Canada Goose Q3 2025 Earnings Report

Canada Goose EPS Results

• Actual EPS: $1.10
• Consensus EPS: $1.10
• Beat/Miss: Met Expectations
• One Year Ago EPS: N/A

Canada Goose Revenue Results

• Actual Revenue: N/A
• Expected Revenue: $446.82 million
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Canada Goose Announcement Details

• Quarter: Q3 2025
• Date: 2/6/2025
• Time: Before Market Opens
• Conference Call Date: Thursday, February 6, 2025
• Conference Call Time: 8:30AM ET

Canada Goose (NYSE:GOOS), together with its subsidiaries, designs, manufactures, and sells performance luxury apparel for men, women, youth, children, and babies in Canada, the United States, Asia Pacific, Europe, the Middle East, and Africa. The company operates through three segments: Direct-to-Consumer, Wholesale, and Other. It offers parkas, lightweight down jackets, rainwear, windwear, apparel, fleece, footwear, and accessories for fall, winter, and spring seasons. The company operates through national e-commerce markets and directly operated retail stores. Canada Goose Holdings Inc. was founded in 1957 and is headquartered in Toronto, Canada.

Canada Goose Q3 2025 Earnings Call Transcript

Presentation

[Operator]

Ladies and gentlemen, thank you for standing by. My name is Christa, and I will be your conference operator today. At this time, I would like to welcome everyone to Canada Goose Third Quarter Fiscal Year twenty twenty five Earnings Conference 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]

Thank you. And I would now like to turn the conference over to Neil Bowden, Chief Financial Officer. Neil, you may begin.

[Neil Bowden, Chief Financial Officer at Canada Goose]

Good morning, everyone. With me today are Danny Reese, our Chairman and CEO Carrie Baker, President of Brand and 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 U.

[Neil Bowden, Chief Financial Officer at Canada Goose]

S. 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 12/29/2024, with the same period ended 12/30/2023 unless otherwise noted.

[Neil Bowden, Chief Financial Officer at Canada Goose]

For today's call, Danny, Carey, 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 Danny.

[Dani Reiss, Chairman & CEO at Canada Goose]

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. Our direct to consumer business showed positive momentum.

[Dani Reiss, Chairman & CEO at Canada Goose]

We delivered a negative 6% DTC comp, which while below our expectations was an improvement from our year to date comp. More importantly, we saw 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.

[Dani Reiss, Chairman & CEO at Canada Goose]

A major highlight was the launch of our first capsule collection from Creative Director Heitor Ackerman under their 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 earned media over 30,000,000,000 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.

[Dani Reiss, Chairman & CEO at Canada Goose]

The commercial results were equally impressive. 25% of people who purchased Snow Goose also bought mainline products, while nearly two thirds of existing customers returning to the brand. We also hit a three year high in U. S. Search interest and exceeded our customer acquisition targets.

[Dani Reiss, Chairman & CEO at Canada Goose]

All of this validated the more intensive, mature approach we took with our marketing and organizational alignment to reach both loyal fans and new customers. Our evolving marketing strategy this quarter included increased investment behind snow goose and peak holiday activities. Our mainline collection resonated well beyond our traditional channels, showing up on the film set of Wicked and on the screen in Baby Girl. Having a robust prevalence across the film and entertainment industry has always been a hallmark of our brand and demonstrates our broad cultural relevance. Key fashion capitals like Paris, London and Italy drove significant follower growth as well.

[Dani Reiss, Chairman & CEO at Canada Goose]

In our brand ambassador, Shay Gildas Alexander, the NBA MVP front runner continued to perfectly embody our combination of style and performance. The breadth and caliber of these campaigns alongside the extraordinary reach of the Snow Goose campaign showcases the growing global relevance of Canada Goose as a lifestyle brand. We are incredibly proud of what the team has accomplished. Now turning to our second operating imperative, implementing best in class retail execution. Here, our precise focus on inventory management, labor optimization and boosting sales training drove improvements in store conversion rates year over year, particularly in North America and EMEA.

