Canada Goose Holdings Inc. (GOOS) September 2026 Conference Transcript

Good morning and welcome to this next session of our 33rd annual Global Consumer and Retailing Conference. My name is Brooke Roach and I cover the apparel, accessories and brand sector here at GS. And I'm thrilled to welcome Neil Bowden, CFO of Canada Goose, as our next speaker. Welcome, Neil.

Thanks, Brooke. We've been here several years in a row. It's good to be back in New York in the fall and good to see you as well.

Excellent. Neil, would you like to kick it off with some opening remarks?

I'll make just a short opening remarks. We don't have any slides prepared today. We're obviously a well-known brand. We just had our quarter not too many weeks ago now, although we did have some vacation in between. So it does feel like quite a ways. We're off to a good start this year. And the brand obviously has been focused over the last few years on a few core areas, which I'm sure we'll touch on. The first is really reinvigorating the brand and building out a year-round product playbook, which is the core of those two things has been the introduction of a creative director, Heider Ackerman, who has served as our creative director now for about two years. and emphasis on having amazing luxury product available 365 days a year in all of our stores, websites, and increasingly among our wholesale consumers. And so that's where we've been spending our time as a business over these last few years, really on product and on brand, and then on how do we deliver that through our channels and how do we deliver the profitability that this brand has and the potential that it certainly has.

As we think about those three core priorities that you have this year to strengthen brand relevance and drive sustainable growth and profitability, where has Canada Goose made the most meaningful progress so far? And what do you see as the biggest opportunity?

Yeah, so I would say that, and I'll go back now a few years, we've spent time in considering both the brand and the product as obviously closely related. And so as we've gotten into the Snow Goose collection with Hyder and as we've started to elevate product beyond where it was, we focused our attention in terms of marketing dollars on upper funnel. How do we expand our reach across consumers? How do we deliver the brand? How do we increase the buzz around the brand? Obviously, the historic sort of iconic logo, the parkas are what we're closely associated with. And yet today the products are approximately 50% of the unit sales are not down product. They're things like what I'm wearing today, knitwear, their tees, t-shirts, their polos. And so the quality of the products in some of those other areas has really, really increased as we've started to expand the line. And consumers are adopting them at a really exciting rate.

That's great to hear. There's a lot to pull on there, but maybe we can talk a little bit about marketing for a moment. As you continue to look and build the brand, you're increasing marketing this quarter and next in particular. What should we expect from the upcoming campaigns? Where are you driving incremental spend by region? And are you seeing any indicators that tell you that this is driving improvement in customer traffic and acquisition?

They don't let, unfortunately, the finance guys break any of the hot news around exactly what the campaigns look like. So I'll just I'll let the marketing work do the work for itself. But I will talk a little bit about where we're going to spend some time.

So we're just in our fall winter collection is in is in our channels now. And so we've just started to a little now a couple weeks ago, we started to get into some of the some of the marketing around that. We're going to quickly move into Snow Goose. We've got holiday coming after that. And we've got some exciting partnerships, which will be very interesting, I think, really on brand for us. And so the team's working hard at that. Much of that work is really focused on that top of the funnel. How do we increase the awareness in every market? Clearly, we've had a lot of success here over the last several years in both China and in North America. And so we're going to put some time and energy into those markets, particular brand activations in each market that are local and relevant to the consumer. our global brand ambassador, Greg Su, who's a Taiwanese actor, very, very relevant in Asia and increasingly relevant here in North America. We just started, we just had a little bit of a teaser for the fall winter campaign for him over the last few weeks. And so that's an area where we expect to, and he's been in the brand now for about 12 months. And so we expect to continue to drive some relevance that way.

Talk to me a little bit more about the product assortment and how it's evolving and where it's going next. You've now had Heider Ackerman in the brand for a couple of years now. Alongside his creative contribution, you've done a lot with lighter weight products, similar to what you said earlier. What do you see as the largest product and category opportunities from here?

