Canada Goose Holdings Inc. (GOOS) Q4 2026 Earnings Call Transcript

Hello everyone, thank you for joining us and welcome to the Canada Goose Q4 2026 earnings call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. I will now hand the conference over to Anna Rahman.

Good morning, everyone, and thank you for joining us today on the Canada Goose Q4 Fiscal 2026 Earnings Call. Today, you'll hear from Danny Reese, our Chairman and CEO, Neil Bowden, Chief Financial Officer, Carrie Baker, President of Brand and Commercial, and Beth Clymer, President and Chief Operating Officer. We'll start with prepared remarks from Danny and Neil, and then open up the call for questions. 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. Further information regarding these assumptions, risks, and uncertainties is included in our press release issued earlier today and available on the investor relations section of our website we report in canadian dollars so the amounts discussed today are in canadian dollars unless otherwise indicated please note the financial results described on today's call will compare fourth quarter and fiscal 2026 results ended march 29th 2026 with the same period ended march 30th 2025. And stated revenue percent changes are in constant currency, 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. With that, I'll turn the call over to Danny.

Good morning, and thank you for joining us. Fiscal 2026 was a year of focused execution across our key priorities in product brand and channel execution we made deliberate investments to strengthen the foundation of the business and the results are encouraging revenue grew 12 percent for the year and 18 percent in the fourth quarter direct to consumer comparable sales rose eight percent for the year and 10 percent in q4 our fifth straight quarter of positive comp growth driven by stronger conversion and broader customer engagement and wholesale return to growth up nine percent for the year, with a strong finish in Q4 as demand and sell-through improved. Just as important, our evolved marketing strategy drove accelerating brand momentum through the year. By extending our core strengths of performance and craftsmanship, we're expanding how and when people wear the brand. In fiscal 26, we expanded our customer base through both new acquisition and stronger re-engagement, broadening relevance, increasing purchase frequency and deepening connection and desire with our customers. We backed that momentum with the right investment and the right execution, which translated into meaningful progress across each of our operating imperatives in the fourth quarter. First, we expanded our product offering to enhance year-round relevance. In the fourth quarter, our expanded assortment continued to resonate with customers across seasons and occasions. Demand was supported by a balanced mix of heritage outerwear, lighter-weight styles, and new design expressions that broadened how and when customers wear the brand. We launched our Spring-Summer 2026 collection, our largest assortment to date for the season, and brought it to market earlier than in prior years, increasing visibility into our versatile offer. This strengthened our presence through the shoulder season and supported more consistent engagement beyond peak winter. and customers are responding apparel led growth in q4 and for the year while downfield outerwear remained the majority of our revenue and meaningful contributor to growth that dynamic is exactly what we've been building towards second we continued to build brand heat through focused marketing investments that supported revenue growth and improved brand health we saw gains in desire and momentum with stronger performance versus key competitive benchmarks in several core markets That brand momentum was clearly reflected in our fourth quarter performance. Marketing drove higher traffic and conversion across D2C around key product launches, supporting full price sell-through and reinforcing our luxury positioning of the brand. At the same time, we became more efficient, using better data and measurement to focus spend on what's working and where it can build the brand over the long term. Third, we drove business expansion through strategic channel development. Our approach remains consistent, elevate the D-to-C consumer experience while nurturing strategic wholesale partnerships that extend our reach, support the brand, and preserve the right level of control. In direct-to-consumer in the fourth quarter, we've improved execution through stronger merchandising, healthier inventory, and better conversion, while also tightening how we run the retail business. We are applying greater rigor to improve productivity across our network and actively reviewing the retail portfolio so that each location meets our return expectations. Our digital channel delivered strong growth in the fourth quarter. Enhancements to product discovery, content, and personalization made it easier for customers to find what they were looking for, creating a smoother path from browsing to checkout, further supporting conversion. We continue to improve this channel and are creating a more connected online to in-store shopping experience. In wholesale, the reset we started three years ago is complete and the channel has returned to growth. This reflects better product flow, healthier inventory, and stronger sell-through, with encouraging reorders for our fall-winter 25 assortment and continued momentum into spring 2026. Bringing spring summer to market earlier only strengthened that demand and we're pleased with how the channel is progressing. Our fourth imperative is operating efficiently with pace and accountability. In fiscal 2026, we strengthened the organization through targeted investments in people and technology with a clear focus on speeding up productivity and decision-making. That progress supported growth and drove underlying operating leverage in the year. The work that we've done positions us to take the next step, converting our momentum into greater profitability in fiscal 2027. Our focus is to leverage our brand strength and operating foundation to drive sustainable growth, expand margins, and improve returns. Our priorities for this year are clear, and we're executing against them with increasing consistency. First, we're deepening brand desire and increasingly translating that into demand through more effective marketing. Second, we're scaling a repeatable product playbook across seasons to drive greater year-round relevance. And third, we're improving channel productivity and capital efficiency to increase conversion and customer value. Fiscal 2026 marked a step change for Canada, and I am very pleased with how the year has played out. We delivered against our objectives and built real momentum across the business. I want to thank our teams around the world for the creativity and commitment that you've all brought to executing our strategy this year. As we look ahead to fiscal 27, we expect to deliver meaningful profit margin expansion. Canada Goose has always been a strong brand, and now, at a larger scale, we're seeing that strength translate into deeper cultural relevance and commercial impact. With the investments we've made and the progress we're delivering, we have a clear path to becoming a more profitable business. And with that, I will turn it over to Neil.

