Jacket? And raise your hand, who's wearing Canada Goose today? So keeping the planet cold and people warm, it's Canada Goose. Canada Goose is an iconic luxury performance brand that we're really excited to be hosting today. Of special note, it's Neil Bowden's first time at a Wall Street conference on stage, and Beth Clymer as well, so it's a real treat to have you both. Thank you. Thanks, Oliver. Thanks, Oliver. So we're excited to host Neil Bowden, CFO of Canada Goose, and Beth Clymer, President, Finance, Strategy, and Operations of Canada Goose, ticker GOOS. A quick introduction on Neil and Beth. Neil Bowden was appointed CFO at the beginning of April and has been with the firm for over seven years, including playing an integral role in the IPO and leading a transformation of the finance department. Beth Clymer is the President of Finance, Strategy, as well as Operations. She was appointed this in January. She's been a key partner to Canada Goose during her time at Bain Capital, including before, during, and after the IPO. She brings a lot of operational experience from her time at Jobcase, where she spent four years as CFO. Neil and Beth will share some introductory remarks and a short presentation, then we'll jump into Q&A. Thank you both, and Neil, I'll turn it to you. Thank you, Oliver. Good to be with you and, and with everyone else today. We'll just touch on a few sort of key highlights of Canada Goose, and, then we'll get into the, the Q&A, which we're looking forward to. Am I, am I flipping the slides here? Sure am. Okay, so, Canada Goose, obviously a really well-known, iconic performance luxury outerwear brand. For those of, of us who are not as well acquainted, we'll just talk about a few of the key stats, around the business. We were founded a long time ago, really. You know, for some of us, it's been more recent that we've come to know Canada Goose, but in fact, it's been a heritage manufacturer for a very long time, making outerwear in Canada, and more recently, outerwear in Canada and product around the world as well. We've been a public company since 2017, as Oliver alluded to, and since then, have had a very impressive rate of growth, at 19% CAGR over those seven years, ending this year most recently at CAD 1.3 billion. Some of the key operating metrics, the gross margin for us has expanded over the last several years as we've moved from what was entirely a wholesale business into a D2C model. Today, we've got 68 stores in place, and we're gonna continue to grow that. As we know, there's a tremendous amount of white space. The D2C mix today is about 70%, versus 23% in wholesale. Product expansion has been something that's been very interesting, and so we're known for being an iconic maker of parkas. We have moved way past that and now make, Our revenue is only 46% in sort of heavyweight down, our traditional parkas, and more than half comes from lightweight down products, vests, apparel, fleece, and we are well-loved around the world for all of that product. The business from a revenue perspective splits roughly 43% North America, nearly 40% in Asia, and 19% in Europe, so well-distributed around the world. And the number of stores is really kind of fits along that that profile. Sorry, let us go back there. There we go. However, from a growth perspective, we're very satisfied with the pace of growth on the top line, but we know that we can do more in terms of delivering operating margin. In the year that we just closed, we're at 13%. We know that our ability to expand that margin will come, and we are super excited about the operating imperatives that we got in place for this year upcoming. So those are implementing best-in-class retail, and so while we've got 68 stores and that pace of growth has been impressive, we can do better as a retailer. We're at nearly CAD 4,000 a sq ft in terms of store productivity, so impressive numbers, but there's opportunity to grow that even more through product and through operating effectiveness in those stores. The second area of focus for us over the next 12 months is around setting the stage for product and brand evolution, and so we just recently announced our first creative director, Haider Ackermann, who's in the brand now, and we had one release, a bit of a teaser, one sweatshirt just over the last few weeks, in support of Polar Bears International, which is our charity that we've been affiliated for a long time, and as you see in the picture here, we've got Haider and Jane Fonda, who is a well-known climate activist, as well as an actress and many other things. And then the last area of opportunity, which we know goes right to that operating margin delivery, is around being a simpler business, and so how do we do things faster? How do we do things with fewer hands and with more automation? And so we're very focused on ensuring that we've got the costs in the right place in order to deliver that operating margin. So with that... Thanks a lot. Excited to be here with you both. Beth, also congrats on your new role. What attracted you to come back to Canada Goose, and what are some of your biggest priorities? ... Oh, so Canada Goose is an iconic brand. Neil talked about our over 60-year history, our deep, authentic craftsmanship rooted in all of our down products, as well as our fleece being made in Canada. We are a vertically integrated manufacturer. There's just tons of really