I mean, certainly we feel confident about all categories. So I'll just make that kind of blanket statement to start. The brand obviously is really well known for our down product, whether that's sort of the parkas, and there are many iconic styles, but also some newness that we've seen come into the brand here under Heider's direction. And alongside that, obviously, lightweight down, very popular and a large piece of our portfolio. Increasingly, the growth has come from knitwear, fleece, and accessories have started to round that out. As we've been thinking about what the merchandising and what the assortment looks like, But we've really been focused on having luxury product available all around the world for your need state. And so the consumers, regardless of where you are in the world, we want you to be thinking about Canada Goose, whether you're on your way to a soccer game or having brunch with your friends or outside at a park in the spring. or yesterday I was walking around Manhattan in the heavy rain with my wife in our really amazing raincoats. And so there is an opportunity for Canada to get a product 365 days of the year.

That's really great to hear. Are these category extensions driving increased purchasing frequency and spend among existing customers, or do you think that it's primarily bringing new customers into the brand?

So in your last question, you sort of asked about Hyder. And so Hyder's been with us for about two years. He started with our pinnacle product collection called Snow Goose. And his influence is now extended into our mainline collections. And so the spring collection that we sort of have just finished was the first mainline collection that Hyder touched. And now the fall winter is in place. we're seeing consumers that are new to the brand as well as repeat consumers gravitating towards those products and and really that's such a great story and a powerful part of our opportunity we think where we've now got products that perhaps you weren't looking at Canada Goose for one reason or another that Hyder has really influenced you've got a new color that you maybe weren't looking at or you you you have something that's just the right style that you know perhaps a few years ago wasn't uh wasn't exactly what you were looking for you've now got a reason to come in and hyder has really brought that um if you are a existing consumer and you've got your parka and you you know for a period of time you decided you know i'm not sure i need to go back to canada goose we now see a lot more excitement around things like polos um and so you're there in the summer to to acquire uh you know one or two colors of a polo or a t-shirt or something else that is at the standard that you expect from the brand and so we're really we're seeing both that growth and repeat as well as new.

That's great to hear. As you scale some of these warmer weather categories or non-heavyweight down categories what's the current margin profile of those lighter weight versus heavyweight categories and what levers do you have to offset mixed pressure?

So you know this is a question we have seen we've heard you know a number of times given that not surprisingly parkas are the highest um have the highest gross margin on a per unit basis um i think early on as we were getting into some of these other categories there was a much wider and not a not a major but there was a wider difference between lower margin products and and higher margin products as we've started to evolve our sourcing function as we've matured our merchandising function we've really been focused on ensuring that the gap between highest margin and lowest margin products tightens. There's good reason sometimes, you know, to accept maybe a slightly lower margin, let's just say lightweight down product, for instance, if it's the right spot in the assortment. And we've made those, I'd say those decisions over the last few years in a much more scientific way. But generally speaking, the margins at a category level have really, really tightened. And you can see that it's been one of the reasons that we've been able to expand gross margin over the last 10 years very meaningfully as we've started to mix out of core parkas and and you know obviously we're getting some benefit on a channel basis but because of the channel mix but inside the channels you can see that gross margin expanding over a long period of time and we believe that there's still opportunity to do that as the volumes get larger even as we move into some of those other categories and naturally you're going to see some AUR compression but we should be able to to continue the pace that we're at.

That's really great to hear. Let's dive into another area of strategic opportunity, which is the DTC store productivity.

Sure.

Retail execution has been such a major area of investment for Canada Goose the last few years. What's driving some of the improvements that you're seeing in store today and how should investors assess current store productivity? If you have any metrics you can share on per square foot, four-wheel profitability or returns on the stores, that would be great.

