Canada Goose Holdings Inc. ($GOOS)

Hello, everyone. Thank you for joining us, and welcome to the Canada Goose Q4 2026 Earnings Call. [Operator Instructions] I will now hand the conference over to Ana Raman.

Good morning, everyone, and thank you for joining us today on the Canada Goose Q4 Fiscal 2026 Earnings Call. Today, you'll hear from Dani Reiss, our Chairman and CEO; Neil Bowden, Chief Financial Officer; Carrie Baker, President of Brand and Commercial; and Beth Clymer, President and Chief Operating Officer. We'll start with prepared remarks from Dani and Neil and then open up the call for questions. Today's presentation will contain forward-looking statements that are based on assumptions and therefore, subject to risks and uncertainties that could cause actual results to differ materially from those projected. We undertake no obligation to update these statements, except as required by law. Further information regarding these assumptions, risks and uncertainties is included in our press release issued earlier today and available on the Investor Relations section of our website. We report in Canadian dollars, so the amounts discussed today are in Canadian dollars unless otherwise indicated. Please note the financial results described on today's call will compare fourth quarter and fiscal 2026 results ended March 29, 2026, with the same period ended March 30, 2025, and stated revenue percent changes are in constant currency, unless otherwise noted. Lastly, our commentary today will also include certain non-IFRS financial measures, which are reconciled at the end of our earnings press release. With that, I'll turn the call over to Dani.

Good morning, and thank you for joining us. Fiscal 2026 was the year of focused execution across our key priorities in product, brand and channel execution. We made deliberate investments to strengthen the foundation of the business and the results are encouraging. Revenue grew 12% for the year and 18% in the fourth quarter. Direct-to-consumer comparable sales rose 8% for the year and 10% in Q4, our fifth straight quarter of positive comp growth, driven by stronger conversion and broader customer engagement. And wholesale returned to growth, up 9% for the year with a strong finish in Q4 as demand and sell-through improved. Just as important, our evolved marketing strategy drove accelerating brand momentum through the year. By extending our core strengths of performance and craftsmanship, we're expanding how and when people wear the brand. In fiscal '26, we expanded our customer base through both new acquisition and stronger reengagement, broadening relevance, increasing purchase frequency and deepening connection and desire with our customers. We backed that momentum with the right investments and the right execution, which translated into meaningful progress across each of our operating imperatives in the fourth quarter. First, we expanded our product offering to enhance year-round relevance. In the fourth quarter, our expanded assortment continued to resonate with customers across seasons and occasions. Demand was supported by a balanced mix of heritage outerwear, lighter weight styles and new design expressions that broadened how and when customers wear the brand. We launched our Spring/Summer 2026 collection, our largest assortment to date for the season and brought it to market earlier than in prior years, increasing visibility into our versatile offer. This strengthened our presence through the shoulder season and supported more consistent engagement beyond peak winter. And customers are responding. Apparel led growth in Q4 and for the year, while down-filled outerwear, remained the majority of our revenue and meaningful contributor to growth. That dynamic is exactly what we've been building towards. Second, we continue to build brand heat through focused marketing investments that supported revenue growth and improved brand health. We saw gains in desire and momentum with stronger performance versus key competitive benchmarks in several core markets. That brand momentum was clearly reflected in our fourth quarter performance. Marketing drove higher traffic and conversion across DTC around key product launches, supporting full price sell-through and reinforcing our luxury positioning of the brand. At the same time, we became more efficient using better data and measurement to focus spend on what's working and where it can build the brand over the long term. Third, we drove business expansion through strategic channel development. Our approach remains consistent, elevate the DTC consumer experience while nurturing strategic wholesale partnerships that extend our reach, support the brand and preserve the right level of control. In direct-to-consumer, in the fourth quarter, we've improved execution through stronger merchandising, healthier inventory and better conversion while also tightening how we run the retail business. We are applying greater rigor to improve productivity across our network and actively reviewing the retail portfolio, so that each location meets our return expectations. Our digital channel delivered strong growth in the fourth quarter. Enhancements to product discovery, content and personalization made it easier for customers to find what they were looking for, creating a smoother path from browsing to checkout, further supporting conversion. We continue to improve this channel and are creating a more connected online to in-store shopping experience. In wholesale, the reset we started 3 years ago is complete, and the channel has returned to growth. This reflects better product flow, healthier inventory and stronger sell-through with encouraging reorders for our Fall/Winter 25 assortment and continued momentum into Spring 2026. Bringing Spring/Summer to market earlier only strengthened that demand, and we're pleased with how the channel is progressing. Our fourth imperative is operating efficiently with pace and accountability. In fiscal 2026, we strengthened the organization through targeted investments in people and technology with a clear focus on speeding up productivity and decision-making. That progress supported growth and drove underlying operating leverage in the year. The work that we've done positions us to take the next step, converting our momentum into greater profitability in fiscal 2027. Our focus is to leverage our brand strength and operating foundation to drive sustainable growth, expand margins and improve returns. Our priorities for this year are clear, and we're executing against them with increasing consistency. First, we are deepening brand desire and increasingly translating that into demand through more effective marketing. Second, we're scaling a repeatable product playbook across seasons to drive greater year-round relevance. And third, we're improving channel productivity and capital efficiency to increase conversion and customer value. Fiscal 2026 marked a step change for Canada Goose, and I'm very pleased with how the year has played out. We delivered against our objectives and built real momentum across the business. I want to thank our teams around the world for their creativity and commitment that you've all brought to executing our strategy this year. As we look ahead to fiscal '27, we expect to deliver meaningful profit margin expansion. Canada Goose has always been a strong brand. And now at a larger scale, we're seeing that strength translate into deeper cultural relevance and commercial impact. With the investments we've made and the progress we're delivering, we have a clear path to becoming a more profitable business. And with that, I will turn it over to Neil.

