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TORONTO--(BUSINESS WIRE)--Nov 2, 2022--
Canada Goose Holdings Inc. (“Canada Goose” or the “Company”) (NYSE:GOOS, TSX:GOOS) today announced financial results for the second quarter ended October 2, 2022 (“Q2 2023” or “Q2 ended October 2, 2022”). All amounts are in Canadian dollars unless indicated.
“We are encouraged by our performance in the second quarter of fiscal 2023, driven by topline growth of 19%,” said Dani Reiss, Chairman and CEO. “Given the extent of Covid disruptions in Mainland China as well as an uncertain global macroeconomic backdrop, we have revised our fiscal 2023 outlook. We will continue to leverage our competitive strengths and remain focused on the things we can control, including disciplined investment spend. We remain confident in our brand strength and see a long runway ahead to drive profitable growth by increasing our direct-to-consumer mix, expanding our penetration in key markets, and expanding our product offerings.”
Key Second Quarter Fiscal 2023 Results | |||||||||||||
CAD $ millions (except share and per share data) | Second quarter ended |
| $ Change |
| % Change | ||||||||
October 2, |
| September 26, 2021 5 |
|
| |||||||||
Revenue |
| 277.2 |
|
|
| 232.9 |
|
| 44.3 |
|
| 19.0 | % |
Gross profit |
| 165.8 |
|
|
| 135.0 |
|
| 30.8 |
|
| 22.8 | % |
Gross margin |
| 59.8 | % |
|
| 58.0 | % |
|
|
| 180 bps | ||
Operating income |
| 4.7 |
|
|
| 12.6 |
|
| (7.9 | ) |
| (62.7 | ) % |
Operating margin |
| 1.7 | % |
|
| 5.4 | % |
|
|
| (370) bps | ||
Net income attributable to shareholders of the Company |
| 3.3 |
|
|
| 9.9 |
|
| (6.6 | ) |
| (66.7 | ) % |
Earnings per share attributable to shareholders of the Company |
|
|
|
|
|
|
| ||||||
Basic | $ | 0.03 |
|
| $ | 0.09 |
|
| (0.06 | ) |
| (66.7 | ) % |
Diluted | $ | 0.03 |
|
| $ | 0.09 |
|
| (0.06 | ) |
| (66.7 | ) % |
Weighted average number of shares outstanding |
|
|
|
|
|
|
| ||||||
Basic |
| 105,334,265 |
|
|
| 109,780,547 |
|
|
|
|
| ||
Diluted |
| 105,864,969 |
|
|
| 110,805,942 |
|
|
|
|
| ||
Non-IFRS Financial Measures 4: |
|
|
|
|
|
|
| ||||||
Adjusted EBIT |
| 29.6 |
|
|
| 17.4 |
|
| 12.2 |
|
| 70.1 | % |
Adjusted EBIT margin |
| 10.7 | % |
|
| 7.5 | % |
|
|
| 320 bps | ||
Adjusted net income attributable to shareholders of the Company |
| 23.0 |
|
|
| 14.1 |
|
| 8.9 |
|
| 63.1 | % |
Adjusted net income per basic share attributable to shareholders of the Company | $ | 0.22 |
|
| $ | 0.13 |
|
| 0.09 |
|
| 69.2 | % |
Adjusted net income per diluted share attributable to shareholders of the Company | $ | 0.22 |
|
| $ | 0.13 |
|
| 0.09 |
|
| 69.2 | % |
Revenue
Q2 2023 revenue grew 19.0% on a reported basis and 22.3% on a constant currency revenue 6 basis. The strength of the US dollar compared to the Canadian dollar was outweighed by depreciation of the pound sterling and euro relative to the Canadian dollar.