Yeah. I mean, I'll start with the two that we obviously look at most frequently. So one is sales per square foot. We have said lots of times over our time, and those who are familiar with the story will have heard this, and if you're not, here it is for the first time. Our expectation is that our stores deliver $4,000 Canadian a square foot, at least. And that has not always been the case. We report this on an annual basis. And so when we closed fiscal 26 in March, that was the first year in a few years that we had ticked above that number across the fleet. We had strong comps through fiscal 26, the back half for the last quarter for sure of fiscal 25. And so getting back to that level was important. We believe there's plenty of opportunity beyond that as we start to build out more concentration in some of these periods of time that isn't necessarily what we treat as our peak period. And so there is opportunity to continue to drive that. But that is not every store. And that means that there's opportunity in those stores specifically. Secondary focus is really around per store profitability. And so having our EBIT margin at 40 percent is sort of our minimum gating threshold at the moment. That is, of course, not always the case across a fleet of 90 stores. And where we're not where we expect to be, we focus on things like, which just gets to the core of the question here, how do we drive the right level of labor necessary to meet the traffic? What are we doing to incent our brand ambassadors to ensure that they're delivering whatever it is that's necessary in that period of time, whether that's a heavy weight down scheme or whether it's something about T-shirts or whatever the program is for that particular week or month. And really absolutely drilling into core behavior, consistency across the store network. We've got a head of retail now and three presidents absolutely focused on consistency and meeting the standards everywhere in the world. It's not a perfectly straight line. We didn't have, I would say, quite the performance in the first quarter that we would like. And so that obviously gears us up to continue to focus on that. But we think that store comps, and we report comps, but store comps in particular are absolutely tied to long-term value creation. And lots of us are spending a ton of time focused on getting better at that every day.

Let's talk a little bit more about what opportunities you have within this initiative for the holiday season. What should we be expecting as you gear up into your peak selling season?

We're certainly focused on a few things. So selling behavior when you're in the store. Are you feeling that Canadian warmth? Is that consistent? Are we showing you multiple products? are we trying to push a upt above one so units per transaction above one if you're going to buy a polo can we get you to buy two or three instead of one to drive that that average basket size up so that's sort of the the the kind of the core focus do we have the right labor in place do we have the right labor to match the traffic over the last 12 or 15 months we've talked a lot about labor investment and and ensuring that we've got good kind of analytics around what the traffic forecast looks like and then how do we match manager and brand ambassador availability and the number of the number of staff on hand in order to meet the the demand and obviously peak for us is a big period and and there's lineups at the stores and lots of places including on fifth avenue i'm sure soon um and then do we have the inventory in the right place and so we talked a little bit already about making this phenomenal product is it there? Is it available to you? If it's not, what can we do to have that shipped to you quickly so that you've got that in your hand? And so all of those kind of three areas are places where we know we've got opportunity and I think we feel like we've got a good plan entering our peak.

Let's shift to your other major channel, which is wholesale. How are you thinking about wholesale growth on a multi-year basis? And then on a near-term basis, how is sell-in and sell-through developed?

And what are you hearing from your partners regarding the health of the brand, forward orders reorders and cancellations yeah i mean i'll start at the i'll start at the back uh at the last part of that question um we have just come through over the last few months our spring summer season spring summer um sell in for next year uh we're delivering now uh this fall winter most of it's now delivered although there's still usually a few weeks to go really really happy with the uh interest in the product in particular um i think by and large there's been a desire from wholesalers as as well as consumers and obviously the wholesalers are speaking on behalf of the consumers for candidate use product that that extends beyond just the core season and we're seeing a lot of interest in the in the buyers for that product so i think that's a great indicator of of uh of brand health and and you know frankly long overdue we've talked the lot, Brooke, you and I, about where the wholesale business has come. It was the core of the business many years ago. We had a couple challenging years there through fiscal 24 and 25, stabilized over last year with a little bit of growth. And we feel like there's growth to come in wholesale this year as well. And so we really like where that's headed. I think it's probably too early really to talk a little bit about sell in or sell out. I think anecdotally, it looks okay, but it's not perfect everywhere um europe is a market that continues to be under some pressure although i was in london and paris for the last few weeks on vacation but in some of those major uh retailers and i liked what i saw in terms of the interest in in you know broadly speaking this is a you know one day one hour but it was of of interest to me that there was you know people in places like gallery lafayette or la samaritaine or herod so it does it does seem to be that there are people willing to shop but i don't want to draw any conclusions on that uh we're we're too early in our season so far to really draw any strong conclusions about sellout but you know i think we like where we're positioned we like the product we know the wholesalers like the product

so our job is just to make sure it's in their hands on time you mentioned the macro so maybe we can dive a little bit deeper there one of the one of the bigger debates coming out of last quarter on canada goose was the traffic that you were seeing by region you reported double digit e-com growth healthy customer acquisition and better conversion but that weaker traffic really was a bit of an offset. What's your latest assessment of the macro operating environment by region? And are you seeing any signs of improvement or stabilization?