Thanks, Dani, and good morning, everyone. The fourth quarter was a strong finish to fiscal 2026, reflecting solid top line growth and improved execution across the business. I'll walk through our results and how we're translating them into a more profitable profile as we move into fiscal '27. Revenue in the fourth quarter increased 18% year-over-year to $453 million with all channels and regions growing. Full year revenue grew 12%, reaching $1.5 billion for the first time. Turning to channel performance. Q4 DTC revenue increased 16% year-over-year with growth across all regions. Comparable sales growth was 10%, led by strength in e-commerce and was complemented by store performance. Demand was supported by continued resonance of our Fall/Winter 25 collection and early response to our Spring/Summer 26 assortment. For the full year, DTC comparable sales growth was 8%, reflecting more consistent execution across our product, brand and channel initiatives. Wholesale revenue increased 52% year-over-year in the fourth quarter and 9% for the full year, reflecting the continued benefit of the channel reset toward brand-aligned partners and healthier inventory positions. In the quarter, growth was led by EMEA and Asia Pacific, supported by shipments related to our Spring/Summer 26 order book and in-season demand for our Fall/Winter 25 assortment. As we look ahead, our outlook for Fall/Winter 26 wholesale order book continues to reinforce interest in newness across the assortment, which we see as a leading indicator of the improving health and momentum of the channel. Moving to regional trends. In North America, Q4 revenue increased 11% year-over-year, supported by growth in DTC. Comparable sales declined a modest 1% as improved conversion across channels was offset by store traffic pressure, which was concentrated in a small number of high-volume, high tourism, urban locations. Underlying demand and better conversion in our e-commerce channel led to sales growth. Asia Pacific revenue increased 23% year-over-year, driven by growth across DTC and wholesale. Comparable sales grew double digits, led by Mainland China. DTC performance reflected strong traffic, improved store and online conversion and positive response to our Lunar New Year product capsule and associated marketing campaign. Wholesale growth was primarily driven by strong travel retail demand in the region. In EMEA, revenue increased 25%, driven by wholesale growth and continued strength in DTC. DTC comparable sales growth was in the double digits, led by e-commerce. Store performance in the quarter delivered growth with most markets up against continued softness in the U.K. amid uneven traffic trends. We did see some softening in performance towards the end of the quarter, reflecting a more cautious consumer environment as geopolitical tensions increased, particularly impacting inbound travel-related spend and discretionary demand. Let's turn to gross profit. Fourth quarter gross profit increased 15% year-over-year, while gross margin declined 170 basis points to 69.6%. Central to our long-term strategy is expanding our year-round product relevance. In Q4, our Spring/Summer 26 collection was delivered to our channels much earlier than last year, which supported overall growth. Channel mix with a higher proportion of wholesale revenue and higher freight and duty costs given our regional sales mix were further pressure points on gross margin. For the full year, gross margin was relatively flat despite limited pricing benefit, higher freight and duties and the deliberate push into product newness. We offset these pressures through ongoing value chain improvements and strong channel execution, particularly improved comp sales performance. It has been our long-standing track record to balance these headwinds and tailwinds across a number of years, and we are satisfied with the outcome of fiscal '26 with a view to opportunities moving forward. Moving to our expense profile. Total SG&A expenses increased 14% year-over-year to $251 million in the fourth quarter, slower than the 18% growth we experienced in revenue and delivering approximately 50 basis points of operating leverage, adjusting for the impact of the earn-out expense in the prior year, which was excluded from adjusted EBIT. This reflects continued progress on cost discipline and improved efficiency as the business scaled. As part of our ongoing efforts to strengthen our store network, we recorded an $8 million impairment charge this quarter related to select underperforming locations. While this was dilutive in Q4, it reflects a more rigorous approach to assessing store performance. From a channel perspective, DTC operating margin declined 230 basis points year-over-year, largely reflecting the impairment recorded in the fourth quarter. Excluding that charge, underlying DTC operating margin was consistent with Q4 in the prior year, reflecting stable underlying profitability alongside cost efficiency and labor productivity. Wholesale operating margins improved year-over-year, supported by healthier inventory positions and a more