Thanks, Danny, and good morning, everyone. The fourth quarter was a strong finish to fiscal 2026, reflecting solid top-line growth and improved execution across the business.

I'll walk through our results and how we're translating them into a more profitable profile as we move into fiscal 27. Revenue in the fourth quarter increased 18% year-over-year to $453 million, with all channels and regions growing. Full-year revenue grew 12%, reaching $1.5 billion for the first time. Turning to channel performance. Q4 D2C revenue increased 16% year-over-year, with growth across all regions. Comparable sales growth was 10%, led by strength in e-commerce, and was complemented by store performance. Demand was supported by continued resonance of our fall-winter 25 collection and early response to our spring-summer 26 assortment. For the full year, D2C comparable sales growth was 8%, reflecting more consistent execution across our product, brand, and channel initiatives. Wholesale revenue increased 52% year-over-year in the fourth quarter and 9% for the full year, reflecting the continued benefit of the channel reset toward brand-aligned partners and healthier inventory positions. In the quarter, growth was led by EMEA and Asia Pacific, supported by shipments related to our spring-summer 26 order book and in-season demand for our fall winter 25 assortment. As we look ahead, our outlook for fall winter 26 wholesale order book continues to reinforce interest and newness across the assortment, which we see as a leading indicator of the improving health and momentum of the channel. Moving to regional trends. In North America, Q4 revenue increased 11% year-over-year, supported by growth in D2C. Comparable sales declined at a modest 1% as improved conversion across channels was offset by store traffic pressure which was concentrated in a small number of high volume high tourism urban locations underlying demand and better conversion in our e-commerce channel led to sales growth asia pacific revenue increased 23 year over year driven by growth across dc and wholesale comparable sales grew double digits led by mainland china D2C performance reflected strong traffic, improved store and online conversion, and positive response to our Lunar New Year product capsule and associated marketing campaign. Wholesale growth was primarily driven by strong travel retail demand in the region. In Amiga, revenue increased 25%, driven by wholesale growth and continued strength in D2C. D2C comparable sales growth was in the double digits, led by e-commerce. Store performance in the quarter delivered growth, with most markets up against continued softness in the UK amid uneven traffic trends. We did see some softening in performance toward the end of the quarter, reflecting a more cautious consumer environment as geopolitical tensions increased, particularly impacting inbound travel-related spend and discretionary demand. Let's turn to gross profit. Fourth quarter gross profit increased 15% year-over-year, while gross margin declined 170 basis points to 69.6%. Central to our long-term strategy is expanding our year-round product relevance. In Q4, our spring-summer 26 collection was delivered to our channels much earlier than last year, but supported overall growth. Channel mix, with a higher proportion of wholesale revenue and higher freight and duty costs given our regional sales mix, were further pressure points on gross margin. For the full year, gross margin was relatively flat despite limited pricing benefit, higher freight and duties, and the deliberate push into product newness. We offset these pressures through ongoing value chain improvements and strong channel execution, particularly improved comp sales performance. It has been our long-standing track record to balance these headwinds and tailwinds across a number of years, and we are satisfied with the outcome of fiscal 26 with a view to opportunities moving forward moving to our expense profile total sgna expenses increased 14 year over year to 251 million in the fourth quarter slower than the 18 growth we experienced in revenue and delivering approximately 50 basis points of operating leverage adjusting for the impact of the earn out expense in the prior year which was excluded from adjusted ebit this reflects continued progress on cost discipline and improved efficiency as the business scaled. As part of our ongoing efforts to strengthen our store network, we recorded an $8 million impairment charge this quarter related to select underperforming locations. While this was dilutive in Q4, it reflects a more rigorous approach to assessing store performance. From a channel perspective, DTC operating margin declined 230 basis points year over year, largely reflecting the impairment recorded in the fourth quarter. Excluding that charge, underlying DTC operating margin was consistent with Q4 in the prior year, reflecting stable underlying profitability alongside cost efficiency and labor productivity. Wholesale operating margins improved year over year, supported by healthier inventory positions and a more focused