special facts about our brand and our business that you can't fake. They take decades to build. That was really exciting to me. I had been involved, as Oliver said, in the business in my time at Bain Capital, and saw all of the amazing progress the company had made in D2C entry, in product line expansion, just really, really exciting work. But as Neil said, we have a lot of work to do. We have an opportunity to expand our margins while driving sustained, high quality, durable growth. And there's a lot of initiatives underway that are gonna allow us to do both of those at the same time. And so in terms of my priorities, it's to do both of those things. It's to drive that sustained growth and do so at expanding operating margin, and it's really those three operating imperatives that you just heard Neil talk about. We have built retail from zero, physical stores, from zero to CAD 700 million in 7 years. We opened our first retail store in fall of 2016. That's amazing! 68 stores in 13 markets with a global pandemic thrown in between. We're a big deal. But we're not a good enough retailer yet, and so we have a lot of opportunity to be better at that. Same thing with design and brand, evolution, which I know is a topic you're incredibly passionate about, and we just need to be simpler as an organization. And if we do that, we will execute better, and we will have a leaner cost base as a percent of revenue. And so those three operating imperatives are my three biggest priorities, Neil's three, Dani's three- Mm-hmm. Carrie's three, right, and our whole leadership team. That builds on this question for Neil. So the recipe for expanding margins will be increased store productivity. And what are key levers for driving better sales per square foot? So I think there's probably. We'll put a time box around what we need to do this year and then some longer term initiatives. So first of all, we need to really focus on how do our people deliver that Canadian warmth experience when you come into the store? And so, that's about feeling the luxury experience that is not so much cold. It's very much about the type of product that we have and the way that Canadians, I can proudly say, are to each other. The second thing is ensuring that we've got product in the stores, so some real basic blocking and tackling around Retail 101. What's the assortment look like? How do we replenish? How do we visually merchandise the stores? And then training our folks around selling and cross-selling and upselling so that we can drive a little bit more UPT through the stores. So that's the sort of the this year focus. If we look just a little bit beyond that, I'm really encouraged by what I see in terms of product expansion, and so we talked a little bit about where our, how our products have moved from being, you know, mainly just two categories, lightweight down and heavyweight down, to being more than half in the lightweight down, plus apparel and fleece, et cetera. As that starts to come in in at a greater rate, you're starting to have people come through the stores at this time of year and buying things like polos, which are available now, this type of sweater, what Beth's wearing. A much lighter product that has more seasonality, and that, that's where you can really drive store productivity. What is the recipe for continuing to innovate in non-heavyweight down? What are some key priorities? You're both wearing some product around, what you can do. First is just consumer intimacy, right? Yeah. Understanding who our consumers are, what they want, what are the use cases in their daily life, outdoors and indoors, where Canada Goose has a right to play, and then developing high-quality products that meet those needs. So, you know, the vision behind sweaters is, on a cold winter day, when you're outside, you know, you wear a parka on the outside, but what do you wear on the inside? You want a really nice, high-quality, you know, beautiful feel, luxurious sweater underneath it. So natural product extension that is adjacent to our winter ownership, but also, people wear sweaters all year round, in the evenings, in the spring and summer, et cetera. So just really understanding the use cases for consumers and then taking a look at, does Canada Goose have a really unique right to win in that product? Can we either manufacture it ourselves or work with our high-quality, third-party partners to manufacture a high-quality product that meets the needs of our luxury consumer? How should we think about the margin structure of non-heavyweight down relative to heavyweight down? Also, it can be more complex to manage inventory when you do have more SKUs, yet simplification is better. Yeah, I think on the second point, sort of growing SKUs at a real fast pace is not the plan and never has been. Yeah. We have been very disciplined about entering new categories in a small way. Footwear is a great example, where we started with, two SKUs in women's and two SKUs in men's. Yeah. We're now sort of in about year 4 in footwear, and we're only up to about 7 or 8 styles of men's and women's. So there just aren't that many. We're going slow because we wanna make sure that the consumer adoption is there. And we'll manage the lifecycle of products as necessary. We also have a very strong core set of products beyond just parkas, so this core lightweight down, et cetera, that have many, many years of