focused partner mix. Corporate expenses increased 15% over the same prior year period, driven primarily by an increase in annual incentive compensation, reflecting strong performance against our targets. Excluding this impact, underlying costs remained well controlled, demonstrating discipline in discretionary spend. Marketing costs, which are included in corporate expenses, declined 8% in Q4 versus the same period last year, another source of operating leverage. Earlier and more consistent investment throughout fiscal '26 allowed brand momentum to carry into Q4, leading to strong sales performance despite lower spend year-over-year. Together, this resulted in adjusted EBIT increasing by $5 million year-over-year to $65 million in the fourth quarter, while adjusted EBIT margin declined by 120 basis points to 14.3%. We exited the year with a strong balance sheet. Inventory of $386 million remained relatively flat year-over-year, reflecting strong demand and tighter inventory management with turns improving to 1.2x, up 20% versus last year and 33% versus 2 years ago. Our inventory position continues to get healthier, supported by better planning and a structured approach to managing product life cycle and brand appropriate ways. We are proud of our progress here and believe we can continue to improve this metric. Net debt declined to $383 million from $409 million a year ago, with the net debt leverage ratio remaining flat at 1.3x EBITDA. Overall, we exited fiscal '26 with a robust top line performance, greater operating rigor, healthier inventory and a more efficient cost structure, strengthening the foundation of the business and positioning us to more consistently convert growth into profitability and returns. This gives us confidence in our fiscal '27 plan and our ability to grow revenue and expand margins through focused execution of the product, brand and channel priorities Dani outlined. Let me now walk you through our outlook. For fiscal '27, we expect total revenue to grow approximately low single digits year-over-year. Growth will be driven by improved conversion, pricing actions implemented in April, and more effective execution across product, marketing and channels. We expect growth to be led by DTC across both our stores and e-commerce channels with wholesale also contributing, partially offset by lower other revenue, reflecting healthier inventory in our channels leading to fewer planned friends and family events. At the same time, we are planning for a more challenging macro environment, reflecting softer demand trends exiting fiscal '26 and into April, which we expect will continue to weigh on consumer confidence and travel. On profitability, we expect adjusted EBIT margin to be in the range of 11% to 12% for fiscal '27, reflecting 130 to 230 basis points of margin expansion year-over-year. This improvement is expected to be driven by strong execution across multiple levers in the business with contributions from both gross margin and SG&A. At the gross margin level, we expect improvement driven by favorable channel mix, pricing flow-through and manufacturing and operational efficiencies already embedded in our inventory position. Based on what we see today, this assumes that the tariff environment in fiscal '27 is consistent with fiscal '26. Within SG&A, we expect to deliver operating leverage, balancing investments in our strategic channels with more efficient marketing and tight control of corporate costs. In addition, we expect to benefit from lapping nonrecurring items from fiscal '26, including the bad debt provision related to a U.S. wholesale partner and store impairment charges taken in the fourth quarter. Our strategic channel investments in fiscal '27 include flagship openings in key markets scheduled for fiscal '28 with associated costs flowing through depreciation and amortization. We are also making upgrades to our logistics network in EMEA and e-commerce capabilities with the bulk of the investment expected to be completed in the first half of the fiscal year. Both programs have clearly defined measurable returns with expected benefit this year. As a reminder, approximately 3/4 of our revenue has historically been generated in the second half of the fiscal year, while much of our fixed cost base is incurred more evenly throughout the year. As a result, we expect modest margin pressure in the first half, followed by expansion in the back half as revenue scales into and through our peak selling season in line with historical trends. Taken together, our fiscal '27 outlook reflects a balance of confidence and prudence. We remain focused on driving margin expansion and improving profitability despite a more complex operating environment. In closing, we're proud of what the entire Canada Goose team accomplished in fiscal '26, both in the execution of our strategy and in laying the foundation for durable margin expansion beginning in fiscal '27. We are collectively excited about our plans for this upcoming year and look forward to updating you on our progress. Now operator, you can open up the call for questions.

