Canada Goose Holdings Inc. (NYSE:GOOS) Q2 2024 Earnings Call Transcript

It sort of reminds consumer that this is the time that they should go and buy cold weather gear. And so, the longer you wait for that, the later it starts. And I think that is what we’ve experienced this year. I think when it comes to the consumer set, as Carrie was describing before, I think that Gen X – and that’s really where the aspirational consumer is most concentrated – is probably the area we’re seeing most effective [indiscernible]. When it comes to non-heavyweight doubt, our business is – obviously, it’s fairly seasonal, and therefore non-heavyweight down is more concentrated in particularly Q1 and Q2, as we saw this year. But as we think about it for the full year, it’s still going to be over half of the business by value. Last year, it was I think 63%.

And we should think about it to be in and around the high 50s, low 60s as a sort of normal place for the time being as we grow in establishing a non-heavyweight down categories. What I would also add is that, in Q2, we saw about five, six times the growth rate in non-heavyweight down compared to the growth that we saw in heavyweight down, understanding both of them were up.

Carrie Baker: The thing that excites me about that is where we’re seeing that. So highest sales growth in terms of rainwear, so we’re seeing that in APAC, followed by North America and then EMEA. I think Dani referred to this before, but our fleece category, so we’re seeing massive uptick in that, whether it’s outerwear, whether it’s the layering piece, customers are gravitating towards the Chilliwack and the Simcoe. What I really love about all of this is that the category expansion isn’t coming at the expense of gross margins. So, as we get into new categories at different price points, we’re still able to hold gross margins.

Dani Reiss: I just want to go back to the point I made earlier about traffic and how strong we’re feeling about our brand, given the traffic trends in our stores. This company has changed a lot over the years, from one that was really a very wholesale focused one to where now we’re more DTC than ever before, which is a really good thing for us in so many ways. But also, what it does is it pushes our revenue further to the right. Just back to your guidance question, [indiscernible] widen the range of outcomes, it’s really early to tell you how the macroenvironment is going to play out in these uncertain times. And we felt that was the responsible thing to do, but in regards to how we’re feeling about our brand and overall, we’re feeling really good about it.

Oliver Chen: A quick follow-up, you made progress on your e-commerce and you have really great leadership there. But what’s happening in that business in terms of what we should know. The consumer interface looks much better and the content looks really integrated. But overall, across the industry, we’ve been seeing traffic and conversion issues.

Dani Reiss: Appreciate the comments on our website, e-commerce platform. And we’re really focused on it. Also seeing traffic being very strong there as they are in stores, right? And we’ve got multiple projects going on, many of the tests that we’re working on concurrently to optimize conversion, and that’s what we’re focusing on. And many of those tests are working, and I expect it to continue to see those show progress in the quarter and the years to come.

Operator: Our next question comes from Rick Patel from Raymond James.

Rick Patel: You talked about seeing more gross margin expansion in the non-heavyweight down category. I was hoping you can expand on the drivers of that and how we should think about the stainability of these margins as we think about the puts and takes going forward.