Canada Goose(GOOS) - 2025 Q2 - Quarterly Report

Revenue and Income - Revenue for the second quarter ended September 29, 2024, was CAD 267.8 million, a decrease of 4% compared to CAD 281.1 million for the same period in 2023[4] - Gross profit for the second quarter was CAD 164.1 million, down from CAD 179.5 million year-over-year, reflecting a gross margin decline[4] - Net income for the second quarter was CAD 6.3 million, compared to CAD 4.1 million in the prior year, indicating a positive trend despite previous losses[3] - Operating income for the total segments was $75.6 million, down from$95.6 million in the same quarter last year, reflecting a decline of 21%[43] - The company reported a net loss before income taxes of $6.9 million for the second quarter, compared to a loss of$11.3 million in the same quarter of the previous year[43] - Basic earnings per share for the second quarter was $0.06, compared to$0.04 in the same quarter last year[48] Cash Flow and Liquidity - Cash reserves increased to CAD 68.8 million from CAD 37.5 million, providing a stronger liquidity position[9] - Net cash used in operating activities was CAD 50.4 million for the second quarter, a slight improvement from CAD 57.2 million in the previous year, with a total of CAD 193.3 million used in the two quarters compared to CAD 266.5 million last year[13] - Net cash used in investing activities decreased significantly to CAD 3.2 million in the second quarter from CAD 26.4 million last year, totaling CAD 5.5 million for the two quarters compared to CAD 32.1 million last year[13] - Net cash from financing activities was CAD 58.7 million in the second quarter, down from CAD 72.1 million year-over-year, with a total of CAD 118.4 million for the two quarters compared to CAD 51.1 million last year[13] - The company’s cash at the end of the period was CAD 68.8 million, an increase from CAD 37.5 million at the end of the previous year’s second quarter[13] Assets and Liabilities - Total current assets decreased to CAD 771.2 million from CAD 803.5 million year-over-year, primarily due to a reduction in inventories[9] - Total liabilities decreased to CAD 1,197.8 million from CAD 1,233.6 million, indicating improved financial management[9] - The company’s non-current, non-financial assets totaled $585.1 million as of September 29, 2024, down from$591.7 million a year earlier[46] - Lease liabilities rose to CAD 337.9 million as of September 29, 2024, compared to CAD 305.3 million on October 1, 2023, representing an increase of approximately 10.6%[57] - The total accounts payable and accrued liabilities decreased to CAD 155.4 million as of September 29, 2024, from CAD 177.7 million on March 31, 2024, reflecting a decline of approximately 12.5%[59] Inventory and Receivables - Total inventories decreased to $473.4 million from$519.7 million year-over-year, indicating a reduction of 9%[51] - Trade accounts receivable stood at $124.5 million as of September 29, 2024, slightly down from$126.3 million a year earlier[49] - The provision for inventory obsolescence increased to $66.8 million from$43.9 million in the previous year, reflecting a rise of 52%[52] Financial Management and Strategy - The company is focusing on market expansion and new product development to drive future growth, although specific details were not disclosed in the call[4] - The company continues to invest in technology and innovation to enhance operational efficiency and customer experience[4] - The company has implemented changes in accounting policies regarding the presentation of liabilities, resulting in CAD 23.0 million of liabilities being reclassified from non-current to current[31] Shareholder Activities - The Company initiated a normal course issuer bid to purchase up to 4,980,505 subordinate voting shares from November 22, 2023, to November 21, 2024[78] - Since the commencement of the Fiscal 2024 NCIB, the Company purchased 3,586,124 subordinate voting shares for a total cash consideration of $56.9 million[81] - The total share capital as of September 29, 2024, was valued at$108.6 million, reflecting an increase from $104.9 million on March 31, 2024[81] Debt and Financing - The Company has pledged substantially all of its assets as collateral for both the Revolving Facility and the Term Loan, ensuring compliance with financial covenants[64][71] - The Term Loan outstanding amount was CAD 390.2 million as of September 29, 2024, slightly down from CAD 393.1 million on March 31, 2024, a decrease of about 0.7%[72] - The Company recorded cash flows of CAD 74.4 million from Mainland China Facilities borrowings and CAD 31.4 million from Japan Facility borrowings as of September 29, 2024[148] Risk Management - The company is exposed to various risks including liquidity risk, credit risk, and market risk, with senior management overseeing these risks[113][114] - The Company executed an operating cash flow hedge program for fiscal 2025 to mitigate foreign exchange risk[129] - The Company has outstanding foreign currency forward exchange contracts totaling USD 67.9 million for purchasing Canadian dollars and USD 14.9 million for selling Canadian dollars as of September 29, 2024[134]