[Operator Instructions] Your first question comes from the line of Rick Patel with Raymond James.

I wanted to better understand the assumption for guidance that demand will soften in fiscal '27. Does this reflect trends that you're seeing early in the year? Or is there something about the order book that gives you a little bit less confidence? Just trying to understand if it's something currently being felt, or whether it's a conservative view given the volatile macro?

Rick, thanks for your question. It's Neil. I'll start, and then if Carrie wants to jump in on any of the demand trends, she will. So I think let's just start with, we exit Q4 with a lot of wind in our sales, obviously. Top line was very strong across channels, across regions. And so we're certainly feeling good about what the momentum is showing. And obviously, that's not just the last 3 months. There's been strong momentum really here for quite a while. The things that are in our control as we turn the page into '27 are things like pricing, which we've implemented a pricing change now early in our fiscal year. We expect that to be a benefit. We know what our wholesale order book looks like. And as you heard, we had some strong momentum here in the fourth quarter. That also gives us a bit of confidence looking forward. We know we're going to open a handful of new stores. Again, that's a positive. And we've got lots of work left to do on DTC execution. So let's put all of the sort of positives in one box. I think where we see some level of conservatism here is not just in the early part of the fiscal year this year or in the last few weeks of the year. It's a little bit of a broader sense that the macro environment is going to be more challenging than it was a year ago. I don't think we know how much more challenging. And so we want to give ourselves a pretty wide range of outcomes. And our focus, with respect to what the demand is, is doing the things that are within our control. And as I've outlined, there are a number of them, and we feel really good about those.

Got it. And also wanted to better understand the levers that you have around SG&A. So expectations to slow the growth this year. Can you just help us understand where you see room to pull back on the investment spending? And does this play into your expectations for softer revenue as well? Or is that just a macro point of view?

Yes. I'll take that. This is Beth, Rick. We are really proud of what we accomplished in Q4 with regards to EBIT margin expansion. We were laser-focused on delivering that expansion at both the channel and the consolidated level on both aggregate EBIT margins and SG&A. And obviously, if we exclude the store impairments, we did that, and we're really, really proud of that. That was even with some annual costs that disproportionately hit the quarter. So as we look to fiscal '27, we expect that trend to continue, for SG&A growth to remain below revenue growth, supporting that growth in operating leverage. There's really opportunity on a number of different dimensions. Obviously, you've heard us speak about the investment in store labor this year. That investment remains incredibly important, but we can do it smarter, and we can do it in a more directed way at the store level, at the daypart level to really ensure that we're driving optimal labor productivity while still driving that great comp growth momentum. Similarly, marketing. We made a tremendous amount of progress on kind of driving brand heat and energy this year with that marketing, a lot of top-of-funnel investment. That is going to continue. But we can do it smarter. There were some investments made last year that don't need to recur, but the momentum is still there. So we don't view that pullback of investment as something that should at all hamper our ability to drive great comp growth. It's just a matter of focusing more on the ROI and the precision of those investments to drive margin expansion. And then lastly, obviously, we have now for 2 years in a row, delivered really solid operating leverage on our controllable overhead investments. That will continue. We were able to do that this year while simultaneously making important investments in teams like product creation that are pivotal to driving the product evolution you've seen. So we'll continue those investments in a judicious way, but continue driving the control in the rest of the cost bar to drive controllable leverage. So overall, we feel we've got a number of really strong levers available to help drive against the margin expansion goals you heard Dani and Neil speak about.