Yeah. So we're, as you can appreciate, you're getting a little bit deep into our quarter. So I'm going to just comment more generally rather than any specifics. I will say we, as we exited Q1, we're not really happy with where the traffic is. I think it's probably true that we're experiencing, you know, in retail in particular. We saw lots of improvement in e-commerce, and so understanding that relationship has been interesting. Clearly, there's interest that folks are attracted to the website and are spending some time across our digital platforms, regardless of where we're in the world, and so we take that as a positive. Our wholesale traffic seemed to be pretty good as well through the first quarter, and so there was a little bit of head-scratching around retail. you know i i think as we've looked at as we look at the macro now it continues to be tough in europe no surprise despite what i said about um you know what i saw on the streets of paris and london um uh you know north america is okay um there are pockets where there's there's good strong kind of repeatable traffic obviously we had some some experience here through kind of the back-to-school season, but it's not perfect everywhere. And China remains a market that's a little bit mixed. Regardless of what the traffic environment is, our job is to convert. And so we're focused on, obviously, top-of-the-funnel brand work. How does that translate to traffic over a period of time, as you indicated? We were a little bit lighter on marketing in the first quarter. We're expecting to ramp that up in the second quarter and have done so, and we'll continue to do that over the balance of the year. We know that's going to translate to some traffic improvement, but our core focus is on what are we doing when you arrive in our stores? What does our website look like? How well merchandised are we? Is the product available for you? The things that we know will translate to success.

One question that we're asking every company at our conference today is on the health of the consumer. What are your expectations for the environment over the balance of 26 relative to your recent results? Do you expect things to be the same, better or worse. And then for 2027, do you expect the health of the consumer to be better, the same or worse in 27 versus 26?

Yeah. I mean, on that last point, I mean, if I sat here, I don't know what we could look at the transcript, what I said 12 months ago, but I think we felt pretty good 12 months ago about the health of the consumer. And we've had obviously an escalation in tariffs, which I'm sure we're going to get to and a war in Iran that wasn't on the horizon. So I'm not sure I'm in a situation where calendar 2027, fiscal 28 for us, it's way too early to comment. I'm hopeful that some of those things will have de-escalated, but you just never know. I think for the balance of the year and what we said when we got into our plan for the year and what we based our guidance on was a consumer environment that was probably a little bit worse than um than calendar 25 our fiscal 26 i i i nothing has has nothing through the first quarter nothing changed my view of that um i i you know i i think there's clearly some buying there are markets uh where um stock markets are performing very well and and affluence seems to be uh leading to sort of spending in an unmitigated way and so we're we're you know We're happy with what we see in some places, but it's mixed. And I'm expecting some of that challenge to continue.

That's helpful. One other very topical question that's related to traffic is that of weather. And there are some forecasters out there calling for a super El Nino pattern, which could change cold weather temps into the back half of the year. How are you planning the business for this possibility? And how does your business typically perform during these periods?

If tariffs isn't the most popular word in the last couple months, then super el nino is is got to be on that list it's been it's been i've learned a lot about uh those weather patterns um listen like appears to me to be transitory uh you know if it is in fact something that will happen this year then it happens uh you know our view is today we are in many many markets that are sort of non-traditional uh cold weather markets we've got product that is available for all year round. Consumers, you know, as we've seen sort of in our non-peak season, consumers love that product. We've seen tons of growth in apparel. You know, our job is when you come into the store to make sure that you've got the right product for you. And we know we have that inventory. The quality of it is exceptional. And so, listen, it has not factored into our business plan this year. And, you know, our job is really to continue to attract interest based on the products that we have, and we're excited about that.

Very clear. You've mentioned tariffs multiple times now, and I know that it is very much on investors' minds, so maybe we can move there. You had indicated on the last call that higher U.S. tariffs on Canadian imports could represent less than 200 basis points of pressure on this fiscal year before mitigation. What would the impact look like on an annualized basis, and how much of the current year effect is limited by inventory already in the United States? Can you walk us through how you're thinking about current tariffs?

