot of new things there. And those will pay future dividends both in future Snow Goose capsules. But more importantly, we're taking a lot of those learnings about how to be more nimble into the mainline to joining with the additional investments thinking in line development resources our capabilities there are only going to grow.

As far as traffic goes just on the sort of second theme Oliver I'll start with e-commerce. I think that dovetails nicely with the answer Dani gave around how much interest there has been from the Snow Goose moment and sort of the rest of it particularly digital marketing spend that we've had. We're way up on traffic to the e-commerce site over in the third quarter, which is exciting. If I carve out a little bit of that, there's some benefit to Douyin, which I'm sure you understand has maybe a much higher sort of number of obsessions. But that's also encouraging that new channel, new type of commercial experience, new type of new way to touch our customers has also been met with some real interest. I think as it relates to the store traffic, it's maybe a little bit more of an indication of the macro environment that we experienced throughout the quarter. So, traffic was down a little bit across the entire portfolio. Within the individual regions, U.S. and Canada, in particular, as the quarter wore on, much improved and over the quarter was up. In Asia, flat on the quarter, but again early part of the quarter challenged and good in markets like Japan where there continue to be an influx of tourism, a little bit softer in China. And again, as January as the calendar started in January has unfolded it's been pretty good as well. Europe is a market where, it's sort of the tale of two halves. The U.K. is a spot where we have experienced and seen more macro headwinds than we have in Continental Europe where our traffic is up and we're really happy with the performance. I think the U.K. is a market that continues to be challenged. And that's not a surprise, I don't think given the news. I'll just sneak a real quick comment on the pricing. I think we haven't really done a lot of different things on pricing. We continue to look at it across the categories, across the world, but mainly focused on what the consumer value proposition is and exactly what we are delivering for the consumers. And as Judit gets her arms around what the merchandising plan looks like. And we're introducing more things from the Snow Goose collection we'll continue to evolve what that pricing looks like.

Let me just add one quick one, just on pricing. The one thing that we're encouraged by is it's -- we're not seeing it as a limiter. So when you look at the moments like whether it's Black Friday, whether its holiday, price is not an issue. And so that is obviously a factor. So you know that Snow Goose is already at the top of the pyramid and that will continue. But as Neil said, we're researching that. And it's always about meeting that consumer demand with the right price point with the right product.

Very helpful, thanks. Best regards.

Thanks, Oliver.

That concludes our question-and-answer session. And I will now turn the call back over to management, for closing comments.

Thank you, Operator. And thank you everyone for your continued interest in Canada Goose. To the extent that there may be additional questions, we're always here, either myself or the IR team to handle those. Take care. And have a great day.

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