history. We can iterate off of that with colors and fabrics that ensure that you've got that same iconic style but have the colors and fabrics. As it relates to margins, you can obviously see that we're, you know, approaching 70% margin. Some of that's the real benefit of having the channel mix, but we've been able to manage that in channel, so growing margins, while declining the amount of heavyweight down as a proportion. And so we're very smart about how we structure costs and where we put the pricing, of these adjacent categories so that we can preserve the margin. The consumer's been in a choiceful, considered state, and a mixed state, depending on bifurcation as well. In the context of your guidance, which assumes low single-digit revenue growth and EBIT margin expansion of 100 basis points, what are some puts and takes on the revenue and margin outlook? And also, what are your assumptions for consumer health during the next year? Yeah, I mean, I think the overall macro environment seems to be pretty strong consensus among banks and other observers, that sort of mid-single digits in luxury is about where the sector is headed for the next 12 months. As you say, it's mixed among consumers. It's probably mixed in the geographic sense as well, but we're sort of following that line of thinking. We think our D2C business is gonna grow a little bit ahead of that, and obviously, the wholesale is a headwind for us, and we've got that factored into the guidance. When I think about opportunity, if we're able to drive same-store sales up a little bit higher than what we thought in comp sales, then we probably have some upside to that. But we've been pretty cautious, given that the environment seems to be under a bit of pressure. As it relates to margin expansion, it's all about, for us, scaling that revenue number, as well as maintaining the cost base, and we've had lots of discussion over the last 12-18 months about what our cost program looks like, and our ability to keep the lid on that cost is gonna be critical to expand margin. Neil, within geographies, how would you speak to China relative to the U.S.? Pretty different in terms of the macro dynamics and traffic as well. Yeah, I would say that China, as a very general statement, seems like is under some consumer pressure, and that consumer pressure seems to be caused by a number of things. With a distribution of about 25 stores there, we don't feel that consumer pressure, I don't think, nearly as much as we might if we were much more distributed in terms of a D2C footprint. And so we feel like there's a lot of white space, even with some pressure on the consumer. And what we see is that the Chinese cohort is traveling to Macau, it's traveling to Taiwan, it's traveling to Hong Kong, they're traveling to Japan, and so there still is a tourist luxury shopper that's showing up in our doors. How might that evolve with the Chinese shopper coming back to Europe, to Canada, to the U.S.? Our base case is it could be about nine months to a year. That's in line with where we're at as well. We don't see the air travel recovering quite at the pace that it has been pre-pandemic. If there is true consumer pressure, there's less money to spend, obviously, on travel and on luxury spending. And so our case is that we don't see a lot of upside around the world on traveling consumer Chinese consumers, and we're okay with that. Thank you. Beth, on the transformation program, you've begun implementing this. Can you speak to where you expect to see cost savings? What have been the biggest learnings so far for each either of you? So we started a transformation program in early calendar 2023. So we're now about a year and a half into it, and the focus on it is really clear. It's about expanding profit margins while we grow. And while we made really good progress in a number of areas last year, our EBIT didn't grow last year. It was flat on a base of growing sales. So at the end of the day, that's the goal of the transformation margin, and we didn't meet our own expectations on that transformation program, and that's the focus this year. So you'll know we're successful in the transformation program when you see, you know, comp store sales growing, D2C growth overall, and D2C margins expanding, SG&A as a% of revenue declining. That's what success looks like. How we get there is a combination of cost takeout, so human capital cost takeout. We've done two organizational restructurings, first phase in August of last year, second phase at the end of March, that have been very effective, streamlining the organization. Yes, taking cost out, but really accomplishing that goal of simplification, reducing spans of control, taking work out of the business, automating tasks that were previously taking a lot of manual labor, all of that type of stuff. Non-human capital cost takeout, which is a, you know, significant area of continued focus and opportunity, and third-party procurement, as well as raw materials procurement, things like that. And then lastly, productivity initiatives, things like how we deploy labor in stores to really drive productivity, which means more sales for every unit of labor, so may or may not drive costs down, but will drive costs as a% of revenue up. So those are really the focuses of our transformation program, and you'll see them show up in those core KPIs of the business. There is a big margin expansion