Revenue By Segment
| Second quarter ended |
| $ Change |
| % Change | ||||||||
CAD $ millions | October 2, |
| September 26, |
| As |
| Foreign |
| In constant |
| As |
| In constant |
DTC | 94.8 |
| 82.0 |
| 12.8 |
| 2.4 |
| 15.2 |
| 15.6% |
| 18.5% |
Wholesale | 180.7 |
| 149.1 |
| 31.6 |
| 5.2 |
| 36.8 |
| 21.2% |
| 24.7% |
Other | 1.7 |
| 1.8 |
| (0.1) |
| — |
| (0.1) |
| (5.6)% |
| (5.6)% |
Total revenue | 277.2 |
| 232.9 |
| 44.3 |
| 7.6 |
| 51.9 |
| 19.0% |
| 22.3% |
DTC revenue grew 15.6% largely due to continued retail expansion, with 45 permanent stores in Q2 2023 compared to 38 permanent stores in the comparative quarter. Revenue from existing stores grew in all geographies except Asia Pacific. DTC revenue in Asia Pacific was negatively impacted by COVID-19 related restrictions, which resulted in store closures, reduced hours, and significantly lower retail traffic, which were not prevalent in the comparative quarter. DTC comparable sales growth 7 was (4.0%), which included positive comparable sales growth in all geographies except Asia Pacific.
Wholesale revenue grew 21.2% due to earlier order book fulfillment as well as an increase in order book value.
Revenue by Geography
| Second quarter ended |
| $ Change |
| % Change | ||||||||
CAD $ millions | October 2, |
| September 26, |
| As |
| Foreign |
| In |
| As |
| In |
Canada | 58.7 |
| 46.9 |
| 11.8 |
| — |
| 11.8 |
| 25.2 % |
| 25.2 % |
United States | 74.2 |
| 61.7 |
| 12.5 |
| (0.6) |
| 11.9 |
| 20.3 % |
| 19.3 % |
Asia Pacific | 56.4 |
| 58.9 |
| (2.5) |
| 2.1 |
| (0.4) |
| (4.2) % |
| (0.7) % |
EMEA 8 | 87.9 |
| 65.4 |
| 22.5 |
| 6.1 |
| 28.6 |
| 34.4 % |
| 43.7 % |
Total revenue | 277.2 |
| 232.9 |
| 44.3 |
| 7.6 |
| 51.9 |
| 19.0 % |
| 22.3 % |
Q2 2023 revenue grew in all geographies except Asia Pacific. Canada, the United States and EMEA continued to experience increased sales within existing stores and also benefited from Wholesale growth as described above. EMEA experienced an even larger increase in Wholesale order book value relative to the other geographies.
Gross profit and gross margin
Gross profit increased 22.8% due to higher revenue as noted above and gross margin increased by 180 basis points. Q2 2023 gross margin increased in both DTC and Wholesale segments. The total gross margin was favourably impacted by pricing, lower product costs largely driven by increased production efficiencies, and less distributor sales, which are lower margin. These benefits were partially offset by product mix and the unfavourable impact of the fair value inventory acquisition adjustment on sales related to the Japan joint venture.
Operating income and adjusted EBIT
Operating income declined largely due to unfavourable foreign exchange fluctuations related to the Company’s senior secured term loan facility (the “Term Loan Facility”) and working capital, net of hedge impacts, incremental personnel costs, and higher costs related to retail expansion and investments in strategic initiatives, partially offset by higher gross profit as described above and the timing of marketing spend. Adjusted EBIT increased primarily due to higher gross profit and the timing of marketing spend, partially offset by incremental personnel costs, higher costs related to retail expansion and investments in strategic initiatives.
Net income and adjusted net income
Net income was lower while adjusted net income was higher compared to Q2 2022 primarily as a result of the factors described above.
Balance Sheet Highlights
Cash was $97.1m as at Q2 ended October 2, 2022, compared to $98.9m as at Q2 ended September 26, 2021 largely due to a greater investment in working capital.
Inventory was $511.5m as at Q2 ended October 2, 2022, compared to $416.4m as at Q2 ended September 26, 2021. Of the increase, $27.4m is related to the Japan joint venture. Inventory levels increased ahead of our peak selling season to keep pace with growth and were further supported by domestic production levels gradually returning to pre-pandemic manufacturing levels. Additionally, we aim to mitigate supply chain risks through earlier acquisition and higher volumes of offshore production in support of growth relative to the comparative quarter. We monitor the levels of inventory in each of our sales channels and across geographic regions and align with demand that we forecast in each region.
Third Quarter and Full Year Fiscal 2023 Outlook 9
For fiscal 2023, the Company has lowered the overall guidance ranges from its original outlook. The revised guidance assumes that Covid-19 restrictions in Mainland China will continue to negatively impact performance consistent with the extent of the impact experienced in the third quarter fiscal 2023 sales trend to date. The revised ranges also reflect the significant uncertainty from the broader macro-economic and political environment. The Company remains relentlessly focused on capitalizing on its growth opportunities and driving further brand heat while also tightly controlling all non-strategic spend in an effort to maximize profitable growth.
