Q3 revenue rose 13% YoY to CAD 695 million, driven by D2C (+13%) and wholesale (+14%), with fourth consecutive positive comps (+6%) and strong regional performance including North America +20% and Asia Pacific +12% led by Mainland China.
Profitability was pressured as gross margin declined ~40 basis points and SG&A increased CAD 66 million to CAD 314 million (45% of revenue), leaving adjusted EBIT margin at 29.3% and adjusted EPS of CAD 1.43.
Management plans actions to deliver “meaningful margin expansion” in fiscal 2027—including store labor changes, marketing efficiency, retail network optimization and gross‑margin levers—while the balance sheet strengthened with net debt down to CAD 413 million and inventory stable at CAD 409 million.
Canada Goose (NYSE:GOOS) executives highlighted continued momentum in demand and direct-to-consumer (D2C) performance during the company’s third-quarter fiscal 2026 earnings call, while also acknowledging meaningful profitability pressure and outlining actions aimed at restoring margin expansion in fiscal 2027.
Chief Financial Officer Neil Bowden said third-quarter revenue increased 13% year-over-year to CAD 695 million, driven by growth in both D2C and wholesale, particularly in North America and Asia Pacific. Management emphasized that Q3 is the company’s most important quarter given the winter peak season.
D2C revenue rose 13%, supported by double-digit growth in North America and Asia Pacific. Comparable sales increased 6%, marking the fourth consecutive quarter of positive comps, with contributions from both stores and e-commerce. Wholesale revenue increased 14%, which Bowden said reflected shipment timing shifts from Q2 to Q3 and incremental in-season demand, while the “other” channel delivered CAD 15 million, roughly flat year-over-year.
By region, Bowden reported that North America revenue grew 20%, with comparable sales up in the high single digits, supported by strong traffic and improved conversion in both Canada and the U.S. He attributed improved retail execution to staffing investments and better inventory positioning, while e-commerce also contributed to positive D2C performance.
In Asia Pacific, revenue increased 12%, with high single-digit comp growth driven by volume. Management pointed to Mainland China as the largest contributor, citing robust demand, strong e-commerce momentum on Douyin and Tmall, and conversion gains in key stores.
EMEA revenue declined 3%, reflecting what Bowden described as ongoing softness in the U.K. consumer environment and lower tourist traffic. He said Continental Europe performed better as the company’s relocated Paris and Milan stores ramped, while wholesale softness in the region was tied to shipment phasing versus last year. The company’s focus in EMEA includes improving conversion, tightening digital execution, and sharpening marketing effectiveness to offset macro headwinds.
Chairman and CEO Dani Reiss said the company began fiscal 2026 with a deliberate decision to “invest ahead of demand” to expand product relevance, strengthen brand equity, and build channel and geographic foundations for long-term growth. He said these investments contributed meaningfully to Q3 results, particularly in D2C, and supported traffic and conversion.
Reiss emphasized progress in expanding the assortment beyond heavyweight down parkas to improve year-round relevance. He said lighter-weight styles drove growth, while down-filled outerwear posted “solid gains.” Newer fabrics such as EnduraLuxe and wool were cited as contributors to elevated design and consumer response.
Management repeatedly pointed to “newness” as a driver of performance. Reiss said revenue from newness doubled year over year, including demand across lighter-weight styles, apparel, and the Snow Goose collection designed by Haider Ackermann. He also said Snow Goose served as a halo for the main collection and contributed to brand equity across the line, with upcoming campaigns expected to feature greater design oversight from Ackermann.
In the Q&A, management clarified that “newness” does not necessarily mean introducing a large number of entirely new styles; it also includes updating established silhouettes with new fabrications and colorways. Executives said they are comfortable with the current mix in stores and online, while watching closely to avoid becoming “over-skewed” to too broad an assortment.