opportunity. Given it's 13, and it can go 20%+, what would you say are the big buckets for expansion towards that opportunity? Yeah, I think of it in two ways. I think that we need revenue scale, right? And so that scale comes from two ways: one, adding new stores over time in an appropriate way, and two, driving comp sales in the existing stores. And you know, from our perspective, we love where our stores are. They are in great locations, whether those are malls or high streets, and our job is to deliver on the throughput in those areas. The second is ensuring that the cost base is in the right place as we scale that up. And so historically, we've clearly added cost at a rate that sometimes outstripped revenue, with the view that revenue was going to come. We need to grow that revenue in a more disciplined way, while keeping costs in line with our targets to maintain as a much lower percentage of SG&A of revenue, SG&A as a percentage of revenue. Why is this the right time for store expansion, given a mixed environment and traffic, which has been tough? ... So we're certainly taking the, do you mind? I'm okay. Yeah, we're certainly taking our foot off the gas a little bit on store expansion this year. We are in the year that we just finished, we had we added 17 permanent stores. We're gonna add just just a handful this year, so 3 new permanent locations. We're gonna convert three, and we're gonna add 4 concessions, so obviously a much smaller footprint, a little bit lower CapEx investment. Our job, we know that there's a lot of white space around store opportunities in the markets that we're in and markets where we're not very deep yet, but we also know that in order to capitalize on that in the right way, we absolutely have to become better retailers. And so it's not really, in our view, it's not the right time to add a lot of stores. It's the right time to add a handful, while we get our operations, as effective as- Mm-hmm ... we need them to be. But just to be clear, that's about freeing up time and focus- Yeah ... internally, not about the massive amount of opportunity there is. There's absolutely massive opportunity. Our brand is still so small, CAD 1.3 billion, right? We still have a lot of opportunity to tap into that white space, but we wanna do it in the right way and really get the maximum out of our current base before we begin to expand quickly again. What's on your mind for digital in terms of connecting offline and online, and digital traffic and conversion relative to physical traffic and conversion? We have a really well-coordinated business today between our online D2C channel and our store D2C channel. Our store brand ambassadors are regularly sending people online, helping them complete transactions online if we don't have the inventory in the store. So there's pretty good, you know, coordination today. That said, we have so much we can do better. When we market to consumers, for example, through our, you know, email and social channels, we're not often enough reminding them we might have a store in their neighborhood where they could come in and do personalization on a product in some of our stores or try on the greatest new styles. We have a lot of opportunity to better leverage our omni-channel presence, as we continue to grow and evolve the brand. What about inventory management? Inventories, attractively were lower in Q4, down 6% versus the sales increase of 22%. What are your expectations in terms of how this will grow relative to sales? We need to get much better at inventory turns. As you said, they're moving in the right direction, but we've got a lot of room to improve. We had about 0.9 times inventory turn last year. This year, we'll get something above one. That's really due to two primary levers. One obviously, you know, moving our sales volume, hitting the sales targets, but it's really also about being more disciplined about the product we create. We're a vertically integrated manufacturer, which is an awesome asset. We also have, as Neil mentioned, these evergreen styles that are in our lines for years. So you can actually make inventory today, and not only does it not decay in value, it actually increases in value. We're a full-price brand. We don't mark down, and often, our products increase in price year over year, so the inventory can be worth more. Those are amazing advantages, but to be honest, we probably got a little complacent with those advantages and built more inventory than we should have over the past two years, and you see that showing up on our balance sheet. So this year, we're really committed to being that much more judicious in how we use our capital, and so we've done a contemporary pullback in production to help work through the high-quality inventory we have on the balance sheet before we regrow and really get that turns moving to a metric more like what you might wanna see. What is your philosophy on price increases throughout the year and also, t here have been some sticker shock price increases. It just depends on the sector, but what do you see happening? So, we typically only increase price once a year, and we've done that, at the beginning of, I think the beginning of May this year, and so that is now in market. As a general rule, we look at, from an architecture perspective, every market. We look at some external data, we take feedback from the consumer, and we look