Your next question comes from the line of Oliver Chen with TD Cowen.

As we think about the guidance for revenue growth, what are your thoughts in terms of North America relative to Asia and the trends that you're seeing relative to how you're guiding, and what we should expect given that there's different footprints and different traffic and conversion considerations? And then, Dani, as you mentioned repeatable product, would love your thoughts on that relative to all the momentum you're seeing with new and apparel and the latest in terms of the customers you're obtaining from the newer lifestyle product as well. And third and final, on marketing, how should we think about marketing as a percentage of sales or the dollar amount or anything we should know on potential shifts or what you're anniversarying as we look ahead to next year? The demand creation is important, and I'm sure you're balancing the marketing spend relative to revenue growth.

Oliver, thanks for your questions. I'll start with the guidance question, and then we'll rotate on the other answers. So in terms of the market health and sort of what we're seeing today, both through the fourth quarter and where we exit the year, we're expecting to have growth in all markets and in all channels. And so we feel like we've got the right mix. I mean, certainly, the fourth quarter results in both Europe and Asia were stronger than they were in North America, as you heard, but we did see growth in each of those regions. We're focused a little bit on the impact of what's going on in the Middle East, in Europe, in particular, where there's been much less inbound traffic. And that's a market where we have historically had good levels of inbound traffic and luxury purchasing from places outside of Europe. And so that's an area where store traffic remains under pressure. And we've got the ability to compensate for that with a really healthy e-commerce channel. I think the North American traffic trends are fine. Probably like to see those a little bit healthier. And so as we enter fiscal '27, some of the caution there is really about, is the traffic in the store -- how much of the traffic in the store can we maintain? And to the extent that's pressured, can we offset that with the conversion improvements that we've seen now over the last 18 months. Asia, generally speaking, remains pretty healthy. And so I guess we'd say, as we said a few minutes ago, a lot of tools in the toolkit here to drive revenue, but we're monitoring sort of the macro environment and the health of the consumer in each of those markets and reacting accordingly.

Yes. Thanks, Neil, and thanks, Oliver. Talking about product, we've really invested a lot into our product creation, product development engine, and over the past few years, I'm really happy with where we are at the current moment. We are in a place where we are able to create beautiful and desirable products at the right margin and at the right price point for our consumers. And when we're able to do that. Our consumers have always wanted to buy best products from us. And it continues to drive our customers into our stores and online, across all seasons, all products, and all categories. These days, our fastest-growing category is apparel, and in the category spring products and new apparel products are performing extremely well. And we're very happy about that, and we're going to continue to grow into those categories. And while at the same time, we continue to hold our strength in our core outerwear products. So overall, our product inflection is strong. It's getting better, and I'm very, very confident in the trajectory that we're on with regards to our product creation.

I'll take -- actually, I'll pick up on the product, Oliver. The newness that Dani is talking about, I think when you walk into our stores or when you go visit us online, it's a very different feel. There's energy, there's different color palettes, that is obviously a direct influence for buyer looking at -- Spring '26 was this first mainline collection that you ever saw. And so when you look at the results in Q4, that newness isn't just about great product or driving incremental sales, it's also about giving us more stories to connect our consumer with. So when you got great product, then you see the marketing, the marketing just works so much better. And so your question around, how we think about that as a percentage of sales this year? It's going to be lower. You already saw that in Q4, and it's continued to drive momentum from a brand perspective, from a traffic perspective, from a conversion perspective. So great product. Then you have the great marketing. We've got to tell amazing new stories to people, and it's working. And so that momentum continues. Of course, our goal, and we heard Beth talk about this, is about efficiency, right? We tried a lot of things. We had some investments last year that we don't need to repeat, whether that's reshooting our catalog. So as we test new channels, as we test new things, we want to be able to make sure that we're measuring it with different tools. There's a more rigorous focus on what that return is from that marketing activity. So even though it's a lower percentage of sales, it doesn't mean we're stepping back at all from that momentum that we've already built.

Great job on the new product. Best regards.

Thanks, Oliver.

Your next question comes from the line of Ike Boruchow with Wells Fargo.

I think, Neil, 2 questions for me. On the DTC outlook you guys have, can you -- what's embedded on store growth? What's your underlying comp assumption, at least on an annual basis? Could you give us a little bit more variables into what underpins that?