The Company currently expects:
For the third quarter of fiscal 2023, the Company currently expects:
This outlook is based on a number of assumptions, including the following:
Within the meaning of applicable securities laws, this outlook constitutes forward-looking information. The purpose of this outlook is to provide a description of management's expectations regarding the Company's financial performance and may not be appropriate for other purposes. Actual results could vary materially as a result of numerous factors, including the extent and duration of operational disruptions that may affect our business as a result of the COVID-19 pandemic and other risk factors, many of which are beyond the Company’s control. See “Cautionary Note Regarding Forward-Looking Statements”.
Conference Call Information
The Company will host the conference call at 9:00 a.m. Eastern Time on November 2, 2022. The conference call can be accessed by using the following link: https://register.vevent.com/register/BI05bed180dc4540d48275ebb11241bdaa. After registering, an email will be sent including dial-in details and a unique conference call pin required to join the live call. A live webcast of the conference call will also be available on the investor relations page of the company's website at http://investor.canadagoose.com.
About Canada Goose
Founded in 1957 in a small warehouse in Toronto, Canada, Canada Goose (NYSE:GOOS, TSX:GOOS) is a lifestyle brand and a leading manufacturer of performance luxury apparel. Every collection is informed by the rugged demands of the Arctic, ensuring a legacy of functionality is embedded in every product from parkas and rainwear to apparel and accessories. Canada Goose is inspired by relentless innovation and uncompromised craftsmanship, recognized as a leader for its Made in Canada commitment. In 2020, Canada Goose announced HUMANATURE, its purpose platform that unites its sustainability and values-based initiatives, reinforcing its commitment to keep the planet cold and the people on it warm. Canada Goose also owns Baffin, a Canadian designer and manufacturer of performance outdoor and industrial footwear. Visit www.canadagoose.com for more information.
Condensed Consolidated Interim Statements of Income (Loss) (unaudited) (in millions of Canadian dollars, except share and per share amounts) | |||||||||||||
|
| Second quarter ended | Two quarters ended | ||||||||||
|
| October 2, | September 26, | October 2, | September 26, | ||||||||
|
|
| Restated |
| Restated | ||||||||
|
| $ | $ | $ | $ | ||||||||
Revenue |
|
| 277.2 |
|
| 232.9 |
|
| 347.1 |
|
| 289.2 |
|
Cost of sales |
|
| 111.4 |
|
| 97.9 |
|
| 138.6 |
|
| 123.5 |
|
Gross profit |
|
| 165.8 |
|
| 135.0 |
|
| 208.5 |
|
| 165.7 |
|
Gross margin |
|
| 59.8 | % |
| 58.0 | % |
| 60.1 | % |
| 57.3 | % |
SG&A expenses |
|
| 161.1 |
|
| 122.4 |
|
| 284.5 |
|
| 214.9 |
|
SG&A expenses as % of revenue |
|
| 58.1 | % |
| 52.6 | % |
| 82.0 | % |
| 74.3 | % |
Operating income (loss) |
|
| 4.7 |
|
| 12.6 |
|
| (76.0 | ) |
| (49.2 | ) |
Operating margin |
|
| 1.7 | % |
| 5.4 | % |
| (21.9 | ) % |
| (17.0 | ) % |
Net interest, finance and other costs |
|
| 6.8 |
|
| 7.9 |
|
| 14.2 |
|
| 24.4 |
|
(Loss) income before income taxes |
|
| (2.1 | ) |
| 4.7 |
|
| (90.2 | ) |
| (73.6 | ) |
Income tax recovery |
|
| (7.1 | ) |
| (5.2 | ) |
| (31.6 | ) |
