Canada Goose Holdings Inc

Good day, and thank you for standing by. Welcome to the Canada Goose Q4 2022 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Amy Schwalm. Please go ahead.

Thank you, Operator, and good morning, everyone. With me are Danny Reese, Chairman and CEO, Jonathan Sinclair, EVP and CFO, and Carrie Baker, President. Our call today, including the Q&A portion, contains forward-looking statements. Each forward-looking statement, including our financial outlook, is subject to risks and uncertainties, that could cause actual results to differ materially from those projected. 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 the risk factors section of our most recent annual report filed with the securities regulators. 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 them. Lastly, our commentary includes certain non-IFRS financial measures, which are reconciled at the end of our earnings press release. With that, I will turn the call over to Danny.

Thank you, Amy, and good morning, everyone. Earlier, we released our Q4 and fiscal 2022 results, as well as our outlook for 2023. Despite the challenges in today's environment, I am proud that we are closing the year with record sales, breaking the $1 billion mark for the first time. We are also ending fiscal 2022 with confidence and conviction in our brand, our business, and our team. It's against this backdrop, that I will share our plans to achieve an even stronger outlook for the year ahead. We are excited about the key investments and progress we have made to significantly accelerate earnings growth in fiscal 2023. We expect to generate between 19% and 21% EBIT margins on revenue between $1.3 and $1.4 billion. This translates to EPS growth in the range of 47%, to 74%. Turning to our results from the fourth quarter. From a geographic perspective, our retail performance in North America was the biggest driver of growth. Consumer confidence remains strong, and shoppers have returned to pre-pandemic trends. We saw a similar environment in the UK, which drove EMEA's increase. In the rest of Europe, we saw softer local and international traffic trends. APAC was the only region that declined due to ongoing COVID restrictions, including store closures in mainland China. The Chinese government has a strong track record of being very proactive in containing COVID outbreaks. We do not expect the prevailing circumstances to have a meaningful impact on results in our busiest season, which is reflected in our outlook. Recently, many peers have pointed to continued production and supply chain challenges in as well as logistical delays. This was not a factor for us in the quarter, nor do we expect it to affect the year ahead. We continue to be uniquely insulated against supply chain issues due to our Canadian manufacturing, which accounted for 84% of our total units in calendar 2021. As I mentioned earlier, we marked a revenue milestone in fiscal 2022. We also laid the foundation to achieve our fiscal 2023 targets on our way to the next billion dollars in sales. I would like to recap some of our announcements from this past quarter. Last month, Kerry Baker, a Canada Goose veteran and previously President of North America, was appointed President, Canada Goose. This new role consolidates our commercial leadership team and marketing under Kerry. I am so excited to see all that Kerry is going to accomplish given her incredible track record. In March, we announced the appointment of Belinda Wong, chairman at Starbucks China and executive vice president, Starbucks, to our board of directors. Belinda has more than 20 years of extensive experience in China and the Asia Pacific region, and I am thrilled to have her on our board. And finally, we're very excited about recent developments to accelerate our business in two key markets in Asia Pacific, building on a successful foundation that we have built in mainland China over the past four years. Recently, we signed a distribution agreement with Latte Group to significantly grow our South Korea business. This is a major untapped market in terms of both size and influence. This agreement allows us to further develop our brand in the country's best locations while providing a clear, longer-term path to retail expansion and direct participation. As well, in March, we announced Canada Gives Japan, a joint venture with our long-standing partner, Sazabi League. Japan is the second biggest market in Asia and one of the most influential luxury markets in the world. This joint venture will have an immediate impact on revenue and gross profit. We expect Canada Gives Japan to double its revenue contribution this year versus last year and at a higher gross profit per unit. This new venture will accelerate our direct-to-consumer expansion in Japan, and I look forward to updating you on our progress. This leads me to the first tenet of our long-term growth strategy, driving our direct-to-consumer mix higher. In 2022, DTC revenue represented more than two-thirds of our business at $740 million. I am incredibly proud of our trajectory having only opened our first e-commerce site in less than seven years ago. Not only is our DTC strategy driving revenue growth, but it is driving the most profitable growth for us. In 2022, our DTC growth margins were 76%, with a contribution margin in the high 40s. In fiscal 23, we plan to continue to expand our retail network, adding up to 13 stores globally. We also plan to strengthen our e-commerce business by expanding our omni-channel operations to the UK, as well as launching a new e-commerce site in Europe. Not only did our direct-to-consumer business allow us to reach consumers when and where they want to shop, it allowed us to build deeper relationships and gain even stronger insights. Penny Brook, our Chief Marketing Officer, is now also leading consumer experience, and there couldn't be a more passionate person to take this on. Putting the customer at the heart of every decision we make has long been a top priority for us. Earlier this month, Forbes magazine named Canada Goose one of the most consumer-centric brands in the world, and we cannot be prouder. I look forward to the new heights we'll reach under Penny's leadership. Category expansion is another key driver of our growth strategy. We are seeing tremendous success from our year-round non-parker offerings. In 2022, we saw our non-parkour revenue grow by more than 70%, driven in large part by our lightweight down vests and apparel. This represents a huge opportunity for us, and I'm thrilled at the success we're seeing across such a large assortment of product categories. We also believe our products should reflect our commitment to protecting the planet. That commitment starts with the materials we choose, using more recycled, organic, and other responsibly sourced inputs. Our Kind Fleece is an ultra-soft, breathable fabric made with recycled and bio-based materials. This new fleece is one of our latest products that reflects our human nature platform to keep the planet cold and the people on it warm. Being a leader in sustainability is another key focus for Canada Goose. As part of that commitment, we recently issued our third annual ESG report. We continue to make important progress on our materials and operational goals. Most recently, we became responsible down certified as a brand and as a manufacturer. On the operations front, we continue to track well against our goal of net zero carbon emissions by 2025. In January 2022, I was also very proud to sign Canada Goose to the United Nations Global Compact. We remain absolutely committed to respecting and protecting the fundamental human rights of those directly and indirectly a part of our company, and supporting inclusive, safe, and healthy working conditions. Before I turn it over to Jonathan to discuss the results and outlook in more detail, I want to thank the global Canada Goose team for all their efforts in building an even stronger foundation for future success. Our brand relevance and pricing power enable us to move with confidence in pursuit of the tremendous growth opportunities in front of us. Our confidence is reflected not only in our guidance, but also in our repurchase of over $250 million in shares this past year. We look forward to an unprecedented year ahead and updating you along the way. And now I'll hand it over to Jonathan, who will discuss the result in greater detail.