Yes. I think on both of those, Ike, there's, I think, both positivity embedded in the outlook, but we haven't given real precision on either comp growth. We expect that the momentum that we've had now 5 quarters sets the standard that we expect to have positive comp growth. That's the goal for us. And then on new stores, we've got a range of outcomes here. I think in the last 12 months, we were something like high single digits, and we would expect to be sort of not that far removed from that, but we're going to continue to evaluate opportunities as the year goes. So without getting too precise, that will give you a little bit of flavor for those 2 inputs.

Okay. And then just trying to make sure the Street numbers kind of align to what you're thinking as best we can. Understanding the revenue mix you kind of gave, which makes sense seasonally. Can you help us out a little bit more with the earnings? I know you said some deleverage in the first half versus leverage in the back half, but can you go beyond that? I mean if you look at the margin guide for the year, I think that's like $175 million to $185 million of EBIT. Could you maybe say how much of a loss you're expecting in the first half versus a gain in the back half? Just something to help us get the models tight again. I feel like you guys have come out the last couple of quarters and had a really good revenue and then you're off versus the Street on the bottom line. I'm just trying to help that scenario kind of come to an end.

Yes. I certainly appreciate where you're trying to go. I think our objective here is to provide clarity over the year, and we feel like we've got a really good plan over the next 12 months and obviously now 11 months. The seasonality of the business has not changed that much. We're still highly dependent on executing from sort of the September through February time frame, which mostly straddles the third and fourth quarter. As you know, that's where all of the profit comes over that period of time. And so we will run a loss for the first half of the year as we have historically and then drive towards expansion -- or drive towards profitability in the second half and ultimately, margin expansion. So without giving too much color on the kind of quarterly splits, our focus is really on how do we deliver the year.

Your next question comes from the line of Michael Binetti with Evercore ISI.

I want to just double-click on that a little bit. I'm a little confused with low single-digit revenue growth in total with pricing in place, store growth and expected same-store sales growth, and wholesale expected to be positive. It feels like there's a take that we're missing there to get to low single-digit growth. If you could just help me round out what I might be missing there? And then would you mind just helping us think through SG&A. Last year -- I can hear the focus on this call, but last year, I think we started guiding it to single-digit growth that actualized at 19%. Can you just help us break down -- I know you mentioned 2 onetime items, the bad debt and the impairment. How that evolved through the year, excluding those items and where the composition of the SG&A growth through the year and where the delta was, please? We didn't have the revenue guidance last year to go on. So it's very hard to tell how much of that SG&A moved higher on variable costs tied to sales that might have been ahead of your plan versus -- since we didn't have a sales guide last year.

Sure. So I'll help with the math on the first part of the question, Michael, and then Beth can pick up some of the SG&A profiling over the last 12 months. So I think there's an element that we've not yet talked about, which is we are not expecting to -- we're expecting to have lower sales in the other channel than we did a year ago. And so that will certainly result in some reduction of revenue in that area, which will reduce the benefits that we were talking about in the other areas. I think we're also -- as we're saying here, like we have a degree of uncertainty. And so while our plans are to drive against all of those positives, wholesale order book growth, same-store sales, pricing, et cetera, we know that for sure, we're going to be facing into -- or we are facing into a tougher environment, and we want to make sure that we respect what that might bring. And obviously, if that assumption isn't correct, then we'll update as we go.