partner mix. Corporate expenses increased 15% over the same prior year period, driven primarily by an increase in annual incentive compensation, reflecting strong performance against our targets. Excluding this impact, underlying costs remain well-controlled, demonstrating discipline and discretionary spend. Marketing costs, which are included in corporate expenses, declined 8% in Q4 versus the same period last year, another source of operating leverage. Earlier and more consistent investment throughout fiscal 26 allowed brand momentum to carry into Q4, leading to strong sales performance despite lower spend year over year. Together, this resulted in adjusted EBIT increasing by $5 million year-over-year to $65 million in the fourth quarter, while adjusted EBIT margin declined by 120 basis points to 14.3%. We exited the year with a strong balance sheet. Inventory of $386 million remained relatively flat year-over-year, reflecting strong demand and tighter inventory management, with turns improving to 1.2 times, up 20% versus last year and 33% versus two years ago. Our inventory position continues to get healthier, supported by better planning and a structured approach to managing product lifecycle in brand-appropriate ways. We are proud of our progress here and believe we can continue to improve this metric. Net debt declined to $383 million from $409 million a year ago, with the net debt leverage ratio remaining flat at 1.3 times EBITDA. Overall, we exited Fiscal 26 with a robust top-line performance, greater operating rigor, healthier inventory, and a more efficient cost structure, strengthening the foundation of the business and positioning us to more consistently convert growth into profitability and returns. This gives us confidence in our Fiscal 27 plan and our ability to grow revenue and expand margins through focused execution of the product, brand, and channel priorities Danny outlined. Let me now walk you through our outlook. For fiscal 27, we expect total revenue to grow approximately low single digits year over year. Growth will be driven by improved conversion, pricing actions implemented in April, and more effective execution across product, marketing, and channels. We expect growth to be led by D2C across both our stores and e-commerce channels, with wholesale also contributing, partially offset by lower other revenue, reflecting healthier inventory in our channels, leading to fewer planned friends and family events. At the same time, we are planning for a more challenging macro environment, reflecting softer demand trends exiting fiscal 26 and into April, which we expect will continue to weigh on consumer confidence and travel. On profitability, we expect adjusted debit margin to be in the range of 11% to 12% for fiscal 27, reflecting 130 to 230 basis points of margin expansion year over year. This improvement is expected to be driven by strong execution across multiple levers in the business, with contributions from both gross margin and SG&A. At the gross margin level, we expect improvement driven by a favorable channel mix, pricing flow through, and manufacturing and operational efficiencies already embedded in our inventory position. Based on what we see today, this assumes that the tariff environment in fiscal 27 is consistent with fiscal 26. Within SG&A, we expect to deliver operating leverage, balancing investments in our strategic channels with more efficient marketing and tight control of corporate costs. In addition, we expect to benefit from lapping non-recurring items from fiscal 26, including the bad debt provision related to a U.S. wholesale partner and store impairment charges taken in the fourth quarter. Our strategic channel investments in fiscal 27 include flagship openings in key markets scheduled for fiscal 28, with associated costs flowing through depreciation and amortization. We are also making upgrades to our logistics network in EMEA and e-commerce capabilities, with the bulk of the investment expected to be completed in the first half of the fiscal year. Both programs have clearly defined measurable returns with expected benefit this year. As a reminder, approximately three quarters of our revenue has historically been generated in the second half of the fiscal year, while much of our fixed cost base is incurred more evenly throughout the year. As a result, we expect modest margin pressure in the first half followed by expansion in the back half as revenue scales into and through our peak selling season in line with historical trends taken together our fiscal 27 outlook reflects a balance of confidence and prudence we remain focused on driving margin expansion and improving profitability despite a more complex operating environment in closing we're proud of the entire Canada Goose team accomplished in fiscal 26, both in the execution of our strategy and in laying the foundation for durable margin expansion beginning in fiscal 27. We are collectively excited about our plans for this upcoming year and look forward to updating you on our progress. Now operator, you can open up the call for questions.