[Dani Reiss, Chairman & CEO at Canada Goose]

Third, simplifying the way we operate. We continue to streamline operations while maintaining strategic investments in key growth areas. We diligently managed our operating expenses and our inventory position improved significantly year over year, marking our fifth consecutive quarter of decreases. During the third quarter, while macro factors influenced consumer behavior in certain markets, overall, we saw strong performance as operational improvement and marketing initiatives gained traction. As we continue our transformation journey, we are energized by the strong execution of our strategy and increasing global resonance of our brand.

[Dani Reiss, Chairman & CEO at Canada Goose]

Positive response to initiatives like Snow Goose, the related marketing campaign and our expanded product offering demonstrates how we are building and sustaining our momentum with consumers worldwide. And now I'll turn it over to Carrie to discuss our commercial performance in more detail.

[Carrie Baker, President of Brand & Commercial at Canada Goose]

Thanks, Danny. 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 November, our biggest brand moment for the year.

[Carrie Baker, President of Brand & Commercial at Canada Goose]

To do that, we deliberately concentrated our marketing investments in the second half of the quarter, which meant that we were quieter than we normally would be in October and early November. As Danny 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 creative set a new standard.

[Carrie Baker, President of Brand & Commercial at Canada Goose]

We 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 a product front, our mix continued to evolve in the third quarter with lighter downfield 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 Crop Jacket and Vest, part of our new FallWinter twenty four collection and the beloved Chilliwack fleece bomber, which was a top seller within apparel.

[Carrie Baker, President of Brand & Commercial at Canada Goose]

That product evolution continued this month with our expansion into eyewear, representing another milestone in our product journey. Eyewear is a natural next step for us, and we are bringing a uniquely Canada Goose perspective to the category, inspired by nature, designed with purpose and delivering function and style. The launch complements the momentum we saw in lighter downfield outerwear and apparel during peak season, and it underscores our transformation into a brand with year round relevance and assortment for any market. Lastly, we strengthened our product leadership team in January, welcoming Judith Venkus as our new SVP of Merchandising. With nearly twenty years of luxury and fashion experience, Judith will oversee our global merchandising and pricing strategies from our London office.

[Carrie Baker, President of Brand & Commercial at Canada Goose]

She will work closely with Haider Ackerman in partnership with our design and product development teams to bring his vision to life, while guiding the expansion and the evolution of our product roadmap. One of the other key elements of our brand evolution is our wholesale strategy. Bottom line is it's working. We intentionally limited allocations, we invested with strategic partners with brand aligned values and we executed brand first activations. This drove higher sell through rates year over year, particularly in North America.

[Carrie Baker, President of Brand & Commercial at Canada Goose]

It increased appetite for in season reorders, and it means cleaner markets overall. Across the entire channel, we also saw wholesale partners holding to our full price positioning much more consistently in Q3 than last year. This is exactly where we want to be, and this progress sets a strong foundation for our strategy going forward. Now let me share some more detail about our second operating imperative, delivering best in class retail execution. As Danny mentioned, our D2C performance accelerated notably throughout the third quarter with December delivering improvement in both brand momentum and commercial results, which have carried through present day.

[Carrie Baker, President of Brand & Commercial at Canada Goose]

The intensity of our actions to improve conversion and productivity started to pay dividends despite the headwinds of lower traffic and macroeconomic pressures. In North America, we saw encouraging results with DTC comparable sales growing 3% in Q3, driven by strength in The U. S. Market. Our focus on streamlining retail operations, weekend staffing optimization and the introduction of host positions across key locations drove meaningful improvements in customer engagement, UPT, AUR and conversion.

[Carrie Baker, President of Brand & Commercial at Canada Goose]

During the busiest shopping season when people's expectations are highest and their time is at a premium, our hosts were critical in not only managing queue wait times, but in making sure customers were served with Canadian warmth and also were guided quickly and expertly to find the product they desired. In EMEA, our focus on improved execution delivered meaningful improvements in conversion rates, but not enough to offset the more challenging traffic trends. While broader market conditions led to slower foot traffic, particularly in The UK, I'm proud of how our teams capitalized on every selling opportunity, driving higher conversion, UPT and AUR year over year. This is a direct outcome of our retail initiatives and training programs. In Asia Pacific, we saw positive momentum during key shopping periods, including Golden Week and Singles Day, despite slower traffic in some markets.

