Canada Goose Holdings Inc

Ladies and gentlemen, thank you for standing by. My name is Krista and I will be your conference operator today. At this time, I would like to welcome everyone to Canada GOOSE second quarter fiscal year 2025 earnings conference call. All lines have been placed on mute to prevent any background noise. And after the speaker marks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. And if you'd like to withdraw that question, again, press star one. Thank you. I would now like to turn the conference over to Ana Rahman, Vice President, Investor Relations. Ana, you may begin.

Thank you, Operator, and good morning, everyone. With me today are Danny Reese, our Chairman and CEO, Harry Baker, President of Brandon Commercial, Beth Clymer, President of Finance, Strategy, and Administration, and Neil Bowden, Chief Financial Officer. Today's presentation will contain forward-looking statements that are based on assumptions and therefore subject to risks and uncertainties that could cause actual results to differ materially from those projected. We undertake no obligation to update these statements except as required by law. You can read about these assumptions, risks and uncertainties in our press release issued this morning. as well as in our filings with U.S. and Canadian regulators. These documents are also available on the investor relations section of our website. We report in Canadian dollars, so all amounts discussed today are in Canadian dollars unless otherwise indicated. Please note that financial results described on today's call will compare second quarter results and it's September 29th, 2024 with the same period ended October 1st, 2023, unless otherwise noted. Lastly, our commentary today will also include certain non-IFRS financial measures which are reconciled at the end of our earnings press release. For today's call, Danny, Kerry, Beth, and Neil will deliver prepared remarks, following which we will open the call to take questions. With that, I'll turn the call over to Danny.

Thanks, Anna, and good morning, everyone. I'll start my thoughts on our second quarter results in progress and then turn it over to Kerry, Beth, and Neil to review our performance in greater detail. Following a solid start to the year with sales up 4% in the first quarter, Upline momentum decelerated in the second quarter, down 5% year-over-year. Our wholesale business performed as expected, down 15% year-over-year on a reported basis, as we continue to elevate the status of our brand presence within the channel. Our DTC business came under more pressure than anticipated, and we faced an increasingly challenging consumer environment. This resulted in DTC comparable sales declining 13% over the second quarter of last year. As Kerry will discuss later, we also shifted the timing of some of our marketing spend as we build excitement for the first capsule from our creative director, Heiner Ackerman, to be unveiled later this month. While this shift impacted Q2 results, we expect to see benefit from this activity over the second half of the fiscal year through more marketing dollars at work across several initiatives. As a reminder, approximately 75% of our revenue opportunity is still ahead of us this fiscal year based on our historical performance. we remain steadfast in our view that we can drive positive DTC comparable sales growth out of our stores in both the near and the long term. We are focused on executing with excellence for our busy holiday season and building an enduring brand that connects with our customers. In the second quarter, we took concrete action for our three key operating imperatives to set us up for success. That said, due to a softer second quarter and the weaker macro environment around us that has impacted consumer confidence, you will see that we introduce a lower range to our guidance. As a reminder, our three operating imperatives are, number one, setting the foundation for the next stage of our brand and product evolution. Number two, implementing best-in-class luxury retail execution. And number three, simplifying the way that we operate. I will share some insight into our first operating imperative while touching on some elements of our second and third imperatives, as both will be expanded upon later on. First, as it relates to preparing for the next stage of our brand and product evolution. Through the first half of this fiscal year, we set the foundations for long-term product design and development at Canada Goose, opening our new design studio in Paris and building a strong team that support Hyder in the execution of our product vision. We've come a long way building the infrastructure and capabilities in just a matter of months, and we are now just a few weeks out of launching Hydra's first capsule. I'm incredibly excited and incredibly proud of our teams and the progress that they've made to get us ready for this very important milestone. Just a couple of weeks ago, we started to tease Hydra's capsule with an exclusive launch in Iceland. We hosted a group of industry influencers and global media to experience his new collection against one of the most inspiring backdrops in the world. I was there myself to see the overwhelmingly positive response to his capsule, which will appear under the label Snogers. This is the brand name we operated under before we became Canada Group. With this capsule, Haider reached deep into our archives as a source of inspiration to innovate in both our core and newer product categories. This new collection represents where we've come from and where we're going, and will sit alongside Canada Goose's mainline. Haider's vision and his respect for where we've been makes this new collection a perfect expression of our future. In regards to our second and third operating imperatives, we have taken measured steps to simplify the way we work and advance our retail execution. As a result, we are well positioned for our peak selling season from having a product where it needs to be throughout our retail network to readying our stores to greet guests as they arrive and offer them elevated shopping experiences. You will hear more about these and other initiatives during today's call. When we spoke to you first about our three operating imperatives at the beginning of our fiscal year, we knew that execution would not be easy. We are in the midst of a transformation and transformation of this magnitude takes time, especially within the current medical backdrop. I spent my entire life in this industry. Trends and economic cycles come and go, but we have proven resilient through the evolution of our business. With this understanding, we are pushing forward, prioritizing the content and focus on driving change for long-term impact, which has had some short-term impacts on our results. We are committed to doing the hard things and making the hard decisions to fulfill our brand's potential, all of which is underpinned by a resilient business model, a strong brand backed by a deep heritage of quality and craftsmanship, a vertical integration, and a deeply committed team. As our key operating imperatives come together, we believe that our efforts will drive improvement in our overall business performance and enhance the strength of our brand. And with that, I will now turn it over to Kerry.