We will now begin the question and answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Rick Patel with Raymond James. Your line is open. Please go ahead.

Thank you. Good morning. I wanted to better understand the assumption for guidance that demand will soften in fiscal 27. Does this reflect trends that you're seeing early in the year, or is there something about the order book that gives you a little bit less confidence?

Just trying to understand if it's something currently being felt or whether it's a conservative view given the volatile macro morning rick uh thanks for your question it's neil um i'll start uh and then um if carrie wants to jump in on any of the demand trends um she will so i think um let's just start with uh we exit q4 with a lot of in our sales obviously top line was very strong um across channels across regions um and so uh you know we're certainly feeling good about what the momentum is showing and obviously that's not just the last three months there's there's been strong momentum really here for for quite a while um the things that are in our control as we turn

the page into 27 are things like pricing which uh we've implemented a pricing change now early in our fiscal year uh we expect that to be a benefit we know what our wholesale order book looks like and as you heard we've had some strong momentum here in the fourth quarter um that also gives us a bit of confidence um looking forward we know we're going to open a handful of new stores again that's positive um and we've got lots of work left to do on d2c execution so let's put all of the sort of positives in one box um i i think where we see some level of conservatism here is not just in the early part of the fiscal year this year or in the last few weeks of of the year it's a little bit of a broader sense that um the macro environment is going to be more challenging than it was a year ago. I don't think we know how much more challenging. And so we want to give ourselves a pretty wide range of outcomes. And our focus, you know, with respect to what the demand is, is doing the things that are within our control. And as I've outlined, there are a number of them and we feel really good about those.

Got it. And also wanted to better understand the levers that you have around SG&A. So expectations have slowed the growth this here, can you just help us understand, you know, where you see room to pull back on the investment spending? And, you know, does this play into your expectations for softer revenue as well? Or is that just a macro point of view?

Yeah, I'll take that. This is Beth. We are really proud of what we accomplished in Q4 with regards to EBIT margin expansion. We were laser focused on delivering that expansion at both the channel and the consolidated level um on both aggregate margin and sgna and obviously we exclude the store impairments we did that and we're really really proud of that um that was even with some annual costs that you know disproportionately hit the quarter so as we look to fiscal 27 we expect that trend to continue for sgna growth to remain below revenue growth supporting that growth and operating leverage there's really opportunity on a number of different dimensions. Obviously, you've heard us speak about the investment in store labor this year. That investment remains incredibly important, but we can do it smarter, and we can do it in a more directed way at the store level, at the day part level, to really ensure that we're driving optimal labor productivity while still driving that great comp growth momentum. Similarly, marketing. We made a tremendous amount of progress on kind of driving brand heat and energy this year with that marketing. a lot of top of funnel investment. That is going to continue, but we can do it smarter. There were some investments made last year that don't need to recur, but the momentum is still there. So we don't view that pullback of investment as something that should at all hamper our ability to drive great comp growth. It's just a matter of focusing more on the ROI and the precision of those investments to drive margin expansion. And then lastly, obviously we have now for two years in a row delivered really solid uh operating leverage on our controllable overhead investments that will continue we were able to do that this year while simultaneously making important investments in teams like product creation that are pivotal to driving the product evolution you've seen so we'll continue those investments in a judicious way but continue driving the control in the rest of the cost bar to drive controllable overhead leverage so overall we feel we've got some a number of really strong levers available to help drive against the margin expansion goals you heard Danny and Neil speak about.

Thanks very much.

Your next question comes from the line of Oliver Chen with TD Cowan. Your line is open. Please go ahead.