[Carrie Baker, President of Brand & Commercial at Canada Goose]

This momentum has carried into Q4 with positive trends around Lunar New Year. In Japan, we opened two more department store concessions and DTC for the quarter improved significantly year over year as we continue to build into the demand in this important global market. Looking at our online business, while e commerce faced headwinds in Q3 that impacted conversion, global traffic saw substantial year over year growth. We continue to believe this is a channel that can deliver stronger results and are actively implementing initiatives to enhance the digital experience, improve site speed and drive improved performance. We are seeing some bright spots though.

[Carrie Baker, President of Brand & Commercial at Canada Goose]

We launched live shopping on Douyin in September, and despite facing challenges in Mainland China, it continues to show promise as a new channel for us. And in North America, branded search demand increased approximately 20% in December, pointing to the considerable growth potential as we continue to enhance our digital capabilities. This quarter was a defining moment for us and goes beyond strong commercial performance. We have proven our ability to execute complex global initiatives like Snow Goose, driving meaningful retail improvements and strengthening our position in the wholesale channel, all while maintaining brand discipline and full price positioning. This demonstrates not just the power of our strategy, but our increasing capability to deliver against it.

[Carrie Baker, President of Brand & Commercial at Canada Goose]

As we look ahead, it's clear these foundations will continue driving both brand heat and commercial momentum across all our channels. I'll now turn it over to Beth.

[Beth Clymer, President of Finance, Strategy & Administration at Canada Goose]

Thanks, Carrie, and hello all. As a reminder, our third operating imperative for fiscal twenty twenty five 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.

[Beth Clymer, President of Finance, Strategy & Administration at Canada Goose]

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 Judith 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.

[Beth Clymer, President of Finance, Strategy & Administration at Canada Goose]

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 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 human nature Chilliwax Lease bomber, a very popular product and one of my personal favorites, is manufactured in Winnipeg.

[Beth Clymer, President of Finance, Strategy & Administration at Canada Goose]

And in response to strong consumer demand, we've 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 we look at to measure success of this operating imperative is SG and A expenses as a percentage of revenue.

[Beth Clymer, President of Finance, Strategy & Administration at Canada Goose]

This metric, as reported, improved by 40 bps year over year in Q3 fiscal twenty twenty five. However, after accounting for the EBIT adjustments from last year's transformation program investments, SG and A as a percentage of revenue unfortunately remains higher year over year for both Q3 and year to date. Let's break that down. SG and A deleveraged by 110 bps, primarily driven by two thirty bps of higher direct costs associated with expanding our store base and our year to date comp sales performance not being as strong as we had hoped to give us greater leverage on those costs. This was however offset by approximately 120 bps of efficiency in our overhead costs.

[Beth Clymer, President of Finance, Strategy & Administration at Canada Goose]

These were driven by corporate savings from our two workforce reductions and our continued focus on optimizing headcount and third party costs. We are proud of this overhead cost leverage, but we are of course not satisfied with our aggregate SG and A as a percent of revenue and remain committed to improving efficiency in SG and A independent of top line performance. Turning to capital deployment, I'll first speak to our focused capital expenditures. You'll recall, we are opening fewer stores in fiscal twenty twenty five as we concentrate on optimizing our existing footprint. This, along with a general focus on prudent capital allocation, has resulted in a significant year over year decline in CapEx for the third quarter.

[Beth Clymer, President of Finance, Strategy & Administration at Canada Goose]

At the same time, we continue to invest in critical areas that drive revenue and fortify the foundation of our business. Next, inventory. We remain proud of our progress here. Our Q3 inventory decreased 15% year over year, marking our fifth consecutive quarter of reduction. Our inventory turns were 0.95 times, a 16% increase versus last year.

[Beth Clymer, President of Finance, Strategy & Administration at Canada Goose]

Both of these reductions are an acceleration and improvement from prior quarters. Similar to prior quarters, this was due to the temporary reduction in production levels, reducing aged inventory through responsible exit channels and an improvement in our planning and operations processes. Given our progress in inventory, we are re ramping our production capacity from the temporarily lower levels at which we started the year. We intentionally remain below historical levels and will maintain our disciplined approach to inventory management, while also planning effectively for the next fiscal year. This progress on our third operating imperative reflects our commitment to simplifying our organization and driving greater efficiency, while maintaining strategic investments in key areas.

