Canada Goose(GOOS)2024-11-07 19:28Financial Data and Key Metrics Changes - Revenue in Q2 decreased by 5% year-over-year or 6% on a constant currency basis, primarily due to a decline in DTC revenue and a planned decrease in wholesale revenue [60][62] - Adjusted EBIT was CAD2.5 million, down from CAD15.6 million in the second quarter of last year, with adjusted net income attributable to shareholders at CAD5.2 million or CAD0.05 per diluted share compared to CAD16.2 million or CAD0.16 per diluted share in Q2 fiscal 2024 [71][73] - Gross profit decreased by 9% year-over-year, with gross margin declining 260 basis points to 61.3% [70] Business Line Data and Key Metrics Changes - DTC comparable sales declined 13% year-over-year, with DTC revenue down 5% or 6% on a constant currency basis [9][62] - Wholesale revenue was down 15% or 17% on a constant currency basis, reflecting a planned lower order book [66] - Revenue in the other channel segment increased to CAD26.6 million in Q2 of fiscal 2025, up from CAD9.7 million in Q2 of fiscal 2024 [68] Market Data and Key Metrics Changes - North America revenue decreased 3%, while Asia Pacific revenue grew 3%, mainly due to higher travel retail revenue in Greater China [61] - EMEA revenue decreased by 17%, primarily due to a planned decrease in wholesale revenue [61] - Store traffic and conversion declined year-over-year globally, although EMEA saw improved performance [25] Company Strategy and Development Direction - The company is focused on three key operating imperatives: brand and product evolution, luxury retail execution, and operational simplification [13][21] - A new design studio in Paris has been established to support product innovation, with a focus on launching new collections [14][15] - The company aims to drive positive DTC comparable sales growth and enhance brand presence through strategic marketing initiatives [10][11] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a challenging consumer environment impacting sales, leading to a lower range for guidance [12] - There is optimism about the brand's resilience and potential for growth, particularly in the second half of the fiscal year [20][82] - The company expects to see improvements in sales performance as marketing investments ramp up and new product launches occur [64][81] Other Important Information - Inventory at the end of Q2 decreased by 9% year-over-year, marking the fourth consecutive quarter of decreasing inventory balance [56] - The company has introduced a new Head of Merchandising to strengthen long-term product strategy [34] Q&A Session Summary Question: Can you discuss the shift in marketing dollars and any stores under consideration for closing? - Management indicated no current consideration for closing stores, focusing instead on driving productivity and profitability [92] - Marketing spend is expected to be slightly up year-over-year, with a more aggressive approach in the second half of the year [94] Question: What are the plans to improve comps for the remainder of the year? - Management emphasized the importance of staffing, training, and inventory management to drive sales, with positive signs in EMEA and APAC [98][100] Question: Can you elaborate on the new Head of Merchandising's priorities? - The new Head of Merchandising will focus on broadening the product assortment while ensuring clarity and distinctiveness in the brand's offerings [110][111]