| (26.0 | ) |
Effective tax rate |
|
| 338.1 | % |
| (110.6 | ) % |
| 35.0 | % |
| 35.3 | % |
Net income (loss) |
|
| 5.0 |
|
| 9.9 |
|
| (58.6 | ) |
| (47.6 | ) |
Net income attributable to non-controlling interest |
|
| 1.7 |
|
| — |
|
| 0.5 |
|
| — |
|
Net income (loss) attributable to shareholders of the Company |
|
| 3.3 |
|
| 9.9 |
|
| (59.1 | ) |
| (47.6 | ) |
Weighted average number of shares outstanding |
|
|
|
|
| ||||||||
Basic |
|
| 105,334,265 |
|
| 109,780,547 |
|
| 105,284,370 |
|
| 110,122,185 |
|
Diluted |
|
| 105,864,969 |
|
| 110,805,942 |
|
| 105,284,370 |
|
| 110,122,185 |
|
Earnings (loss) per share attributable to shareholders of the Company |
|
|
|
|
| ||||||||
Basic |
| $ | 0.03 |
| $ | 0.09 |
| $ | (0.56 | ) | $ | (0.43 | ) |
Diluted |
| $ | 0.03 |
| $ | 0.09 |
| $ | (0.56 | ) | $ | (0.43 | ) |
Non-IFRS Financial Measures: 1 |
|
|
|
|
| ||||||||
Adjusted EBIT |
|
| 29.6 |
|
| 17.4 |
|
| (46.0 | ) |
| (43.9 | ) |
Adjusted EBIT margin |
|
| 10.7 | % |
| 7.5 | % |
| (13.3 | ) % |
| (15.2 | ) % |
Adjusted net income (loss) attributable to shareholders of the Company |
|
| 23.0 |
|
| 14.1 |
|
| (35.5 | ) |
| (36.7 | ) |
Adjusted net income (loss) per basic share attributable to shareholders of the Company |
| $ | 0.22 |
| $ | 0.13 |
| $ | (0.34 | ) | $ | (0.33 | ) |
Adjusted net income (loss) per diluted share attributable to shareholders of the Company |
| $ | 0.22 |
| $ | 0.13 |
| $ | (0.34 | ) | $ | (0.33 | ) |
1See “Non-IFRS Financial Measures and Other Specified Financial Measures”. |
Condensed Consolidated Interim Statements of Comprehensive Income (Loss) (unaudited) (in millions of Canadian dollars, except per share amounts) | ||||||
|
| Second quarter ended |
| Two quarters ended | ||
|
| October 2, | September 26, |
| October 2, | September 26, |
|
|
| Restated |
|
| Restated |
|
| $ | $ |
| $ | $ |
|
|
|
|
|
|
|
Net income (loss) |
| 5.0 | 9.9 |
| (58.6) | (47.6) |
|
|
|
|
|
|
|
Other comprehensive income (loss) |
|
|
|
|
|
|
Items that will not be reclassified to earnings, net of tax: |
|
|
|
|
|
|
Actuarial gain on post-employment obligation |
| 1.0 | 0.2 |
| 1.0 | 0.2 |
Items that may be reclassified to earnings, net of tax: |
|
|
|
|
|
|
Cumulative translation adjustment (loss) gain |
| (3.7) | 1.6 |
| (11.8) | (0.2) |
Net gain (loss) on derivatives designated as cash flow hedges |
| 7.8 | (2.0) |
| 9.1 | (1.9) |
Reclassification of net (gain) loss on cash flow hedges to income |
| (0.1) | 0.4 |
| 1.5 | 0.5 |
Other comprehensive income (loss) |
| 5.0 | 0.2 |
| (0.2) | (1.4) |
Comprehensive income (loss) |
| 10.0 | 10.1 |
| (58.8) | (49.0) |
|
|
|
|
|
|
|
Attributable to: |
|
|
|
|
|
|
Shareholders of the Company |
| 7.8 | 10.1 |
| (59.7) | (49.0) |
Non-controlling interest |
| 2.2 | — |
| 0.9 | — |
Comprehensive income (loss) |
| 10.0 | 10.1 |
| (58.8) | (49.0) |
Condensed Consolidated Statements of Financial Position (unaudited) (in millions of Canadian dollars) | |||
| October 2, | September 26, | April 3, |
|
| Restated |
|
Assets | $ | $ | $ |
Current assets |
|
|
|
Cash | 97.1 | 98.9 | 287.7 |
Trade receivables | 150.0 | 111.2 | 42.7 |
Inventories | 511.5 | 416.4 | 393.3 |
Income taxes receivable | 10.5 | 9.3 | 1.1 |
Other current assets | 63.4 | 49.4 | 37.5 |
Total current assets | 832.5 | 685.2 | 762.3 |
|
|
|
|
Deferred income taxes | 90.0 | 79.0 | 53.2 |
