Canada Goose Holdings Inc

Good morning. My name is Denise, and I'll be your conference operator today. At this time, I'd like to welcome everyone to the Canada Goose first quarter 2021 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. To ask a question, please press star 1 on your telephone keypad. To withdraw your question, press the pound key. Please limit yourself to one question only, then recue for any additional questions. Thank you. I would now like to turn the call over to Patrick Burke, Vice President, Investor Relations. You may begin your conference.

Thank you, and good morning, everyone. With me are Danny Reese, President and CEO, and Jonathan Sinclair, EVP and CFO. After prepared remarks from Danny and Jonathan, we will take your questions. This call, including the Q&A portion, includes forward-looking statements. Each forward-looking statement is subject to risks and uncertainties that could cause actual results to differ materially from those projected in such statements. Certain material factors and assumptions were considered and implied in making these forward-looking statements. Additional information regarding these forward-looking statements, factors, and assumptions is available in our earnings press release issued this morning, as well as in the risk factor section of our most recent annual report filed with the SEC and Canadian securities regulators. These documents are also available in the investor relations section of our website. These forward-looking statements made on this call speak only as of today, and we undertake no obligation to update or revise any of these statements. Our commentary today will include certain non-IFRS financial measures which are reconciled in the table at the end of our earnings press release issued this morning and available on the investor relations section of our website. Please note that there was a missing line item in the reconciliation table for adjusted net income provided in our release this morning. The full reconciliation is provided in our MD&A, and this missing item will be updated shortly on our website. With that, I will now turn the call over to Danny.

Thank you, Patrick, and good morning, everyone. I hope that you're all doing well and staying safe. As you know, COVID-19 has changed the world in ways that we never could have imagined. We've seen countries locked down and economies put on pause, and only recently have they started to reopen. For Canada Goose, like everyone, we were forced to close, but restrictions have eased, and as of today, all of our factories and all but one of our stores have resumed operations. I have long believed that adversity demands change, derives innovation, and reveals winners. For Canada Goose, that has never been more true than it is today, as we begin to see signs of recovery around the world heading into our most important seasons. We have met short-term adversity with deliberate and decisive action, and at the same time, we have rapidly accelerated long-term strategic projects. Last quarter, I spoke about our focus, With so many unknowns, we quickly responded by leaning into what we know to be true. And now, with another quarter behind us, our approach has been galvanized. Where we face uncertainty, we've focused on discipline and flexibility. And where we see opportunity, we've accelerated our strategic plans. In terms of uncertainty, we've set our sights on three main areas. One, managing cash flow. Two, approaching wholesale with purpose. and three, maintaining flexibility with production. Going into Q1, we set an ambitious target to reduce planned cash expenses and investments by $90 million. With a tight timeline and a concentrated effort across every part of our business, we succeeded in doing so. In the quarter, the cash impact of temporarily losing our revenue sources was more than fully offset by this savings initiative. Swift action has also been taken with distribution. As you all know, the impact of COVID-19 on our wholesale partners has been significant. We made the call early in the pandemic to temporarily put our wholesale business on pause. This helped us maintain full price integrity in what became a promotional environment for many other brands. We are grateful for how collaborative our partners have been, and we are happy to see many of them on the road to recovery. However, as the future remains uncertain, we are taking a purposeful approach to wholesale. With physical doors now reopening, we are one of the core brands that our retail partners have indicated will drive their own recovery this fall. We expect the impact of our strategic and deliberate approach to managing this channel to play out in two ways. One, later shipments relative to last year, which is more in line with the just-in-time delivery model we're seeing across the channels. and which is different from previous years. And secondly, a lower annual wholesale revenue. When it comes to manufacturing, our approach to production this year will be limited, flexible, and deliberate. Specifically, we will be focusing on two areas, adding depth to our key top-performing core styles and building strategic newness and collaborations to drive brand heat and momentum. This assortment, in combination with the already healthy finished business position that we came into the year with, will enable us to build, drive, and fulfill demand while drawing down on our existing inventory to end the year with a lower inventory position relative to last year. You will hear more on all of this from Jonathan shortly. Now, where we see opportunity, we are accelerating our strategic plans. The adversity that we face in the near term will not distract us from where we are going. Despite the disruptions of the past few months, we've accelerated a number of key strategic initiatives that will do the following. One, enhance and expand our digital business. Two, double our retail footprint in mainland China. And three, set the stage for our expansion into footwear. The first area is digital. Over the past few months, we've seen the already rapid adoption of online shopping accelerate even faster. To address the shifts in consumer behavior, we are accelerating investments in our in-house global e-commerce platform and omni-channel capabilities. This fall and winter, we will launch a cross-border e-commerce solution, expanding the international reach of our business. And following a very successful pilot in Canada, we will expand our mobile omni-channel capabilities to our U.S. stores, unlocking the potential of our inventory across both markets. Our vision is simple. We want Canada-use fans to be able to shop with us wherever they are and whenever they want. And we want them to have access to our complete assortment. The next area is mainland China, where we are concentrating our new store expansion this year, doubling our retail footprint in the region with four new stores. In June, we celebrated our first opening in Chengdu. Thanks to our digital insights, we knew demand in the region was strong going in, and the store is performing well relative to our expectations. Overall, the retail recovery in mainland China is ahead of other regions, and so serving the world's largest luxury consumer at home has become increasingly crucial. We believe that our strategic approach to growing our mainland China DTC business this year has us very much on the right track. The third area is footwear. We've recently announced the appointment of Adam Meek as General Manager of Footwear and Accessories to lead our entry into the category. Adam comes to us with more than 20 years of global experience with a number of leading global brands. His entrepreneurial spirit and passion for product make him a perfect fit at Canada Goose. Now, with Baffin's well-earned reputation, Paul Hubner's decades of experience, and Woody Blackford's leadership and global product strategy, we have all the pillars in place. We have taken a deliberate approach to this category. And now as we execute against our strategy, we expect the first expression of Canada Goes Forward to be available in select markets as early as fall or winter 21, with a full commercial launch in the years to follow. I believe we have an incredible opportunity in front of us in footwear to bring a new perspective to the marketplace and to find the intersections. of luxury and function in a way that's never been done before. And I look forward to sharing more with you in the statements to come. To finish, I want to share some thinking around today's consumer. In times of adversity, people want products that have purpose, products that stand the test of time, and products that help them survive. In a work-from-home world, people are gravitating to being outdoors and connecting with nature. We expect that to continue as we get into the fall and winter months and we hit peak seasonal relevance. As well, now more than ever, people are placing their trust in brands to drive change and to help shape the societies in which they operate. By this fall, our Canada Goose response program is on track to deliver more than 2 million units of PPE for frontline workers, all manufactured at cost. And in June, we donated 20,000 sets of scrubs to the Mount Sinai Health Network in New York, making our first international donation. I am proud of our team's work and all that we've been able to accomplish in support of the fight against COVID-19, both at home and now internationally. In summary, we have rallied through a near total shutdown of our business globally, and thanks to the relentlessness and passion of our people and the strength of our foundation, we are well positioned for the future. What we stand for as a brand has never been more relevant and we are firmly in control of our destiny. Thank you all for joining us. And with that, I will turn it over to Jonathan to go over the details of our financial results.