[Beth Clymer, President of Finance, Strategy & Administration at Canada Goose]

We believe the foundation we are building positions us well for sustainable and profitable growth. I'll now turn it over to Neil to review our financial performance and outlook.

[Neil Bowden, Chief Financial Officer at Canada Goose]

Thanks, Beth. I'll now review our third quarter financial results and provide an update on our outlook. Revenue for the third quarter was $6.00 $8,000,000 slightly below last year's $610,000,000 dollars This reflects revenue growth in the D2C 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, D2C revenue increased to $518,000,000 from $514,000,000 last year, reflecting sales from our 74 permanent stores, up from $65,000,000 in Q3 fiscal twenty twenty four.

[Neil Bowden, Chief Financial Officer at Canada Goose]

While comparable D2C 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 was repeated today, we chose to be quieter on marketing leading to the Snow Goose launch in late November, a massive grand 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.

[Neil Bowden, Chief Financial Officer at Canada Goose]

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 was 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 $14,400,000 essentially flat from $14,100,000 last year. We expect full year revenue from this segment to align with fiscal twenty twenty four levels.

[Neil Bowden, Chief Financial Officer at Canada Goose]

Now some color on regional performance. North America revenue declined 2%, driven by a planned reduction in wholesale order volume. This was partially offset by strong D2C performance in both The U. S. And Canada, which continued to show momentum into January.

[Neil Bowden, Chief Financial Officer at Canada Goose]

North America Q3 D2C comparable sales was up 3% year over year. In APAC, revenue fell 2% primarily due to macroeconomic factors impacting D2C in Greater China. However, wholesale revenue grew due to timing shifts from Q4 to Q3 and higher travel retail sales. Excluding Greater China, APAC saw robust growth, particularly in Japan. In EMEA, revenue was down 4% as The U.

[Neil Bowden, Chief Financial Officer at Canada Goose]

K. Was weaker compared to the rest of EMEA, impacting D2C results. Wholesale revenue also declined slightly year over year as expected. Now let's turn to gross profit. Gross margin expanded by 70 basis points to 74.4%, driven by favorable pricing and reduced inventory provisions, partially offset by a greater mix of apparel, accessories and everyday product.

[Neil Bowden, Chief Financial Officer at Canada Goose]

We see this product growth as a major positive as these categories are clearly resonating with consumers. Adjusted EBIT for Q3 was $205,200,000 representing a margin of 33.8 compared to $207,200,000 and a margin of 34% last year. SG and A expenses decreased to $248,000,000 from $251,000,000 a year ago. We have mentioned several ongoing initiatives aimed at driving top line while also demonstrating discipline in managing our cost base. SG and A as a percentage of sales was 40.7%, down 40 basis points year over year.

[Neil Bowden, Chief Financial Officer at Canada Goose]

You have heard the details on this from Beth, but it is worth underlining a few key points. First, margin compression from B2C comparable sales decline is a function of our business model and why we are so focused on the activities that drive those metrics positively, specifically traffic generation and conversion. Second, as we simplify the business, we are seeing real gains in corporate costs that are holding. And finally, marketing expense, particularly related to Snow Goose but also demand generation activities in Q3, were significantly higher year over year as we capitalized on this key brand moment and consumer interest during the period. Beyond these three items, the year over year improvement on a reported basis reflects favorable foreign exchange impacts and transformation program costs incurred in fiscal twenty twenty four that did not recur this year as well as investment in the store network during Q3 year over year.

[Neil Bowden, Chief Financial Officer at Canada Goose]

We remain committed to enhancing efficiency and overhead costs regardless of top line performance. Adjusted net income attributable to shareholders was $148,300,000 or $1.51 per diluted share, up from $138,600,000 dollars or $1.37 per diluted share in Q3 fiscal 'twenty four, driven in part by share repurchases in the last fiscal year and a more favorable effective tax rate for this quarter. Inventory decreased 15% year over year, driven by reductions primarily in finished goods and raw materials, which drove strong cash generation in the quarter relative to the same period last year. As a result, net debt at quarter end was $546,000,000 compared to $587,000,000 last year. Net debt leverage was down to 1.9x adjusted EBITDA from 2.1x EBITDA a year ago and is expected to end the year below historical levels.

