Canada Goose(US:GOOS)2022-11-02 19:07Financial Data and Key Metrics Changes - Total revenue grew 19% to $277.2 million, with a 22.3% increase on a constant currency basis [12][36] - Adjusted EBIT increased 70.1% to $29.6 million, exceeding guidance expectations [46] - Adjusted net income attributable to shareholders rose 63.1% to $23 million, translating to $0.22 per diluted share [47] Business Line Data and Key Metrics Changes - Direct-to-Consumer (DTC) revenue increased 15.6% to $94.8 million, with a 18.5% rise on a constant currency basis [36] - Wholesale revenue increased 21.2% to $180.7 million, with a 24.7% increase on a constant currency basis [38] - DTC comparable sales declined by 4%, but excluding Mainland China, growth was 3.2% [37] Market Data and Key Metrics Changes - North America saw revenue growth of 20.3% in the U.S. and 25.2% in Canada [40] - EMEA revenue grew 34.4%, with a 43.7% increase on a constant currency basis, driven by wholesale expansion [41] - Asia-Pacific results were negatively impacted by COVID restrictions in Mainland China, with a decline in store traffic [43] Company Strategy and Development Direction - The company aims to grow its DTC mix, deepen market presence, re-envision product offerings, and expand margins [16] - Plans to open more stores in key markets, including China, Japan, and South Korea, to enhance brand presence [17][19][20] - Focus on expanding women's business to align with industry standards, targeting a growth from 50% to a higher percentage [24][26] Management's Comments on Operating Environment and Future Outlook - Management acknowledges ongoing macroeconomic challenges but expresses confidence in the brand's strength and long-term growth potential [7][10] - Revised revenue guidance for the year is now $1.2 billion to $1.3 billion, down from previous expectations [53] - Anticipated adjusted EBIT for the year is now $215 million to $255 million, reflecting cost control measures [55] Other Important Information - Gross margins increased by 180 basis points to 59.8%, driven by pricing and lower product costs [45] - Inventory levels rose to $511.5 million, with a portion attributed to the Japan joint venture [49] - The company maintains a non-promotional brand strategy, focusing on long-term brand health [106] Q&A Session Summary Question: How does the company assess brand strength in Mainland China amid disruptions? - Management remains confident in brand strength, citing strong performance during key shopping events and continued lease signings in prime locations [65][66] Question: What cost control measures are being implemented? - The company is tightening discretionary spending and focusing on strategic initiatives while maintaining marketing investments [70] Question: What are the expectations for e-commerce trends in China? - E-commerce is performing well, with the website being the best-performing channel despite store closures [96] Question: How does the company view the role of Wholesale in the current macroeconomic environment? - The company continues to manage Wholesale closely, ensuring partners are set up for a successful holiday season without significant changes to the channel's role [99] Question: What are the inventory expectations moving forward? - Inventory is healthy, and the company does not foresee a need to adopt a promotional strategy, maintaining a focus on brand integrity [106]