And Michael, on your question on the SG&A profile and margin profile in the full year, if you step back, there's really 3 categories: driving core structural margin expansion. Second, making intentional investments to really cement that comp growth flywheel. And then third, some one-timers. So maybe I'll go kind of in reverse order. The one-timers, as you talked about, were really twofold. The wholesale bad debt expense that we took in Q3 and the impairment in Q4, those were $16 million and $8 million, respectively. So about 150 basis points of margin pressure from those 2 one-timers. Those are nonrecurring. We will get the tailwind from those back in the back half of next year, pretty straightforward. The intentional investments were really focused on 3 things: marketing, store labor, and product creation. Those show up in different places, some on the channel P&L, some on consolidated P&L. But we planned to make at the beginning of the year, while we didn't guide, we obviously communicated the intention to invest in those. That was critically important to really get the conversion engine in the store that we had seen excellent green shoots on in the back half of the prior year to get that really consistently executing day in, day out. We've got that going now. So next year, we can shift the store labor focus to be a bit more about productivity. Still keep that conversion engine going, still use it to drive comp growth, all that, but can do it a bit more efficiently. Similarly, marketing, we've obviously touched on already, but same idea, critical investments really help fuel brand heat, really help tell the product story, the brand story. The same will continue next year, just in a slightly more efficient way. And then the product creation investments, those have already started to kind of stabilize and get some leverage as the product flywheel that you heard Dani described has taken root, and you see that show up in the pricing power we believe we have this year, for example, that we can fund some of those investments through the gross margin expansion. So those were intentional investments. They continue to remain important areas of spending for us, but will just be much more efficient next year, and we believe can be more efficient without a corresponding kind of decline in the top line. And then when you back all that out, which we appreciate we haven't given you exactly quantification to back all that out, there is core fundamental structural margin expansion happening underneath there. And that's what excites us about the margin potential for fiscal '27 and beyond is continuing the structural margin expansion, get greater efficiency out of those intentional investments, get rid of those one-timers that added some noise and some pressure, and all that can add together to a nice margin expansion profile for next year and hopefully for many years beyond.

Your next question comes from the line of Jay Sole with UBS.

Great. Just to follow up a little bit on those thoughts. The companies continue to focus on retail productivity. Can you just talk a little bit about what you plan on doing this year to drive further productivity? I mean, how you feel like the store teams performed this year relative to what you expected? A little detail there would be super helpful. And any sort of financial implication of that?

Yes. Thanks for the question, Jay. It's Carrie. So we're very proud, as we've talked about before, of what the teams in store has been able to do in terms of conversion. And again, it's a lot of things working, right? Great product, making sure it's in the right places at the right times. So there's a lot of focus from shoppers on buy now, wear now. So us being able to pull up Spring in Q4, having a dedicated Lunar New Year capsule in APAC that worked really well. So there's lots of reasons for people to be shopping and ability for our teams to convert. The focus on conversion is not going to change, right? So we saw the results of that in Q4. We saw it all year, driving that comp. What Beth just talked about is that labor agility, getting that dialed perfectly -- perfect is maybe a lofty goal, but we're going to try as hard as we can to make sure that we're meeting the traffic -- meeting the labor when the traffic is there. And just being more flexible. I think one of the things that we have learned over the last year is the flexibility, how do we build that into the system? How do we look ahead a little bit more rigorously? How do we plan scenarios a little more in advance, so that we can switch that dial as we need to. So the other part of that is more training. We invested a ton in our -- from our retail team in terms of product training, experience training. Again, for us, when you walk into a store, we don't want people to just feel like it's a transactional business, it's an experiential brand. We want people to feel that Canadian warmth, that distinctly Canada Goose offering. And so of course, we want to drive revenue, but we also want it to be an amazing experience, so that people come back again and again. And that is what we're seeing, right? We talked about the investment in marketing driving not only new customers, but repeat customers. So all of those things working together, we have to continue doing that with just a greater focus on efficiency and productivity.

I think from a financial perspective, the connection is pretty tight. I mean, at the top line, you can see, over the year, high single digits of comp store growth or rather DTC comp growth. And that's translated directly into the productivity per square foot. We've always said $4,000 a square foot is kind of where we need to be. We're over that hurdle this year after a few years sort of trending a little bit below that. And so that translation is obviously meaningful. We've spent time over the last 12 months talking about how we balance the labor investment against the conversion outcomes. Carrie just touched on it, an area where we're going to continue to monitor the dials, but we know that the connection between those 2 is tight, and having that conversion lift, which leads to the productivity and comp sales has been a really powerful unlock for us over here over the last several months.

Your next question comes from the line of Jonathan Komp with Baird.

This is Alex Conway on for John. I just first wanted to follow up on something you said, Carrie, about not needing to repeat some of the marketing investments you made last year this year. I'm just curious like when you look at what worked and what didn't over the past year, what do you kind of find and what investments are you kind of carrying forward into this year? And what are the ones that you don't really need to repeat?