Sure. Yeah. I didn't mean to indicate tariffs, but that's just a reality. And I didn't think we'd get away without having a chat about it. So that's no surprise. Listen, yeah, our view of this year is less than 200 basis points of impact. I'm not prepared to give an annualized number. I think that depends on size of the business in the U.S., how much product do we have in the market, a number of other factors. And so as we get into, and obviously we're planning ahead for next year at this point, when the time's right, we'll talk about what the annualization would look like and specifically, you know, to the extent that it matters to fiscal 27, what that looks like. So fiscal 28, rather. So I'm going to punt on that. Mitigation strategies, you know, we make inventory all year round. We've got an active network in, an active retail network and e-commerce network in the U.S. We've got wholesalers in the U.S. We have inventory staged earlier or throughout the year, and so some of the mitigation had already happened, regardless of sort of the impact of tariffs. Yeah, and so our main mitigation prior to was to ensure that we had whatever we could in the market at the time. And, you know, we've continued to ship, obviously, because we've got stores to replenish and that sort of thing. And so that's all factored into our calculation of what the impact is in the current year.

What about future mitigation levers? Can you talk through how we might think about the future mitigation once the product that's in the U.S. is already exhausted?

Yeah, I mean, I think, you know, the obvious one, which, you know, we're not going there yet, is, you know, what does pricing look like? And, you know, it's way too early to make any comment or any decision on that. We've got a tremendous relationship with U.S. consumers. And I think our objective is to continue to maintain that and the loyalty that they've shown us with that to the brand. And so we're not at this time considering any significant change in pricing and certainly not in the year. um our uh you know i think our long-term view of where manufacturing is continues to be it should be in in uh canada for uh for down product and and we will you know as we as we talked about we make lots of things in europe and and tariffs is a part of product made in europe being imported in the u.s and has been for a long time so that's just part of our business as it is elsewhere um driving retail economics and and you know some cost savings to offset what might be some gross margin compression is another way that we can help mitigate and so you know we're not

because this is you know obviously so kind of topical we're we're not interested in any sort of rash reaction and we're monitoring the situation as as as we often are and you know we're hopeful there's a good resolution one question that we're asking all companies at this conference is on prices in aur do you expect your prices in aur to be higher lower or the same in the back half of calendar 26 versus the level of aur growth that you delivered delivered in the first half and then maybe associated with that do you believe that the brand is in a strong position to be able to continue to increase prices now that you've gotten back to your normal cadence this year yeah i i mean i i certainly think we do um have uh have some pricing power uh you know i

think that goes very closely with uh what are we doing around the the the brand and what does that brand mean to consumers how amazing are these products um you know maybe there's a little more opportunity on newness than core but you know that that remains to be seen um and obviously we take data on how we perform throughout the year and and what the um you know things like indicators from wholesale order books and that sort of thing um to inform future pricing decisions and and you know what's the health of the market more generally and that sort of thing so i think those factors are all uh considered when we make pricing decisions uh first part of your question uh aur and pricing higher lower are the same in the back half of the year yeah i mean i not surprisingly for us we expect higher uh aur growth the back half of the year because we start to shift away from some of those lower aur products and into more core seasonal um we took price growth this year as opposed to last year so that's a natural evolution but we certainly are seeing some some um pressure let's just say on aur in terms of the math by having lower aur product more available at this time of year. And so there'll be a little bit of that pressure, I suspect, as people are starting to buy things like, you know, knitwear and fleece and apparel, lower AUR product at a, even during our core season. And so that certainly puts some pressure on it, but that's pressure that we're okay with.

The other big debate in the stock is on SG&A leverage. And I was hoping you could dive a little bit deeper into the principal drivers of expected SG&A leverage in the back half. How much of that leverage depends on an improvement in traffic, and how much is in your control, and how should we be thinking about that ahead?