[Neil Bowden, Chief Financial Officer at Canada Goose]

Our capital allocation priorities remain focused on driving shareholder value in the medium and long term. First, investing in organic growth opportunities, such as brand and product development and expanding our retail network secondly, enhancing businesses' foundational needs, including upgrading our technology and third, maintaining an efficient capital structure. Turning now to our fiscal twenty twenty five financial outlook. We are maintaining our full year revenue guidance to a range between a low single digit increase to a low single digit decline compared to fiscal 'twenty four. Considering our year to date D2C performance was below our expectation, in particular comparable sales growth, and we had a quieter October and November in marketing ahead of the Snow Goose campaign, we have adjusted our full year D2C comp sales outlook.

[Neil Bowden, Chief Financial Officer at Canada Goose]

We now expect D2C comparable sales to range between flat growth to a mid single digit decrease compared to our previous range of a low single digit increase to low single digit decrease. Our wholesale revenue outlook remains unchanged with an expected decrease of approximately 20% year over year. Similarly, we continue to expect gross margin to stay consistent with fiscal 'twenty four. Based on our performance in the first nine months and revised outlook for D2C comparable sales and a higher investment in marketing activities, we now expect the adjusted EBIT margin to range between flat to down 100 basis points compared to the prior year. This is a revision from our previous range of an increase of 60 basis points to a decline of 60 basis points.

[Neil Bowden, Chief Financial Officer at Canada Goose]

As a result, we expect non IFRS adjusted income per diluted share to range between low single digit increase compared to last year with approximately 98,000,000 weighted average diluted shares outstanding. As a reminder, we continue to expect revenue distribution between the first half and second half of fiscal 'twenty four to follow our historical pattern of approximately 2575%, respectively. To close out today's remarks, we are seeing clear signs of progress against each of our strategic priorities. The Snow Goose launch demonstrated the power of our brand to captivate consumers, and we are excited about this next phase for Canada Goose. In our channels, we are pursuing best in class retail execution and have seen evidence that our plans are working, both in the consumer response but also in the growth capabilities of our team.

[Neil Bowden, Chief Financial Officer at Canada Goose]

As we look ahead, we remain focused on what we can control, elevating our brand, driving operational excellence and nurturing deeper connections with our customers around the globe. On behalf of the senior leadership team, I want to thank thank our teams around the world for everything they are doing to navigate the current environment while evolving the brand and delivering for our consumers on a day to day basis. With that, let me turn the call over to our operator for questions. Operator, you can open the line.

[Operator]

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

[Alexander Perry, Director, Equity Research at Bank of America]

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?

[Alexander Perry, Director, Equity Research at Bank of America]

Does it sort of assume a higher other revenue line? That's my first question. Thanks.

[Neil Bowden, Chief Financial Officer at Canada Goose]

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 February 1 or so. And so we've got it clearly a handful of weeks under our belt in performance in January, which we're happy about.

[Neil Bowden, Chief Financial Officer at Canada Goose]

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 D2C. 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 to date, 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.

[Alexander Perry, Director, Equity Research at Bank of America]

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.

[Alexander Perry, Director, Equity Research at Bank of America]

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.

[Carrie Baker, President of Brand & Commercial at Canada Goose]

Thanks, Alex. I'll take the first one. So 22% comp in December, yes, for North America. So really that's driven, strength of The US. And there's a few reasons for that.

[Carrie Baker, President of Brand & Commercial at Canada Goose]

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 how they had inventory. The marketing though component, I think, is a big thing.

[Carrie Baker, President of Brand & Commercial at Canada Goose]

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 and 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.

[Carrie Baker, President of Brand & Commercial at Canada Goose]

But primarily, it's the combo of our teams knew what they had to do, they executed really well against our imperatives, and then turning on the marketing just drove the momentum and gave us the reach we were looking for.