Hi. Thank you, Danny and Neil. As we think about the guidance for revenue growth, what are your thoughts in terms of North America relative to Asia and the trends that you're seeing relative to how you're guiding and what we should expect given that there's different footprints and different traffic and conversion considerations. And then, Danny, as you mentioned repeatable product, would love your thoughts on that relative to all the momentum you're seeing with new and apparel and the latest in terms of the customers you're obtaining from the newer lifestyle product as well. And third and final on marketing, how should we think about marketing as a percentage of sales or the dollar amount or anything we should know on potential shifts or what you're interverturing as we look ahead to next year. The demand creation is important and I'm sure you're balancing the marketing spend relative to revenue growth. Thank you.

Thanks for your questions. I'll start with guy's question and then we'll rotate on the other answers. So in terms of the market health and sort of what we're seeing today, both through the fourth quarter and where we exit the year, we're expecting to have growth in all markets and in all channels. And so we feel like we've got the right mix. I mean, certainly the fourth quarter results in both Europe and Asia were stronger than they were in North America, as you heard, but we did see growth in each of those regions. We're focused a little bit on the impact of what's going on in the Middle East, in Europe in particular, where there's been much less inbound traffic. And that's a market where we have historically had good levels of inbound traffic and luxury purchasing from places outside of Europe. So that's an area where stored traffic remains under pressure.

And and you know we've got the ability to compensate for that with a really healthy e-commerce channel i think the north american traffic trends are are fine um probably like to see those a little bit healthier uh and so as we enter fiscal 27 you know some of the caution there is really about um you know is the traffic in the store how much the traffic in the store uh can be maintained and you know to the extent that's pressured can we offset that with with the conversion improvements that we've seen now over the last 18 months um asia generally speaking it remains pretty healthy um and so um you know i i guess we'd say you know as we said a few minutes ago a lot of tools in the toolkit here to drive revenue but uh we're monitoring sort of the

macro environment and the health of the consumer in each of those markets and reacting accordingly yeah thanks neil and thanks oliver talking about products um we've really uh invested a lot into to our product creation, product development engine. And over the past few years, I'm really happy with where we are at the current moment. We are in a place where we are able to create beautiful and desirable products at the right margin and at the right price point for our consumers. And when we're able to do that, consumers and our consumers have always wanted to buy best products from us. And it continues to drive our customers into our stores and online across all seasons, our product in all categories. These days, our past-growing category is apparel, and our new categories in the spring products and apparel products are performing extremely well, and we're very happy about that, and we're going to continue to grow into those categories, and while at the same time, we continue to hold our strength and our core outdoor products. So overall, our product completion is strong, it's getting better, And I'm very, very confident in the trajectory that we're on in regards to our product creation.

I'll take a third one. Actually, I'll pick up on the product. I'll look at Gary. The newness that Danny is talking about, I think when you walk into our stores or when you go visit us online, it's a very different feel. There's energy. There's different color palettes. That is obviously a direct influence of fighter. Looking at, you know, spring 26 was his first mainline collection that he ever saw. And so when you look at the results in Q4, that newness isn't just about great products or driving incremental sales. It's also about giving us more stories to connect with our consumer with. So when you've got great products and you see the marketing, the marketing just works so much better. And so your question around, you know, how do we think about that as a percentage of sales this year? It's going to be lower. You already saw that in Q4, and it's new to drive momentum from a brand perspective, from a traffic perspective, from a conversion perspective. So great product. Then you have the great marketing. You've got to tell amazing new stories to people and it's working. And so that momentum continues. Of course, our goal, and we heard Beth talk about this, is about efficiency, right? We tried a lot of things. We had some investments last year that we don't need to repeat, whether that's, you know, reshooting our catalog. so as we test new channels as we test new things we want to be able to make sure that we're measuring it different tools there's a more rigorous focus on what that return is from that marketing activity so even though it's a lower percentage of sales it doesn't mean we're stepping back at all from that momentum that we've already built thank you very much great job on the new product best regards thanks Oliver your next question comes from the line of Ike Borchow with Wells Fargo your line is open please go ahead hey everyone um i think neil two questions for me uh on the

the dtc outlook you guys have can you what's embedded on store growth what's your underlying comp assumption um at least on an annual basis could you give us a little bit more variables into what underpins that yeah i think on both of those like there there's uh i think both positivity embedded in the in the outlook but we haven't given real precision on either comp growth we expected that the momentum that we've had now five quarters um sets the standard that we expect to have positive comp growth that's the goal for us um and then on new stores uh we've got a range of outcomes here i i think in the last 12 months uh we were something like high single digits and

