Canada Goose Holdings Inc

Good morning. My name is Andrea, and I will be your conference operator today. At this time, I would like to welcome everyone to the Canada Deuce third quarter fiscal 2021 earnings 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. If you would like to ask a question during that time, simply press star, then the number one on your telephone keypad. If you would like to withdraw your question, press the pound key. Thank you. I would now like to turn the call over to Patrick Burke, Senior Director, Investor Relations. Please 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 applied 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. These documents are also available on the investor relations section of our website. The 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 press release issued this morning and available on our investor relations website. With that, I will turn the call over to Danny.

Thank you, Patrick, and good morning, everyone. I am pleased to speak with you today about our performance in our third quarter, which has exceeded our expectations. We began this fiscal year with many unknowns, so we leaned into what we knew to be true. We advanced our long-term plans to best capture and serve demand while at the same time placing our business in the best position for continued growth. This approach has delivered strong results when it matters the most. Today, I will provide an overview of our third quarter results and share an update on three areas. One, our strategic areas of focus. Two, our purpose-based commitments. And three, our outlook for the rest of the fiscal year. In the third quarter of the fiscal year, our business showed remarkable resilience and we have outperformed our own expectations. Total revenue increased by 4.8% to $474 million, despite extensive closures and operating restrictions. This marks a return to growth for Canada Goose in our biggest quarter, and we did it with strong profitability and cash flow. Adjusted EBIT margin in the quarter was 33.3%. and free operating cash flow increased by $75.1 million to $309.6 million. Our third quarter results reflect the impact of our strategic long-term initiatives, our flexibility, and key investments. To give you further context, here are a few highlights. First, I'd like to give an update on our digital business, which we believe to be a foundational component of the future of retail. We have invested heavily in our e-commerce business for years with a long-term view. This year, we successfully executed against that long-term strategy and at the same time strategically deployed additional resources to better capture and serve demand around the world in our peak season. As a result, our global e-commerce revenue increased by 39.3%, And we are encouraged by the strong momentum and acceleration that we continue to see across our e-commerce business in the fourth quarter. This quarter, I feel it's important to give deeper geographical insight into our e-commerce business. Across each of our major markets, we saw strong double-digit growth. Europe was particularly strong. And this includes France, Germany, and Ireland, and a nearly doubling of our digital business in the UK. In mainland China, Tmall continues to be a bright spot and a powerful channel for our brand. And in our well-established sites in Canada and the United States, we saw a strong increase in revenue from a contribution perspective. Now, to our next strategic priority, mainland China. our last earnings call i spoke about the growth plans that we put in place for our business in the region we have continued to execute on these plans in the past year we have more than doubled the number of stores we operate in the market this quarter we saw that our investment has delivered strong results and our mainland china dtc revenue has increased by 41.7 percent we're still very early in our journey in mainland china and we see significant opportunity to continue to grow our network in the region. In a year that began with so much uncertainty, throughout it all, we've learned more about shifts in our customers' behavior, which has shaped our strategic approach moving forward. On our last call, I discussed in-store omni-channel shopping, which had just gone live. We believe that it would be a needle mover for customer experience and conversion, and I am pleased to say that it has been. As the path to purchase continues to evolve, this quarter we truly saw the power of the endless aisle. We consider this a validation of our approach and commitment to enable Canada Goose fans to shop with us wherever they are, whenever they want, and with access to our complete assortment. Today, I also want to highlight the continued importance of sustainability across our business. We are steadfast in our commitment to strengthening our communities, protecting our planet, and working towards a better future for generations to come. In this quarter, we introduced Human Nature, a purpose-based platform that unites our sustainability into values-based initiatives. It is the driving force of our enduring commitment embedded across every aspect of our operations. The role of business has evolved in today's world and driving meaningful change has become fundamental to today's consumer. We are focused on keeping the planet cold and the people on it warm through our sustainable impact strategy, continued product innovation, invigorating global communities, and building culture through the arts. We've been trusted to protect people from the elements, and now, through human nature, we are taking warmth to an even deeper level. Building on that, this past January, we launched our most sustainable parka to date, the Standard Expedition Parka. This brand-new style, inspired by the iconic Expedition Parka, encapsulates our heritage, renowned functionality, and epitomizes sustainable innovation. This product is a significant leap forward for our brand, helping to set the standard for the future of outdoor at Canada Goose. We have kept sustainability at the forefront throughout the past six decades, driven by constant innovation for the betterment of both our consumers and the planet. And I'm proud to say that this is only the beginning of a sustainable apparel journey and that the consumer response has matched our own excitement as the style has nearly sold out. Further to the topic of brand momentum and consumer relevance, last month we partnered with Shanghai based Angel Chen, our first ever guest designer. We challenged her to take her heritage pieces and co-create a capsule based on her innovative design direction. The collection is a relevant new perspective and another important hype moment for the brand. And lastly, I would like to take this opportunity to welcome Michael Armstrong, who joined our board of directors in January A 22-year industry veteran, he is currently EVP worldwide television licensing and operations for ViacomCBS Global Distribution Group. I'm confident that his vast popular culture, entertainment, and media exposure and experience will provide a valuable perspective as we continue to execute on our long-term growth strategy. And with that, I'll turn it over to Jonathan to go over the details of our final financial results and outlook.