Document

 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
FORM 6-K
 
 
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13A-16 OR 15D-16
OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the month of August, 2021
 
Commission File Number: 001-38027
 
CANADA GOOSE HOLDINGS INC.
(Translation of registrant’s name into English)
 
250 Bowie Ave
Toronto, Ontario, Canada
(Address of principal executive office)
 
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
Form 20-F Form 40-F
 
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):                   
 
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):                     




EXHIBIT INDEX

Exhibits 99.1 and 99.2 to this report of a Foreign Private Issuer on Form 6-K are deemed filed for all purposes under the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended.  
 
Exhibit
No.
 Description
99.1 
99.2
99.3
99.4
99.5
 





SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Canada Goose Holdings Inc.
 
   
 By: /s/ Jonathan Sinclair
 Name: Jonathan Sinclair
 Title: Executive Vice President and Chief Financial Officer
Date: August 11, 2021  
 


Document

    







Canada Goose Holdings Inc.
Condensed Consolidated Interim Financial Statements
As at and for the first quarter ended
June 27, 2021 and June 28, 2020
(Unaudited)







Condensed Consolidated Interim Statements of Loss and Comprehensive Loss
(unaudited)
(in millions of Canadian dollars, except per share amounts)
First quarter ended
 NotesJune 27,
2021
June 28,
2020
$$
Revenue356.3 26.1 
Cost of sales625.6 21.3 
Gross profit30.7 4.8 
Selling, general & administrative expenses71.6 48.6 
Depreciation and amortization19.8 15.5 
Operating loss(60.7)(59.3)
Net interest, finance and other costs1016.5 6.7 
Loss before income taxes(77.2)(66.0)
Income tax recovery(20.5)(15.9)
Net loss(56.7)(50.1)
Other comprehensive (loss) income
Items that may be reclassified to earnings, net of tax:
Cumulative translation adjustment loss(1.9)(1.6)
Net gain on derivatives designated as cash flow hedges150.1 0.1 
Reclassification of net loss on cash flow hedges to income150.1 1.9 
Net gain on derivatives designated as a net investment hedge15— 1.6 
Other comprehensive (loss) income(1.7)2.0 
Comprehensive loss(58.4)(48.1)
Loss per share
Basic and diluted4$(0.51)$(0.46)
The accompanying notes to the condensed consolidated interim financial statements are an integral part of these financial statements.

Canada Goose Holdings Inc.
Page 1 of 27


Condensed Consolidated Interim Statements of Financial Position
(unaudited)
(in millions of Canadian dollars)
NotesJune 27,
2021
June 28,
2020
March 28,
2021
Assets $$ $
Current assets
Cash305.9 160.1 477.9 
Trade receivables539.2 28.2 40.9 
Inventories6404.5 428.6 342.3 
Income taxes receivable6.6 11.9 4.8 
Other current assets1434.4 40.6 31.0 
Total current assets790.6 669.4 896.9 
Deferred income taxes60.1 53.5 46.9 
Property, plant and equipment119.9 115.0 116.5 
Intangible assets155.5 159.5 155.0 
Right-of-use assets7240.8 211.7 233.7 
Goodwill53.1 53.1 53.1 
Other long-term assets144.4 2.2 5.1 
Total assets1,424.4 1,264.4 1,507.2 
Liabilities
Current liabilities
Accounts payable and accrued liabilities8, 14149.6 134.8 177.8 
Provisions913.4 10.8 20.0 
Income taxes payable10.4 11.7 19.1 
Short-term borrowings1010.9 2.6 — 
Current portion of lease liabilities749.6 37.8 45.2 
Total current liabilities233.9 197.7 262.1 
Provisions925.4 21.8 25.6 
Deferred income taxes14.2 13.1 21.6 
Revolving facility10— 207.9 — 
Term loan10363.2 154.6 367.8 
Lease liabilities7214.7 190.9 209.6 
Other long-term liabilities1427.6 4.2 20.4 
Total liabilities879.0 790.2 907.1 
Shareholders' equity11545.4 474.2 600.1 
Total liabilities and shareholders' equity1,424.4 1,264.4 1,507.2 
The accompanying notes to the condensed consolidated interim financial statements are an integral part of these financial statements.