Property, plant and equipment | 122.4 | 125.9 | 114.2 |
Intangible assets | 133.3 | 124.7 | 122.2 |
Right-of-use assets | 274.3 | 253.0 | 215.2 |
Goodwill | 64.1 | 53.1 | 53.1 |
Other long-term assets | 26.9 | 5.2 | 20.4 |
Total assets | 1,543.5 | 1,326.1 | 1,340.6 |
|
|
|
|
Liabilities |
|
|
|
Current liabilities |
|
|
|
Accounts payable and accrued liabilities | 218.4 | 195.2 | 176.2 |
Provisions | 21.7 | 18.0 | 18.5 |
Income taxes payable | 12.9 | 16.4 | 24.5 |
Short-term borrowings | 57.3 | 27.3 | 3.8 |
Current portion of lease liabilities | 65.4 | 55.8 | 58.5 |
Total current liabilities | 375.7 | 312.7 | 281.5 |
|
|
|
|
Provisions | 31.7 | 27.0 | 31.3 |
Deferred income taxes | 23.2 | 14.2 | 15.8 |
Revolving facility | 55.1 | — | — |
Term loan | 402.7 | 372.9 | 366.2 |
Lease liabilities | 250.1 | 224.0 | 192.2 |
Other long-term liabilities | 38.5 | 21.7 | 25.7 |
Total liabilities | 1,177.0 | 972.5 | 912.7 |
|
|
|
|
Equity |
|
|
|
Equity attributable to shareholders of the Company | 355.4 | 353.6 | 427.9 |
Non-controlling interests | 11.1 | — | — |
Total equity | 366.5 | 353.6 | 427.9 |
Total liabilities and equity | 1,543.5 | 1,326.1 | 1,340.6 |
Non-IFRS Financial Measures and Other Specified Financial Measures
This press release includes references to certain non-IFRS financial measures such as adjusted EBIT, adjusted net income (loss) and constant currency revenue and certain non-IFRS ratios such as, adjusted EBIT margin, adjusted net income (loss) attributable to shareholders of the Company and adjusted net income (loss) per basic and diluted share attributable to the shareholders of the Company. These financial measures are employed by the Company to measure its operating and economic performance and to assist in business decision-making, as well as providing key performance information to senior management. The Company believes that, in addition to conventional measures prepared in accordance with IFRS, certain investors and analysts use this information to evaluate the Company’s operating and financial performance. These financial measures are not defined under IFRS nor do they replace or supersede any standardized measure under IFRS. Other companies in our industry may calculate these measures differently than we do, limiting their usefulness as comparative measures. Definitions and reconciliations of non-IFRS measures to the nearest IFRS measure can be found in our MD&A. Such reconciliations can also be found in this press release under “Reconciliation of Non-IFRS Measures” and, in the case of constant currency revenue, under “Revenue”.
This press release also includes DTC comparable sales growth which is a supplementary financial measure defined as sales on a constant currency basis from e-Commerce sites and stores which have been operating for one full year (12 successive fiscal months). The measure excludes store sales from both periods for the specific trading days when the stores were closed, whether those closures occurred in the current period or the comparative period.
Reconciliation of Non-IFRS Measures
The tables below reconcile net income (loss) to adjusted EBIT and adjusted net income (loss) attributable to shareholders of the Company for the periods indicated. Adjusted EBIT margin is equal to adjusted EBIT for the period presented as a percentage of revenue for the same period.