Yes, great question. I think it's more fundamental. When we have a new look and feel, you're going to reshoot the way we look online. And so it's just making sure that what we're showing represents the brand and the evolution and the elevation of our brand. So that -- we saw a lot of our iconic catalog in a different way. And so that's something that doesn't need to be repeated. What does need to be repeated, and we talked about, is our strategy hasn't changed. So we are still investing in upper funnel, right? We have a brand. Investing in that brand, making sure it reaches the right people, at the right time in any number of channels, and we tested a lot and just tested in different ways. That needs to repeat, and we will continue to do that. The focus, as I said before, is just about making sure we're measuring it in different ways, making sure we're seeing that ROAS. We already are starting to see that. We just need to make sure that every dollar we spend has a really strong ROI, whether that's in brand heat, building desires, taking market share and/or converting, ideally both. So not a massive change in strategy. I don't want you to walk away thinking we're doing something differently. It's just more rigorous focus on the delivery of where we spend.

Great. And then I don't think you provided a store opening guidance, but just any color there on amount, timing, like where you're looking across regions the most?

Yes. Thanks, Alex. No, we've not provided any precision around how many stores we plan to open, when or where, aside from -- we think that balancing comps against, as we've said a lot, the comp performance against where the store investments are and how many of them we can accommodate is kind of a critical balance. We're going to continue to use that as a guiding principle for store investments. We will open stores this year, and we expect that they will be positive contributors certainly to our top line, but we'll just have to update you as we go on when and where.

[Operator Instructions] Your next question comes from the line of Angus Kelleher with Barclays.

This is Angus Kelleher on for Adrienne. On the earlier wholesale shipments, can you help quantify how much of the full year guide is impacted by timing-related pull forward? And then how much of the Spring/Summer pull forward was better underlying demand, particularly in non-down and apparel categories. And then I have a follow-up.

Sure. Yes, thanks for the question, Angus. It's a good point to clarify. So we would not consider any of this to be a pull forward. This was very much by design. We have product ready for spring now earlier and that shipped earlier. The size of that order book is larger than it was a year ago, reflecting, as Dani talked a lot about the newness, the relative acceptance by our wholesale customers of product, the excitement that comes with that, them wanting to have Canada Goose in their stores in greater depth at more times of the year. And so we do not anticipate that the fiscal '27 guide is impacted whatsoever by that. We know how much of the order book was expected to be delivered in Q4 and how much was delivered and what we expect to see in our first quarter and through the balance of spring, just to be really clear about that.

On the product category, so really, I mean, wholesale in general -- I'll just give you a little more color on the product categories. And it's really, they're responding in the same way that consumers are responding to the expansion, right? The relevance of a buy now, wear now consumer expanding -- while not diluting our core, but expanding into more seasonal opportunities for people to put us in their closet or wear us in a different season is really working. So wholesale partners have seen that change as well. We're getting some very strong feedback from them on apparel, whether it's lighter weight categories of outerwear, whether it's everyday, whether it's T-shirts and fleece, there really is strong demand. In addition, not just from a category perspective, but again, this whole evolution of brighter colors, more energy, more enthusiasm, they're seeing that elevation come through and the demand for that product is great. So we're very happy with how that order book is shaping up. It's in line with where we're growing as a business.

Great. And then just on input costs. Can you provide more color on what input costs are changing, including any freight surcharges you're seeing currently and what you have embedded in the fiscal '27 cost structure regarding increases in freight and broader input costs? And also just to say thank you for providing guidance.

You're welcome. On input costs, obviously, there is a lot of uncertainty right now on how ongoing geopolitical conflicts will impact really 2 things: freight charges and freight availability as well as raw materials and input costs. We have petroleum exposure in some of our fabrics, for example. So we are continually monitoring that with our supply base and have incorporated an assumption of some pressure on that into the guide. But that said, we have a tremendous amount of execution opportunity across all of the cost elements that hit COGS. We are driving significant manufacturing productivity improvement year-over-year, significant sourcing improvements. The investments we've been making in product creation include investments in kind of how we manufacture and how we source, and we believe there is productivity that can be driven in those that hopefully, we can use to help offset any structural kind of macro pressure on some of those input costs. Some of those, we have a lot of confidence in, because we're already seeing them show up in our cash product creation costs, but they're just not yet hitting the P&L due to the nature of how we capitalize inventory. But lots of execution levers we can and are pulling, but albeit in an uncertain macro environment with regards to input costs and freight.

There are no further questions at this time. I will now turn the call back to Ana Raman, VP of Investor Relations, for closing remarks.

Well, thanks, everyone, for joining the call and for all your questions. We look forward to connecting with you in the coming weeks.

This concludes today's call. Thank you for attending. You may now disconnect.