we would expect to be sort of not that far removed from that but we're going to continue to evaluate opportunities as the year goes so um without getting too precise um you know that that will give you a little bit of flavor for those two inputs okay and then just you know trying to make sure the street number is kind of aligned to what you're thinking is as best we can understanding the revenue mix you kind of gave which makes sense seasonally can you help us out a little bit more with the earnings um i know you said some d leverage in the first half versus leverage in the backup but can you go beyond that i mean if you if you look at the margin guide for the year i think that's like 175 285 million of ebit could you maybe say how much of a loss you're

expecting in the first half versus a gain in the back just just something to help us get the models tight again i feel like you you guys have come out the last couple quarters and had a really good revenue and then you're off versus the street on the bottom line and just trying to make trying to help that scenario you know kind of come to an end yeah i certainly appreciate where you're where you're trying to go i i i think you know our objective here is to provide clarity over the year and we you know we feel like we've got a really good plan over the next 12 months and obviously now 11 months um the seasonality of the business has not changed that much we're still highly dependent on executing from sort of the september through february time frame which you know mostly

straddles the third and fourth quarter as you know um that's where the the all of the profit comes over that period of time and so we will you know we will run a loss for the first half of the year as we have historically and um and then um you know drive towards expansion or drive starts profitability in the second half and ultimately margin expansion so um we have giving too much color on the kind of quarterly splits, um, you know, our, our focus is really on how do we deliver the year. Okay. Thank you.

Your next question comes from the line of Michael Benetti with Evercore ISI. Your line is open. Please go ahead.

Hi, thanks for, um, thanks for taking our question here. I want, I want to just double click on that a little bit. I'm a little confused with low single-digit revenue growth in total with pricing in place, store growth, and expected same-store sales growth, and wholesale expected to be positive. It feels like there's a take that we're missing there to get to low single-digit growth. If you could just help me round out what I might be missing there. And then we just find just helping us think through SG&A. Last year, I can hear the focus on this call, but last year, I think we started guiding it to single-digit growth. It actualized at 19. Can you just help us break down, I know you mentioned two one-time items, the bad debt and the impairment. How did that evolve through the year, excluding those items and where, you know, the composition of the SG&A growth through the year and where the delta was, please? We didn't have the revenue guidance last year to go on, so it's very hard to tell how much of that SG&A was higher on variable costs tied to sales that might have been ahead of your plan versus, you know, since we didn't have a sales guide last year?

Sure. So I'll help with the math on the first part of the question, Michael, and then Beth can pick up some of the SG&A profiling over the last 12 months. So I think there's an element that was, that's not, that we've not yet talked about, which is we are not expecting to, we're expecting to have lower sales in the other channel than we did a year ago. And so that will certainly result in some reduction of revenue in that area, which will reduce the benefits that we were talking about in the other areas.

I think we're also, as we're saying here, we have a degree of uncertainty. And so while our plans are to drive against all of those positives, wholesale order book, growth, same store sales, pricing, et cetera, we know that for sure we're going to be facing into, or we are facing into a tougher environment, and we want to make sure that we respect what that might bring. And, you know, obviously, if that assumption isn't correct, then we'll update as we go.

And, Michael, on your question on the SG&A profile and margin profile in the full year, if you step back there's really three categories thriving core structural margin expansion second making intentional investments to really um cement that comp growth slide wheel and then third some one-timers so maybe i'll go kind of in reverse order the one-timers as you talked about were really two-fold. The wholesale bad debt expense that we took in Q3 and the impairment in Q4, those were $16 million and $8 million, respectively. So about 150 basis points of margin pressure from those two one-timers. Those are non-recurring. We will get the tailwind from those back in the back half of next year. Pretty straightforward. The intentional investments were really focused on three things. Marketing. store labor, and product creation. Those show up in different places, some of the channel P&Ls, some of the consolidated P&Ls. But we made, we planned to make at the beginning of the year while we didn't guide, we obviously communicated the intention to invest in those. That was critically important to really get the conversion engine in the store that we had seen excellent green shoots on in the back half of the prior year to get that really consistently executing day in, day out. we've got that going now so next year we can ship the store labor focus to be a bit more about productivity still that still keep that conversion engine going still use it to drive comp growth all that but but can do it a bit more efficiently similarly marketing we've obviously touched on already but same idea critical investments really help fuel brand heat really help tell the product story the brand story the same will continue next year just in a slightly more efficient way and then the product creation investments those have already started to kind of stabilize and get some leverage as the product flywheel that you heard Daniel described has taken root. And you see that show up in the pricing power we believe we have this year, for example, that we can fund some of those investments through the gross margin expansion. So those were intentional investments. They continue to remain important areas of spending for us, but we'll just be much more efficient next year. And we believe can be more efficient without a corresponding kind of decline in the top one. And then when you back all that out, which we appreciate we haven't given you exactly quantification to back all that out there is core fundamental structural margin expansion happening underneath there and that's what excites us about the margin potential for fiscal 27 and beyond is continuing the structural margin expansion get greater efficiency out of those intentional investments get rid of those one timers that added some noise and some pressure and all that can add together to a nice margin expansion profile for next year and and hopefully for many years beyond okay thanks a lot for all of detail.