Reiss said focused marketing investments across key moments—Fall/Winter 2025, Snow Goose launches, and holiday campaigns—improved visibility and cultural relevance and drove higher-quality traffic across retail and digital channels. He said brand desire, momentum, and social media “velocity” improved, supported by a shift toward upper-funnel investment, with particular strength in Mainland China. He also noted that despite a planned reduction in lower-funnel spend, the company saw year-over-year growth in repeat customers and higher return on ad spend.
On retail execution, management highlighted store openings in China and Chicago, as well as the relocation of the Milan store to what Reiss described as stronger adjacencies. Executives also pointed to improved digital experiences—such as discovery, navigation, speed, and storytelling—along with lower return rates across most regions.
However, Bowden said profitability was pressured. Gross margin declined 40 basis points year-over-year, primarily due to product mix: non-down outerwear grew faster than down-filled outerwear, weighing on margin, though this was characterized as consistent with the strategy to expand year-round assortment. A favorable channel mix from D2C comp growth partially offset the pressure.
SG&A increased CAD 66 million to CAD 314 million, or 45% of revenue, representing 450 basis points of deleverage year-over-year. Bowden attributed CAD 24 million of the increase to two discrete items:
He also said planned marketing investments represented a further CAD 13 million increase year-over-year. Beyond those items, management said it continued to generate leverage in corporate costs through disciplined headcount management and tight control of discretionary spending.
Bowden said D2C operating margin compression came from both gross margin decline and SG&A investments, including the run-rate impact of new stores and relocations. He also called out store labor productivity as a key issue in Q3, saying the company maintained labor levels that were “higher than required” during months of exceptionally strong traffic.
Adjusted EBIT for the quarter was CAD 204 million, representing an adjusted EBIT margin of 29.3%, down 450 basis points from the prior year. Adjusted results excluded CAD 3.5 million in earn-out costs related to the acquisition of a European manufacturer, which Bowden said would be the last quarter for those charges. Adjusted net income attributable to shareholders was CAD 142 million, or CAD 1.43 per diluted share, compared with CAD 148 million, or CAD 1.51 per diluted share, a year earlier.
Bowden said inventory ended the quarter at CAD 409 million, relatively flat year-over-year despite strong sales growth, with improved turns of 1.1x, up 16% from last year. Net debt fell to CAD 413 million from CAD 546 million a year earlier, which he attributed to working capital discipline, operating cash generation, and lower credit facility borrowings. He added that the company allocated more capital to new store builds in Q3 versus last year.
Looking ahead, management said it is taking steps to realign its cost base and expects the initiatives to support “meaningful margin expansion” in fiscal 2027. Actions discussed included:
Store labor model changes to improve productivity (implemented in Asia Pacific in mid-December and rolled out across other regions in January), with limited impact expected in fiscal 2026
Marketing efficiency improvements, with the stated intent to reduce marketing as a percentage of revenue in fiscal 2027 while maintaining brand momentum; Q4 marketing spend is expected to be lower than last year as a percentage of revenue
Minimal corporate expense growth through continued headcount and discretionary spend discipline
Retail network optimization, with a broader review underway and initiatives expected in fiscal 2027; management said it still plans to open new stores in fiscal 2027
Gross margin levers including vertical integration, operational efficiencies, and planned price changes across markets and assortment in early fiscal 2027
In the Q&A, company leaders said January performance “remains strong” and noted Lunar New Year shopping is occurring later in the quarter versus last year. Management reiterated that it plans to balance revenue growth with investments that deliver operating margin expansion beginning in fiscal 2027, with more color expected when it discusses fiscal 2027 plans after the fiscal year ends.
Canada Goose Holdings Inc, traded on the NYSE under the symbol GOOS, is a Canadian design and manufacturing company specializing in premium outerwear. The firm is best known for its down-filled jackets and parkas, engineered to deliver high performance in extreme cold weather. Over time, Canada Goose has expanded its product range to include knitwear, fleece, footwear, and accessories, all designed with an emphasis on technical innovation, quality craftsmanship, and functional style.
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