Yeah, so I think the good news is that we expect to get SG&A leverage out of a couple spots. So one of them for sure is to maintain a level of spending that's appropriate, and that spending has to be lower than the growth in that spending has to be lower than the growth in overall revenue. We plan for revenue growth below single digits this year. We're expecting SG&A to be less than in order for us to have some leverage, even in what is a somewhat pressured top-line growth scenario. The primary way that we maintain or contain growth in SG&A spend there is headcount related, and so we've been very tight on headcount addition really over the last few years, and that's translated nicely to some SG&A leverage. The other area is we need to see, obviously, revenue growth in the channels. And, you know, naturally that comes best from comp growth. But revenue growth just more generally in the channels, which we absolutely expect to deliver, will also translate to some SG&A leverage. And so we're looking at both those things. Clearly, we're going to invest in stores. we've got a marketing plan that will be increase in dollars a little bit of a lowering a lowering of spend as a percentage of revenue so there's a tiny bit of leverage there but mainly it's maintaining a level of cost or growing a level of cost at a rate that's slower than overall revenue growth and from a cost perspective one other margin question that we're asking every company at the conference this year is on margin headwinds and tailwinds into calendar 2027 Do you expect to see more margin headwinds or tailwinds in calendar 27 versus 2026?

And can you elaborate on the drivers?

Yeah, I mean, again, we're not quite into, you know, calendar 27 for us is a big chunk of our fiscal 28. So we're not in a position to comment about our plans for fiscal 28 quite yet. But I would say that we believe absolutely that there are margin tailwinds in this business. And when we get to our big season here in Q3 for fiscal 2027, when we get into that fiscal 28 planning, we'll talk a little bit more about it. But I think you've heard us say a number of times, and we believe strongly that there is a lot of opportunity in this business to grow margin.

Let's dive a little bit deeper into that long-term opportunity to grow margin. beyond fiscal 27, what are the key milestones required to move EBIT margin meaningfully higher to where you used to be? And how should investors think about the relative contribution opportunity from gross margin expansion relative to SG&A leverage?

So I think gross margin is probably a gross margin is a absolutely fundamental part of the plan, but the growth in gross margin is probably less than the SG&A leverage story, just if I think about the way the math works. We're running gross margins around 70%. I think there's opportunity beyond that. But growing the absolute dollars of gross profit and obviously growing revenue dollars helps provide leverage without doing anything in SG&A. And so clearly revenue growth, translating to gross profit dollar growth, regardless of sort of how much gross margin you get helps leverage that total SG&A pool. But keeping a handle on SG&A corporate cost spend is critical. We will absolutely invest in marketing because we know that that is a direct translation to performance in the channels as well as the overall brand metrics that we know that we need to drive. But having SG&A corporate costs under control is key to providing overall leverage. And then inside the channels, ensuring that we've got the right kind of mix of investment in new stores, that the stores are delivering productivity at and above the levels that we talked about earlier, 40% at a per store basis. Those are all part of the story. And we're focused on each of those individually.

Is AI a contributor to the long-term growth? Do you expect AI to drive a significant increase in efficiency in 27 versus 26? And what part of the business do you expect AI to change most meaningfully?

Yeah, I'd hesitate to overstate the benefit of it at the moment. I mean, we are certainly spending, we're certainly utilizing it in a number of different areas. But I'm not, I don't think we're quite at the stage yet where we're seeing a massive amount of cost efficiency, let's say. It's also not a major level of, it's an area of, I'd say, human capital investment. And so where we're experimenting with the tools that we have available to us it's we're spending some human time on that um and there are certain pockets of the business where where i see future opportunity uh this customer facing stuff is one of the most interesting areas things like warranty uh live agent that sort of thing um where you can you know clearly there's a translation to uh you know this is not a we're not breaking new ground here and so that's an area where you know naturally we can see some some leverage and you know potentially some operating leverage but i i wouldn't want to overstate the opportunity around AI. I think there's still a lot to do, but we've got plenty to do in kind of the core operating areas first.

Neil, we're about out of time. Any closing thoughts or comments that you'd like to leave with the audience?

No, I think as we enter our peak, we're pretty excited about what plans are in front of us. We've got a lot of work to do. We'll be in the market with our second quarter here in the early part of November. And so we'll be excited to update the broader investor and analysts and other stakeholder group at that time and you know we've got plenty in front of us for fiscal 27 so we're gonna head back to work.

Great thanks so much for joining us Neil.

Great thank you Brooke.