at where we should be relative to, the rest of the line, as well as kinda what the external data points are. In the current year, we're taking mid-single digits. That's probably a little bit lighter than where we were 12 months ago, and you know, I think our thinking there is that with a little bit of consumer pressure, we wanna be sort of responsive to that, and so feel like we're in the right place, and that depends on, you know, whether that's a core style or something new, but we feel pretty good about where we're at in terms of pricing. The creative director announcement is very exciting. I think it's a great step in an edited, curated lifestyle direction. Why was this a choice for you, Haider Ackermann? He comes from a lineage of really special artisanal DNA, given his experience with many of the top French houses. Yeah. So first, you know, kind of why now for creative director? I mean, you alluded to this, but we have a lot of opportunity to evolve our product, our design aesthetic, and the search has been underway for the right creative director for Canada Goose for well over a year now. You know, Dani is really visionary in how he thinks about how to continue to evolve the brand, and this is a need he identified, and we got started on the process of finding the right person, and we really took our time because that chemistry is super important, as you know. When we met Haider, it was clear that the combination of his legacy, that rooting in true luxury and true, you know, being an artisan, understanding craftsmanship, understanding heritage and how important and real those are, and you can't fake them, he understood that, and he got really energized by the history of Canada Goose, by our authentic, not only heritage, but the craftsmanship, you know, manufacturing in Canada. He and Dani took a trip to the Arctic to see the polar bears, which is what led to his first product being the PBI sweatshirt to support polar bears because he was so moved by how climate change is impacting the polar bears, and he really found a resonance for him personally in our brand. Then that combination of his capabilities and design aesthetic and his personal resonance with the brand is really what made it such a great fit. So we're excited about what he's gonna create. We've obviously launched that first product together. And Haider and Jane are just a super powered duo that created a really great brand moment for us. He'll launch a capsule this fall and then continue to have, obviously, expanding influence on, on the product from there, but we're really excited for the work he's gonna do to help us elevate the brand, bring, bring more bold, unique style to the table, while not losing that core, authentic craftsmanship heritage that we're so known for. Related question, but what does innovation mean to you? How are you pursuing this idea of innovation? So, we are a believer that innovation needs to be embedded in everything we do at Canada Goose. Certainly, from a product perspective, but frankly, outside of product as well, in our stores and the way we use data inside our business, right? Mm-hmm. Innovation has to happen everywhere. And so a lot of what we're doing is really embedding innovation at various points in the process to ask: How can we, you know, look at new fabrications and new types of materials that could be used in a product? Maybe it's an existing product that's been in the line forever, but there's a new way that a material can bring a different consumer benefit. Or maybe we should be looking at the materials up front, and then identifying once we've found a unique material, is there a way to bring it to life for consumers? But really embedding it at every point in the product development process, and more broadly, rather than thinking about it as a kinda side project that a few people work on, but it never quite sees the light of day for consumers. You mentioned simpler a few times in the beginning of the presentation. What do you mean there in terms of the simplification opportunities, and any examples you may have? So many examples. Yeah. You wanna start? I like the word. word. I think about it as focus, and so, there are, you know, there are making faster decisions and everyone in the organization understanding what the core responsibilities are in the next 12 months and, and, and beyond. And so D2C execution, there is no debate about getting the stores right, being a really critical focus. So let's simplify what we need to focus on, and there are a lot of other opportunities. This is a brand where there are a tremendous amount of opportunities, and sometimes those opportunities just need to wait. And so I think, I think of it very much as, how do we focus on the things that are gonna have the biggest impact? Yeah. The analogy we use in the organization is triaging, like in an emergency room environment. Everyone's injury deserves treatment. Every opportunity, we are a brand that has tons of opportunities, incredibly exciting. The problem is, if you try to do them all, you don't do enough of them well, and so we're using the triage analogy to say, "Okay, is this the highest and best use of the team's time?" You know, there's lots of examples of this. You know, certainly in the way we did the reorganization that we announced in March. We, many more of the headcount roles that we reduced were actually senior levels in the