Your next question comes from the line of Jay Sol with UBS. Your line is open. Please go ahead.

Great. Thank you so much. Just to follow up a little bit on those thoughts, the companies continue to focus on retail productivity. Can you just talk a little bit about what you plan on doing this year to drive further productivity? I mean, how you feel like the store teams perform this year relative to what you expected? A little detail that would be super helpful in any sort of financial application of that. Thank you.

Yeah. Thanks for the question, Jay. It's Carrie. So we're very proud, as we've talked about before, of what the teams in store have been able to do in terms of conversion. And again, it's a lot of things working, right? Great product, making sure it's in the right places at the right times. So, you know, there's a lot of focus from shoppers on buy now, where now. So us being able to pull up spring in Q4, having a dedicated lunar new year capsule and APAC that worked really well. So there was lots of reasons for people to be shopping and ability for our teams to convert. The focus on conversion is not going to change, right? So saw the results of that in Q4. We saw it all year driving that comp. What Beth just talked about is that labor agility, you know, getting that dial perfectly. It's, you know, perfect. It may be, you know, a lofty goal, but we're going to try as hard as we can to make sure that we're meeting the traffic when or meeting the labor when the traffic is there and just being more flexible i think one of the things that we have learned over the last year is the flexibility how do we build that into the system how do we look ahead a little bit more rigorously how do we you know uh plan scenarios a little bit more um a little more in advance so that we can uh switch that dial as we need to so the other part of that is um more training we invested a ton in our from our retail team we have the product training experience training again for us it's when you walk into a store we don't want people to just feel like it's a transactional business if it's an experiential brand we want people to feel that canadian warmth that distinctly canada goose offering and so of course we want to drive revenue but we also want it to be an amazing experience so that people come back again and again and that is what we're seeing right we talked about the investment in marketing driving not only new customers but repeat customers so all of those things working together, we have to continue doing that with just a greater focus on efficiency and productivity.

I think from a financial perspective, the connection is pretty tight. I mean, at the top line, you can see, you know, over the year, high single digits of comp store growth, or rather of DTC comp growth. And that's translated directly into the productivity per square foot. We've always said $4,000 a square foot is kind of where we need to be. We're over that that hurdle this year after a few years sort of turning a little bit below that and so that translation is obviously meaningful um you know we've spent time over the last 12 months talking about how we balance the labor um investment against the conversion outcomes carrie just touched on it an area where we're going to continue to monitor the dials but you know we know that that the connection between those two is tight and having that um that conversion lift which leads to the productivity and comp sales has been a really powerful unlock for us over here over the last several months.

Got it. Okay. Thank you so much.

Thanks, Michael.

Your next question comes from the line of Jonathan Comp with Baird. Your line is open. Please go ahead.

Hi, good morning. This is Alex Conway on for John. I just first wanted to follow up on something you said, Carrie, about not needing to repeat some of the marketing investments you made last year this year. I'm just curious like when you look at what worked and what didn't over the past year um what'd you kind of find and what what investments are you kind of carrying forward into this year and what are the ones that you don't really need to repeat?

