Canada Goose(US:GOOS)2022-02-10 18:59Financial Data and Key Metrics Changes - Total revenue increased by 26.5% to $586 million, excluding temporary PPE sales from last year [21][30] - Adjusted EBIT margin expanded by 200 basis points to 35.3% and adjusted EPS increased by 42% to $1.42 per share [9][30] - Total SG&A was $184 million, up 27% from last year [30] Business Line Data and Key Metrics Changes - Direct-to-Consumer (DTC) revenue increased by 49% to $445 million, driven by higher revenue from existing stores, eCommerce growth, and retail expansion [22] - Wholesale revenue decreased by 15% to $137 million, attributed to a normalization of timing with shipments [23] - Non-parka revenue grew by 75%, with strong performance in vests, lightweight jackets, and footwear [24] Market Data and Key Metrics Changes - DTC revenue in Mainland China increased by 35%, although store traffic slowed in December due to COVID restrictions [25] - Revenue in EMEA increased by 16%, impacted by the absence of international traffic [26] - North America saw revenue growth of 32% in Canada and 26% in the United States, with established retail stores performing near pre-pandemic levels [27][28] Company Strategy and Development Direction - The company aims to build an enduring global lifestyle brand and expand year-round roles, with a focus on innovative collaborations and product offerings [13][15] - The launch of the HUMANATURE collection emphasizes the company's commitment to sustainability and environmentally responsible materials [16] - The company is confident in its inventory position and ability to navigate inflationary pressures going into fiscal 2023 [11] Management's Comments on Operating Environment and Future Outlook - Management views recent disruptions as temporary and remains optimistic about long-term growth potential [9][34] - The company expects to achieve strong growth and margin expansion even without a full retail recovery globally [34][55] - Management is confident in the brand's momentum and lifestyle relevance, supported by a unique supply chain [10][34] Other Important Information - The company has launched its first-ever footwear collection, which has generated strong consumer interest [14] - The company is expanding its eCommerce capabilities globally, with a successful launch in North America [12] Q&A Session Summary Question: Thoughts on store traffic regionally and marketing spend - Management noted that store traffic in North America remains strong, while Asia and EMEA are experiencing lower traffic due to COVID [38] - Marketing spend is maintained at a constant percentage of revenue, with no expected changes [38] Question: Clarification on margin outlook - The decrease in margin outlook is primarily due to sales deleverage from lower traffic, with expectations for recovery as traffic normalizes [43][45] Question: Details on Asia and China performance - Management confirmed that the primary issue in China is COVID-related restrictions, but online sales have shown strong growth [60][61] Question: Brand equity and competitive positioning - The company sees strong brand equity across all markets, particularly among younger consumers, driven by collaborations [71] Question: Store sales productivity and growth expectations - New store cohorts are performing well, and the company expects to continue opening stores at a rate of around 10% annually [75] Question: Thoughts on share price volatility and buyback strategy - Management emphasized a long-term focus on building a strong business, with share buybacks considered when share prices are attractive [82][83]