[Neil Bowden, Chief Financial Officer at Canada Goose]

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 D2C positive comps. 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 get into the comp component of that for last year's Lunar New Year, which was 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.

[Neil Bowden, Chief Financial Officer at Canada Goose]

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 recognize that it might 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.

[Alexander Perry, Director, Equity Research at Bank of America]

Perfect. Very helpful. Best of luck going forward. Thanks, Alex.

[Operator]

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

[Jonathan Komp, Senior Research Analyst at Robert W. Baird & Co]

Yes. Hi, good morning. Thank you. Maybe just first a follow-up there. Neil, could you give any more color?

[Jonathan Komp, Senior Research Analyst at Robert W. Baird & Co]

I know that implied fourth quarter given the seasonality of the business, there's a pretty wide range on outcomes yet implied by the full year guidance. So just any other detail or color you can share on some of the assumptions you're making in the fourth quarter?

[Neil Bowden, Chief Financial Officer at Canada Goose]

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, in the guide because the full year guide is, is flat on gross margin, but the Q4 number will likely 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.

[Neil Bowden, Chief Financial Officer at Canada Goose]

And so down the P and L, that's going to put some pressure on operating income. And of course, if revenue outperforms, then that's also a help.

[Jonathan Komp, Senior Research Analyst at Robert W. Baird & Co]

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?

[Carrie Baker, President of Brand & Commercial at Canada Goose]

Yes. 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 November. That has an impact and that wouldn't be our plan moving forward.

[Carrie Baker, President of Brand & Commercial at Canada Goose]

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 impacts 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, 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.

[Carrie Baker, President of Brand & Commercial at Canada Goose]

And that will continue to pay dividends in Q4, Q1, Q2, Q3, forever. And so that's how we're thinking about that. In terms of just the strategic or 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 'twenty six.

[Neil Bowden, Chief Financial Officer at Canada Goose]

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 downfield 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.

[Operator]

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

[Brooke Roach, Vice President, Equity Research at Goldman Sachs]

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 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.

[Carrie Baker, President of Brand & Commercial at Canada Goose]

Sure.

[Carrie Baker, President of Brand & Commercial at Canada Goose]

Thanks for your question, Brooke. So the response was it's pretty consistent globally, in terms of just how people are responding to Snoh 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.

[Carrie Baker, President of Brand & Commercial at Canada Goose]

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 Danny mentioned, I think, in his remarks, you know, it didn't just bring in new customers.

[Carrie Baker, President of Brand & Commercial at Canada Goose]

It also really appealed 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 India. We saw that in North America.

[Carrie Baker, President of Brand & Commercial at Canada Goose]

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.

[Carrie Baker, President of Brand & Commercial at Canada Goose]

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 the places that we are investing in. And so those commercial moments, we're really happy with the results that we're seeing.

[Brooke Roach, Vice President, Equity Research at Goldman Sachs]

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

[Carrie Baker, President of Brand & Commercial at Canada Goose]

So wholesale, as I said in my remarks, the strategy is working. So we're having very positive conversations with our partners. So, you know, 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 three sixty relevant brand, those are going really well. So the partnerships that we've done, you heard us talk about the PBI activation at Selfridges, those are working. So not only just in the quarter of driving stronger sell through, so they've all have lower inventory, but they're seeing stronger sell through results, which is exactly what we want to see.

[Carrie Baker, President of Brand & Commercial at Canada Goose]

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 and 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, you know, 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.

[Carrie Baker, President of Brand & Commercial at Canada Goose]

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.

[Neil Bowden, Chief Financial Officer at Canada Goose]

As far as '26 goes, we're in the middle of our process. So we'll update that outlook on the next call as we normally do.

[Brooke Roach, Vice President, Equity Research at Goldman Sachs]

Great. Thanks so much. I'll pass it on.

[Operator]

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

[Oliver Chen, Managing Director - Retail, Luxury, New Platforms Sector Head at TD Cowen]

A lot of the Haida 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? 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.

[Neil Bowden, Chief Financial Officer at Canada Goose]

Hey, Oliver.