Canada Goose Holdings Inc.
Page 2 of 27


Condensed Consolidated Interim Statements of Changes in Shareholders' Equity
(unaudited)    
(in millions of Canadian dollars)
Share capitalContributed surplusRetained earningsAccumulated other comprehensive income (loss)Total
NotesMultiple voting sharesSubordinate voting sharesTotal
 $ $ $ $ $ $ $
Balance at March 28, 20211.4 119.1 120.5 25.2 459.6 (5.2)600.1 
Exercise of stock options11— 2.7 2.7 (1.5)— — 1.2 
Net loss— — — — (56.7)— (56.7)
Other comprehensive loss— — — — — (1.7)(1.7)
Share-based payment12— — — 2.7 — — 2.7 
Deferred tax on share-based payment— — — (0.2)— — (0.2)
Balance at June 27, 20211.4 121.8 123.2 26.2 402.9 (6.9)545.4 
Balance at March 29, 20201.4 113.3 114.7 15.7 389.4 0.4 520.2 
Exercise of stock options11— 0.4 0.4 (0.1)— — 0.3 
Net loss— — — — (50.1)— (50.1)
Other comprehensive income— — — — — 2.0 2.0 
Share-based payment12— — — 1.8 — — 1.8 
Balance at June 28, 20201.4 113.7 115.1 17.4 339.3 2.4 474.2 
The accompanying notes to the condensed consolidated interim financial statements are an integral part of these financial statements.


Canada Goose Holdings Inc.
Page 3 of 27


Condensed Consolidated Interim Statements of Cash Flows
(unaudited)
(in millions of Canadian dollars)
First quarter ended
NotesJune 27,
2021
June 28,
2020
 $ $
Operating activities
Net loss(56.7)(50.1)
Items not affecting cash:
Depreciation and amortization23.5 18.8 
Income tax recovery(20.5)(15.9)
Interest expense106.6 4.8 
Foreign exchange loss5.5 0.9 
Acceleration of unamortized costs on debt extinguishment109.5 — 
Loss on disposal of assets— 0.1 
Share-based payment122.7 1.8 
(29.4)(39.6)
Changes in non-cash operating items16(106.9)(24.4)
Income taxes paid(11.1)(1.4)
Interest paid(7.1)(4.4)
Net cash used in operating activities(154.5)(69.8)
Investing activities
Purchase of property, plant and equipment(6.0)(4.0)
Investment in intangible assets(0.9)(0.8)
Initial direct costs of right-of-use assets7(0.4)— 
Net cash used in investing activities(7.3)(4.8)
Financing activities
Mainland China Facility borrowings107.2 2.6 
Term loan repayments10(0.9)— 
Revolving facility borrowings10— 209.5 
Transaction costs on financing activities10(1.0)(0.3)
Principal paid on lease liabilities7(9.9)(8.6)
Exercise of stock options 121.2 0.3 
Net cash (used in) from financing activities(3.4)203.5 
Effects of foreign currency exchange rate changes on cash(6.8)(0.5)
(Decrease) increase in cash(172.0)128.4 
Cash, beginning of period477.9 31.7 
Cash, end of period305.9 160.1 
The accompanying notes to the condensed consolidated interim financial statements are an integral part of these financial statements.

