Canada Goose Holdings Inc

Good day and welcome to the Canada GOOST first quarter 2023 earnings conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touch-tone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Amy Schwalm, VP of Investor Relations. Please go ahead.

Thank you, Operator, and good morning, everyone. With me are Danny Reese, Chairman and CEO, Jonathan Sinclair, EVP and CFO, and Kerry 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 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 press release. With that, I will turn the call over to Danny.

Thanks, Amy. Good morning, everyone. This morning, we released our results for first quarter of fiscal 2023, and I'll start with some highlights from the quarter. In Q1, we reported revenue growth of 24%, hitting almost $70 million. This was ahead of our expectations and we are very happy with the trajectory of our business as we move into the fall season. North America continued to be a standout market for our brand. As of June, our stores in mainland China have all reopened and we are seeing positive signals as consumers are returning to stores. In addition, our Made in Canada model continued to help insulate gross margins for us at a time when others are seeing erosion. Our first quarter while the smallest, has always been an indicator of brand strength. Combine that with our exciting product launches, store openings, and the progress we've made against key strategic objectives, I believe we have what it takes to seize the tremendous opportunities that lie ahead of us. From a macro perspective, I think it is important we acknowledge the concerns of a global recession and the uncertainty and volatility of today's world. However, at Canada Goose, as of today, we have not seen any signs of slowing demand. I think it's also important to highlight the strength of our performance through previous recessions. Canada Goose has grown substantially through every recession, save the first wave of COVID. I believe that this is a testament to our products, grounded in performance and functionality, as well as our brand, our luxury positioning, and the brand heat our teams continue to drive around the world. I'd like to give an update on the progress that we continue to make against four key pillars of our long-term strategy. One, growing our direct-to-consumer mix overall. Two, increasing our penetration in key markets. Three, re-envisioning our product offerings. And finally, expanding our margins. In the quarter, across our direct-to-consumer business, we saw comparable sales growth of 10.7%. This is due to strengthening traffic trends and enhanced productivity across our existing store network. As I mentioned, North America performed very well and we see no signs of slowing demand. The U.S. continued to show significant gains on top of those we made through the pandemic with Canada's trajectory surpassing the U.S. in this quarter. The U.S. specifically has a tremendous amount of white space to grow our store network and expand our customer base. We began our West Coast expansion in 2021. We opened our first Californian location in South Coast Plaza last October. That opening was followed by a pop-up store in Seattle's Bellevue Square last November. We will continue to expand our West Coast footprint this year with new stores in Las Vegas, at the shops at Wynn, and in Denver at Cherry Creek, both opening by the end of this calendar year. We have further store openings planned in the U.S. this fiscal, and I look forward to continuing to update you on our progress. With just 43 stores globally, we have so much room to grow our retail store network. We approach new locations strategically and deliberately, placing our stores in some of the most preeminent shopping destinations in the world. Brick and mortar remains a key strength for our business, a meaningful touch point for our customers, and an opportunity for growth as we move forward. In Europe, we are starting to see the return of tourism, which is very encouraging. Recovery across markets varies, France showing the strongest signs of improvement. In Germany and the UK, where we have our highest concentration of stores in the region, tourism is also recovering, albeit at a slower rate. We are in the early stages of our retail store journey in EMEA. Six stores opened during the pandemic, and they are finding their momentum after a few volatile years. The development stage of these stores is reflected in our expectations for fiscal 2023. We continue to leverage our influential wholesale partners for reach and for awareness. Their strong order books also confirm brand heat in the region. Turning to Asia Pacific, as I mentioned earlier, as of June, all our stores in APEC are open and we have begun to see positive momentum as shoppers return to stores. We remain cautiously optimistic in mainland China given the proven resilience of the consumer and due to the operating environment that we see today. Last quarter, we spoke about our plans to open four new stores in China in fiscal 2023. We opened in Xi'an in May of this year with Tianjin Mixi, Qingdao Hisense Plaza, and Chengdu SKP set to open this fall. Our Tianjin Mixi store will be one of our largest in mainland China and will include our award-winning cold room experience. Our Qingdao Hisense Plaza store places Canada goose in one of the most preeminent shopping destinations in this coastal city of almost 9 million people. Finally, our Chengdu SKP store will be our second in the city and our fourth within the highly influential SKP group of properties in mainland China. Moving on, last quarter we announced our joint venture in Japan. Before the end of the calendar year, we plan to open two new stores in Japan. There are also further store openings planned for calendar year 2023, and I will share those with you in the coming months. South Korea represents a tremendous amount of opportunity for us, having transitioned to our new distributor, Lotte Group. We have an incredible amount of white space in which to grow in South Korea relative to others in the market, as well as our own typical market share. We believe we have the right model and the right partner in place to deliver success in the short term and the long term. For both Korea and Japan, we envision multiple new store openings over the next three to five years, as well as dedicated e-commerce capabilities in both markets, which will drive DTC growth in our APAC region. A key element of our growth strategy is expansion into new product categories. We are proud of the progress that we have made globally as a performance luxury lifestyle brand. Let me share some recent examples of success from the first quarter across our DTC business. Lightweight down sales have grown more than 90% since Q1 last year and represented 40% of the total sales in the first quarter. In our apparel category, fleece and knitwear have grown more than 60% over the same period. And all told, non-heavyweight down revenue accounted for approximately 60% of our total sales in the first quarter. That's the highest percentage of non-heavyweight down that we've ever realized. This is just a snapshot of one quarter, but this gives us confidence in our ability to successfully expand new categories. Expanding on that, in September we will launch a new collection that combines the style, performance, and versatility women consumers are looking for with new silhouettes and elevated fabrics and trims. We are taking meaningful steps to grow with the female consumer while continuing to build on the strength of the men's business. To support this key moment, this fall, we will launch our first all-female global campaign featuring an iconic cast of extraordinary women who live in the open. We have a tremendous opportunity with our women's business as we continue to evolve and expand our offering and I look forward to the launch in September. As we noted in our last conference call, we plan to accelerate profitability in fiscal 2023. Jonathan will talk more about this in a moment, but we feel very good about our Made in Canada model and the advantages it provides us against an ever-evolving backdrop. We also feel strongly about the opportunity ahead of us. As I've said in the beginning of my remarks, our first quarter has always been an indicator of brand strength and the year ahead, and we see positive signs across all of our business. Our exciting product launches, store openings, and the progress we've made against key strategic objectives will help us deliver against the tremendous opportunities ahead. I will now turn it over to Jonathan to discuss our results in more detail and our outlook for next quarter.