[Dani Reiss, Chairman & CEO at Canada Goose]

Thanks for the questions, Danny. Can you learn us from the first, capital provider? We were really happy with how it performed. I think that we validated that this new energy is top of the brand and the new way we're launching Snow Goose is really brought in new customers, existing customers. And also, there's lots of cross selling that went on.

[Dani Reiss, Chairman & CEO at Canada Goose]

So it really is what it was supposed to do in terms of cross selling and bringing more customers. I think that the product was we got some amazing product feedback, amazing feedback on the campaigns that we did. I think that I think that we're entering a whole new place now with regards to the way our brand is being perceived again. And I think that the Heider as our creative record has really catalyzed that. And I'm really excited for the next few seasons to come up.

[Dani Reiss, Chairman & CEO at Canada Goose]

They're going to double down and it's going to be even better.

[Beth Clymer, President of Finance, Strategy & Administration at Canada Goose]

And I think I'll add

[Beth Clymer, President of Finance, Strategy & Administration at Canada Goose]

to that, Oliver, is that some of the product development and operations insights you heard me say in the remarks, how new and different this was for us. These products look very different. The materials are very different. The Elevation 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 linked together, the way we migrate product from the floor of the factory to the stores at a much faster period of time.

[Beth Clymer, President of Finance, Strategy & Administration at Canada Goose]

We experimented with a lot of new things there. And those will have 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. And with Judah joining with an additional investment in making design product development resources, our capabilities there are only going to grow.

[Neil Bowden, Chief Financial Officer at Canada Goose]

As far as traffic goes, just on the sort of second theme, Oliver, I'll I'll

[Neil Bowden, Chief Financial Officer at Canada Goose]

start with e commerce because

[Neil Bowden, Chief Financial Officer at Canada Goose]

I think that dovetails nicely with, what Danny gave around, how much interest there has been from the Snow Goose moment and, sort of the rest of the 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 Dooyan, which I'm sure you understand has, maybe a much higher sort of number of sessions. 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. And so, traffic was down, a little bit across the entire portfolio Within the individual regions, US and Canada in particular, as the quarter wore on, much improved, and over the quarter was up.

[Neil Bowden, Chief Financial Officer at Canada Goose]

In Asia, flat on the quarter, but again, early part of the quarter challenged and good in markets like Japan where there continued to be an influx of tourism, a little bit softer in China, and again, as January has as the calendar has turned and January has unfolded, it's been pretty good as well. Europe's a market where, it's sort of a tale of two hats. The UK is a spot where we have experienced and seen more macro headwinds than we have in Continental Europe where traffic's up and we're really happy with the performance. I think The UK is a market that continues to be challenged and it's not that's not a surprise, I don't think, given the news. I'll just make a real quick comment on the pricing.

[Neil Bowden, Chief Financial Officer at Canada Goose]

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 Judith gets her arms around what the merchandising plan looks like and we introduce more things, from the Snow Goose collection. We'll continue to evolve what that pricing looks like.

[Carrie Baker, President of Brand & Commercial at Canada Goose]

I can just add one quick point 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 it's 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.

[Carrie Baker, President of Brand & Commercial at Canada Goose]

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.

[Oliver Chen, Managing Director - Retail, Luxury, New Platforms Sector Head at TD Cowen]

Very helpful. Thanks. Best regards.

[Neil Bowden, Chief Financial Officer at Canada Goose]

Thanks, Oliver.

[Operator]

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

[Neil Bowden, Chief Financial Officer at Canada Goose]

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

[Neil Bowden, Chief Financial Officer at Canada Goose]

have a great day.

[Operator]

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

Participants

Executives

• Neil Bowden, Chief Financial Officer
• Dani Reiss, Chairman & CEO
• Carrie Baker, President of Brand & Commercial
• Beth Clymer, President of Finance, Strategy & Administration

Analysts

• Alexander Perry, Director, Equity Research at Bank of America
• Jonathan Komp, Senior Research Analyst at Robert W. Baird & Co
• Brooke Roach, Vice President, Equity Research at Goldman Sachs
• Oliver Chen, Managing Director - Retail, Luxury, New Platforms Sector Head at TD Cowen