Yeah great question um things it's more fundamental you know when we have a new um look and feel you're going to reshoot the way our we look online and so it's just making sure that what we're showing represents the brand and the evolution and the elevation of our brand so that you know we shot a lot of our our iconic catalog in a different way and so that's a you know something that doesn't need to be repeated what does need to be repeated and we talked about is our strategy hasn't changed so we are still investing in an upper funnel right we we have a brand investing in that brand making sure it reaches the right people at the right time in any number of channels and we tested a lot and just tested in different ways um that needs to repeat and we will continue to do that um the focus as i said before is just about making sure we're measuring it different ways making sure we're seeing that ROAS we already are starting to see that we just need to make sure that we're every dollar we spend has a really strong ROI whether that's in brand heat building desire taking market share and or converting ideally both um so not a massive change in strategy i don't want you to walk away thinking we're doing something differently it's just more rigorous focus on on the delivery of where we spend great thank you for the for the color there and then um i don't think you provided a store opening guidance but uh just any color there on amount timing like where you're looking across

regions the most thank you yeah uh thanks alex no we've not provided any precision around how many stores we plan to open when or where aside from you know we think that balancing comps against as we've said a lot the comp performance against the where the store investments are and how many of them we can accommodate is kind of a critical balance we're going to continue to use that as a guiding principle for store investments we will open stores this year and we expect that they will be positive contributors certainly to our top line but we'll just have to update you as we go on when and where.

As a reminder, if you would like to ask a question, press star one to raise your hand. Your next question comes from the line of Angus Keller with Barclays. Your line is open. Please go ahead.

Hi, this is Angus Keller on for Adrian Yee. Thanks for taking our question.

So on the earlier wholesale shipments, can you help quantify how much of the full year guide is impacted by timing related pull forward and then how much of the spring summer pull forward was better underlying demand particularly in non-down and apparel categories and then I have a follow-up sure yeah I think it's thanks for the question I guess it's a good point to to clarify so we would not consider any of this to be a pull forward this was very much by design we have product ready for spring now earlier and that shipped earlier the size of that order book is larger than it was a year ago a year ago reflecting as danny talked a lot about the newness the relative acceptance by our consumer our wholesale customers of a product the excitement that comes with that uh they're wanting them wanting to have canada goose in their stores uh in greater depth at more more times of the year and so we do not anticipate that the fiscal 27 guide is impacted whatsoever by that. We know how much of the order book was expected to be delivered in Q4 and how much was delivered and what we expect to see in our first quarter and through the bounce of spring, just to be really clear about that.

On the product category, so really, I mean, wholesale in general, sorry, I'll just give you a little more colour on the product category, and it's really, they're responding in the same way that consumers are responding to the expansion, Right. The relevance of a buy now, wear now consumer expanding while not diluting our core, but expanding into, you know, more seasonal opportunities for people to put us and put us in their closet or wear us in a different season is really working. So wholesale partners have seen that change as well. We're getting very strong feedback from them on apparel, whether it's lighter weight categories of outerwear, whether it's, you know, everyday, whether it's, you know, T-shirts and fleece. there really is strong demand. In addition, not just from a category perspective, but again, this whole evolution of brighter colors, more energy, more enthusiasm, they're seeing that elevation come through. And the demand for that product is great. So we're very happy with how that order book is shaping up. It's in line with where we're growing as a business.

Great. Thank you.

And then just on input costs, can you provide more color on what input costs are changing, including any freight surcharges you're seeing currently and what you have in embedded in the fiscal 27 cost structure regarding increases in freight and broader input costs and also just to say thank you for providing guidance you're welcome um on input costs obviously there's there is a lot of uncertainty right now on how ongoing geopolitical um conflicts will impact really two things uh freight charges and freight availability as well as raw materials and because we have petroleum exposure in some of our our fabrics for example so we We are continually monitoring that with our supply base and having incorporated an assumption of some pressure on that into the guide. But that said, we have a tremendous amount of execution opportunity across all of the cost elements that hit COGS. We are driving significant manufacturing, productivity improvement year over year, significant sourcing improvements. the investments we've been making in product creation include investments in kind of how we manufacture and how we source. And we believe there is productivity that can be driven in those that hopefully we can use to help offset any structural kind of macro pressure on some of those input costs. Some of those we have a lot of confidence in because we're already seeing them show up in our cash product creation costs, but they're just not yet hitting the P&L due to the nature of how we capitalize inventory, but there are lots of execution levers we can in our polling, but albeit in an uncertain macro environment with regards to input cost Best of luck.

Thanks, Agus.

There are no further questions at this time. I will now turn the call back to Anna Rahman, VP of Investor Relations, for closing remarks.

Well, thanks, everyone, for joining the call and for all your questions. We look forward to connecting with you in the coming weeks.

This concludes today's call. Thank you for attending. You may now discuss.