organization. You all know how organizations work. The kinda ideas and work tends to come from the top, and the work tends to get done at the bottom in the org chart. If we have, you know, fewer managers with higher spans of control, you actually have the ability to really ensure that work gets done really well. There, in the operations part of the organization, we reduced the number of senior leaders in that in half, and we are operating better today. We're operating in a more coordinated fashion, making better collaborative decisions together rather than having people work in silos, and that leads to less work, but more impact, which is what we're going for. We have an experiential retail fair later today. What does experiential retail mean to you? What's your dream store? You pioneered the Cold Rooms and had many theatrical experiences in your store so far, but what's next? So a lot of you raised your hand that you own Canada Goose parkas. You know, think about that experience, maybe the first time you put it on, on a really cold day, walking down the streets of New York, and you put your hands in the pockets, and you realize, "Holy cow, these pockets are fleece-lined, and they feel amazing. I've never had a jacket that had pockets that feel like that." That's, that's the Canada Goose product experience, and we need to bring that to life in the store, and we need to bring that to life for lots more than just the parka. So obviously, the Cold Room, the vision of the Cold Room is so you can have that experience I just described in a store, you know, no matter what the geography, and on a beautiful day like today, you know, you can have that in the store. But the other experiences that we're bringing to life are about really telling the story of the brand. How many of you knew before this talk today that we were founded in 1957 and had an over 60-year history? I'm guessing many of you didn't even know we were a vertically integrated manufacturer. So bringing to life these aspects of our brand in our stores, through digital engagement channels, to really help people understand the history and the heritage. You wouldn't believe some of the people who are sewers in our factories in Canada, who've been sewing with us, like, literally some of them, I think, longer than Dani's been alive, probably. If not, like, he was in elementary school. And these people bring such passion and skill to the work they do every day, and we don't yet tell you all and the consumers around the world that story enough, and that's what the experience means to us. Neil, so what do you think is least appreciated about the Canada Goose story? I think there's a couple things. I'm always reminded when I talk to people for the first time about Canada Goose, that there's so much more to the brand than just warm coats, and yet, that seems to be people's first and sometimes only sort of entry point into the brand, and there's just so much more. The heritage Beth talked about, the fact that we're vertically integrated. That gives us a huge amount of competitive advantage in terms of the unit economics of this business in terms of product. I'm just hopeful that as, you know, what you've heard today, and as you experience the stories, you'll see the colors, the products that are, you know, to be worn today and you know, on maybe not warm days, but on many, many other days around of the year. So I just think there's just so much more to us than warm jackets. A question we're asking everybody: How are you using AI within your business? And how would you rate the health of the consumer on a scale of one to 10, perhaps by region? I'll take the second one and then maybe the- All right, great. Take the AI one? Okay. So AI, I mean, look, every business has a massive amount of opportunities on how to use AI. For us, you know, the examples of the places that we are beginning to use it and need to use it a lot more, yeah, in the way we do technology, you know, development as an organization, and the way we do finance, analytics, strategy, insights, competitive intelligence development, which is a huge focus for us to be more externally oriented. We can really, leverage AI to help us do that. Merchandising, I mean, you name it, the opportunities are endless, and there's a lot of experimentation and innovation in the business. A big theme for us this year is kind of encouraging entrepreneurship among our employee base and kind of take your own creativity. Yeah, we've grown big, you know, relative to what people who were at the business three, five years ago are used to, but we're still a really small organization. You can operate nimbly and just take these great ideas about how you believe you can use AI to make your job better and go make it happen. Wanna take the consumer one? Yeah. I mean, my take is somewhere between five and six, and I don't know how much of that is real and how much of that's perception, because it's just hard to tell. But there's clearly some caution, whether that's in the U.S. or Europe or in Asia, around spending and around spending on luxury goods. And so I am very hopeful that recovery is fast, but I think there's still a degree of pressure. Well, it's an honor to have you both here. It's an iconic brand. Your products last forever, and you have so much innovation opportunity ahead, it's clear, with a new director and also this focus of choosing the right projects.