| Second quarter ended |
| Two quarters ended | ||||||||
CAD $ millions | October 2, |
| September 26, |
| October 2, |
| September 26, | ||||
Net income (loss) | 5.0 |
|
| 9.9 |
|
| (58.6 | ) |
| (47.6 | ) |
Add (deduct) the impact of: |
|
|
|
|
|
|
| ||||
Income tax recovery | (7.1 | ) |
| (5.2 | ) |
| (31.6 | ) |
| (26.0 | ) |
Net interest, finance and other costs | 6.8 |
|
| 7.9 |
|
| 14.2 |
|
| 24.4 |
|
Operating income (loss) | 4.7 |
|
| 12.6 |
|
| (76.0 | ) |
| (49.2 | ) |
Unrealized foreign exchange loss on Term Loan Facility (a) | 16.8 |
|
| 3.0 |
|
| 15.3 |
|
| 2.1 |
|
Share-based compensation (b) | — |
|
| — |
|
| — |
|
| 0.1 |
|
Net temporary store closure costs (c) | 0.2 |
|
| — |
|
| 2.4 |
|
| 0.2 |
|
Pre-store opening costs (d) | 3.3 |
|
| 1.2 |
|
| 3.6 |
|
| 2.1 |
|
Transition of logistics agencies (g) | — |
|
| 0.1 |
|
| — |
|
| 0.1 |
|
Japan joint venture costs (h) | 2.8 |
|
| — |
|
| 4.2 |
|
| — |
|
Head office transition costs (i) | 1.5 |
|
| — |
|
| 3.2 |
|
| — |
|
Other (k) | 0.3 |
|
| 0.5 |
|
| 1.3 |
|
| 0.7 |
|
Total adjustments | 24.9 |
|
| 4.8 |
|
| 30.0 |
|
| 5.3 |
|
Adjusted EBIT | 29.6 |
| 17.4 |
| (46.0 | ) |
| (43.9 | ) | ||
Adjusted EBIT margin | 10.7 | % |
| 7.5 | % |
| (13.3 | )% |
| (15.2 | )% |
|
| Second quarter ended |
| Two quarters ended | ||||||||
CAD $ millions | October 2, |
| September 26, |
| October 2, |
| September 26, | ||||
Net income (loss) | 5.0 |
|
| 9.9 |
|
| (58.6 | ) |
| (47.6 | ) |
Add (deduct) the impact of: |
|
|
|
|
|
|
| ||||
Unrealized foreign exchange loss on Term Loan Facility (a) | 16.8 |
|
| 3.0 |
|
| 15.3 |
|
| 2.1 |
|
Share-based compensation (b) | — |
|
| — |
|
| — |
|
| 0.1 |
|
Net temporary store closure costs (c) (e) | 0.3 |
|
| — |
|
| 2.5 |
|
| 0.2 |
|
Pre-store opening costs (d) (f) | 3.6 |
|
| 1.4 |
|
| 4.0 |
|
| 2.4 |
|
Transition of logistics agencies (g) | — |
|
| 0.1 |
|
| — |
|
| 0.1 |
|
Japan joint venture costs (h) | 2.8 |
|
| — |
|
| 4.2 |
|
| — |
|
Head office transition costs (i) (j) | 1.8 |
|
| — |
|
| 3.9 |
|
| — |
|
Acceleration of unamortized costs on Term Loan Facility Repricing (l) | — |
|
| — |
|
| — |
|
| 9.5 |
|
Japan joint venture remeasurement gain of contingent consideration and put option (m) | (2.0 | ) |
| — |
|
| (2.0 | ) |
| — |
|
Other (k) | 0.3 |
|
| 0.5 |
|
| 1.3 |
|
| 0.7 |
|
Total adjustments | 23.6 |
|
| 5.0 |
|
| 29.2 |
|
| 15.1 |
|
Tax effect of adjustments | (3.6 | ) |
| (0.8 | ) |
| (5.0 | ) |
| (4.2 | ) |
Adjusted net income (loss) | 25.0 |
|
| 14.1 |
|
| (34.4 | ) |
| (36.7 | ) |
Adjusted net income attributable to non-controlling interest (n) | (2.0 | ) |
| — |
|
| (1.1 | ) |
| — |
|
Adjusted net income (loss) attributable to shareholders of the Company | 23.0 |
|
| 14.1 |
|
| (35.5 | ) |
| (36.7 | ) |
|
(a) | Unrealized gains and losses on the translation of the Term Loan Facility from USD to CAD, net of the effect of derivative transactions entered into to hedge a portion of the exposure to foreign currency exchange risk all of which are included in SG&A expenses. | |
(b) | Non-cash based compensation expense on stock options issued prior to the Company’s initial public offering (“IPO”) under the Legacy Plan and cash payroll taxes paid of less than $0.1m and less than $0.1m in the second and two quarters ended October 2, 2022, respectively (second and two quarters ended September 26, 2021 - less than $0.1m and $0.1m, respectively) on gains earned by option holders (compensation) when stock options are exercised. | |
(c) | Net temporary store closure costs of $0.3m and $2.5m were incurred in the second and two quarters ended October 2, 2022, respectively (second and two quarters ended September 26, 2021 - less than $0.1m and $0.2m, respectively). | |
(d) | Costs incurred during pre-opening periods for new retail stores, including depreciation on right-of-use assets. | |
(e) | Includes $0.1m and $0.1m of interest expense on lease liabilities for temporary store closures for both the second and two quarters ended October 2, 2022, respectively (second and two quarters ended September 26, 2021 - $nil and less than $0.1m, respectively). | |
(f) | Pre-store opening costs incurred in (d) above as well as $0.3m and $0.4m of interest expense on lease liabilities for new retail stores during pre-opening periods for the second and two quarters ended October 2, 2022, respectively (second and two quarters ended September 26, 2021 - $0.2m and $0.3m, respectively). | |
