Canada Goose(US:GOOS)2021-11-05 17:13Financial Data and Key Metrics Changes - Total revenue increased by 40% to $233 million, excluding temporary PPE sales from the previous year [30][41] - DTC revenue grew by 80% to $83 million, driven by strong retail recovery and a 34% increase in e-commerce [32][41] - Adjusted EBIT margin was just under last year at 6.9%, and adjusted EPS grew 20% to $0.12 per share [37][41] Business Line Data and Key Metrics Changes - Wholesale revenue increased by 25% to $148 million, reflecting a reversal of late order shipments from the previous year [31] - DTC gross margin was 73.7%, while Wholesale gross margin was 49.4% [34] - All geographic regions delivered total revenue growth greater than 30%, with Mainland China DTC revenue growing by 86% [33] Market Data and Key Metrics Changes - Mainland China was a standout performer, contributing significantly to DTC growth [33] - Retail traffic and store productivity showed strong recovery compared to last year, indicating positive market trends [24][25] Company Strategy and Development Direction - The company is focusing on expanding its DTC business, which is projected to account for nearly 70% of total revenue this year [24] - The launch of a new footwear collection is seen as a significant milestone, aiming to balance performance and luxury [14][20] - The company is committed to sustainability and has achieved certification under the Responsible Down Standard [123] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about entering the peak season, raising the financial outlook for the remainder of the year [13][41] - The company does not expect material revenue headwinds related to supply or shipping constraints [22] - There is confidence in the recovery of international retail traffic, which represents additional upside potential [44] Other Important Information - The company opened its first retail store in California, which features a unique snow room to enhance customer experience [23] - The footwear launch is expected to be a long-term revenue contributor, although it may not significantly impact this year's financials [68] Q&A Session Summary Question: Insights on the 1H-2H dynamic and confidence in revenue acceleration - Management noted a strategic shift towards DTC and resizing of the Wholesale business, leading to confidence in revenue growth for the second half [53][54] Question: Guidance on DTC and Wholesale performance - DTC performance is driving the upside in guidance, with recovery in store productivity and continued e-commerce growth [58][59] Question: Transition to fur-free products - The transition is on track, with non-fur parka styles performing well and contributing to increased outlook [65] Question: Footwear launch plans and financial expectations - The footwear category is expected to ramp up over time, with initial lower gross margins but potential for improvement as the category scales [70][86] Question: Impact of tourism on sales - International tourism is currently down, but management views its eventual recovery as a significant upside for the business [73] Question: Performance in China and e-commerce journey - China is a key market with strong growth, and the company is expanding its online presence through platforms like Tmall and JD [78] Question: Direct-to-Consumer growth drivers - DTC growth is attributed to strong performance in existing stores and e-commerce, with ongoing recovery compared to pre-pandemic levels [82][105] Question: Product mix and non-parka sales - The company continues to sell a diverse product mix year-round, with expectations for non-parka products to grow in the Wholesale channel [119][120]