(g) | Costs incurred for the transition of logistics, warehousing, and freight forwarding agencies to enhance our global distribution structure. | |
(h) | Costs in connection with the establishment of the Japan joint venture including the impact of gross margin that would otherwise have been recognized on the sale of inventory recorded at net realizable value less costs to sell. | |
(i) | Costs incurred for the corporate head office transition, including depreciation on right-of-use assets. | |
(j) | Corporate head office transition costs incurred in (i) as well as $0.3m and $0.7m of interest expense on lease liabilities for the second and two quarters ended October 2, 2022, respectively (second and two quarters ended September 26, 2021 - $nil and $nil, respectively). | |
(k) | Costs for legal proceeding fees including for the defence of class action lawsuits and rent abatements received. | |
(l) | Non-cash unamortized costs accelerated in connection with the repricing amendment for the Term Loan Facility entered into on April 9, 2021. | |
(m) | During the second quarter ended October 2, 2022, the Company recorded a gain of $(3.7)m and a loss of $1.7m on the fair value remeasurement of the contingent consideration and put option liability, respectively, related to the Japan joint venture agreement (note 3 in the interim financial statements). | |
(n) | Calculated as net income attributable to non-controlling interest less $0.3m and $0.6m of gross margin adjustment, put option liability and contingent consideration revaluation related to the Japan joint venture, and tax expense attributable to the non-controlling interest for the second and two quarters ended October 2, 2022, respectively. |
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements, including statements relating to the execution of our proposed strategy, early leading indicators and impacts for the third quarter of fiscal 2023, our operating performance and prospects, and the general impact of the COVID-19 pandemic on the business. These forward-looking statements generally can be identified by the use of words such as “believe,” “could,” “continue,” “expect,” “estimate,” “may,” “potential,” “would,” “will,” and other words of similar meaning. Each forward-looking statement contained in this press release, including, without limitation, our fiscal 2023 revised full year and third quarter financial outlook and the related assumptions included herein is subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statement. Our business is subject to substantial risks and uncertainties. Applicable risks and uncertainties include, among others, the impact of the ongoing COVID-19 pandemic and the extent and duration of related disruptions to our operations, as well as the evolution of the global economic conditions, and are discussed under the headings “Cautionary Note regarding Forward-Looking Statements” and “Factors Affecting our Performance” in our MD&A as well as in our “Risk Factors” in our Annual Report on Form 20-F for the year ended April 3, 2022. You are also encouraged to read our filings with the SEC, available at www.sec.gov, and our filings with Canadian securities regulatory authorities available at www.sedar.com for a discussion of these and other risks and uncertainties. Investors, potential investors, and others should give careful consideration to these risks and uncertainties. We caution investors not to rely on the forward-looking statements contained in this press release when making an investment decision in our securities. The forward-looking statements in this press release speak only as of the date of this release, and we undertake no obligation to update or revise any of these statements.
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CONTACT: Investors:
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KEYWORD: NORTH AMERICA CANADA
INDUSTRY KEYWORD: FASHION FOOTWEAR RETAIL LUXURY MANUFACTURING TEXTILES
SOURCE: Canada Goose Holdings Inc.
Copyright Business Wire 2022.
PUB: 11/02/2022 06:45 AM/DISC: 11/02/2022 06:47 AM
http://www.businesswire.com/news/home/20221102005432/en