Canada Goose Holdings Inc.
Page 4 of 27


Notes to the Condensed Consolidated Interim Financial Statements
(unaudited)
Note 1.     The Company
Organization
Canada Goose Holdings Inc. and its subsidiaries (the “Company”) design, manufacture, and sell performance luxury apparel for men, women, youth, children, and babies. The Company’s apparel collections include various styles of parkas, lightweight down jackets, rainwear, windwear, knitwear, footwear, and accessories for the fall, winter, and spring seasons. The Company’s head office is located at 250 Bowie Avenue, Toronto, Canada M6E 4Y2. The use of the terms “Canada Goose”, “we”, and “our” throughout these notes to the condensed consolidated interim financial statements ("Interim Financial Statements") refer to the Company.
Canada Goose is a public company listed on the Toronto Stock Exchange and the New York Stock Exchange under the trading symbol “GOOS”. The principal shareholders of the Company are investment funds advised by Bain Capital LP and its affiliates (“Bain Capital”), and DTR LLC ("DTR"), an entity indirectly controlled by the President and Chief Executive Officer of the Company. The principal shareholders hold multiple voting shares representing 46.1% of the total shares outstanding as at June 27, 2021, or 89.5% of the combined voting power of the total voting shares outstanding. Subordinate voting shares that trade on public markets represent 53.9% of the total shares outstanding as at June 27, 2021, or 10.5% of the combined voting power of the total voting shares outstanding.
Statement of compliance
The Interim Financial Statements are prepared in accordance with International Accounting Standard (“IAS”) 34, Interim Financial Reporting, as issued by the International Accounting Standards Board (“IASB”). Certain information, which is considered material to the understanding of the Interim Financial Statements and is normally included in the annual financial statements prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the IASB, is not provided in these notes. These Interim Financial Statements should be read in conjunction with the Company's Annual Financial Statements.
The Interim Financial Statements were authorized for issuance in accordance with a resolution of the Company’s Board of Directors on August 10, 2021.
Seasonality
Our business is seasonal, and we have historically realized a significant portion of our Wholesale revenue and operating income in the second and third quarters of the fiscal year and Direct-to-Consumer ("DTC") revenue and operating income in the third and fourth quarters of the fiscal year. Thus, lower-than-expected revenue in these periods could have an adverse impact on our annual operating results.
Cash flows from operating activities are typically highest in the third and fourth quarters of the fiscal year due to revenue from the DTC segment and the collection of trade receivables from Wholesale revenue earlier in the year. Working capital requirements typically increase as inventory builds. Borrowings have historically increased in the first and second quarters and been repaid in the third quarter of the fiscal year.


Canada Goose Holdings Inc.
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Notes to the Condensed Consolidated Interim Financial Statements
(unaudited)
Note 2.    Significant accounting policies and critical accounting estimates and judgments
Basis of presentation
The significant accounting policies and critical accounting estimates and judgments as disclosed in the Company’s March 28, 2021 annual consolidated financial statements have been applied consistently in the preparation of these Interim Financial Statements except as noted below. The Interim Financial Statements are presented in Canadian dollars, the Company’s functional and presentation currency.
The Company's fiscal year is a 52 or 53-week reporting cycle with the fiscal year ending on the Sunday closest to March 31. Each fiscal quarter is 13 weeks. The additional week in a 53-week fiscal year is added to the third quarter. Fiscal 2022 is the first 53-week fiscal year, ending on April 3, 2022.
Certain comparative figures have been reclassified to conform with the current year presentation.
COVID-19 pandemic
Globally, public health officials have imposed restrictions and recommended precautions to mitigate the spread of the novel coronavirus pandemic ("COVID-19"), resulting in temporary closures of our retail locations as well as reduced traffic and store productivity, similarly impacting our wholesale partners. Across our global store network, approximately 20% of total trading days were lost to temporary closures in the first quarter of fiscal 2022, compared to approximately 60% in the comparative quarter. We have also experienced a significant reduction in the capacity of our network, including our manufacturing facilities, due to distancing measures. All our manufacturing facilities were operating as at June 27, 2021 at lower output levels than historically realized to ensure appropriate distancing measures were in place.
In March 2021, the IASB issued an amendment to IFRS 16, Leases to extend the period over which the practical expedient is available for use. This amendment exempts lessees from determining whether COVID-19 related rent concessions for lease payments originally due on or before June 30, 2022 are lease modifications. The amendment is effective for annual reporting periods beginning on or after April 1, 2021 and earlier application is permitted. In accordance with the guidance issued, the Company adopted the amendment effective March 29, 2021 and elected not to treat COVID-19 related rent concessions as lease modifications. Rent concessions of $0.2m were recognized in the statement of loss for the first quarter ended June 27, 2021 (first quarter ended June 28, 2020 - $0.7m), and the Company will consider seeking further rent concessions as it continues to monitor the impact of COVID-19.
As a result of the temporary store closures, net costs of $0.2m were recognized in selling, general & administrative (“SG&A”) expenses, depreciation and amortization, and interest during the first quarter ended June 27, 2021 (first quarter ended June 28, 2020 - $6.7m).
Management assessed whether indicators of impairment existed as at June 27, 2021 in accordance with IAS 36, Impairment of Assets, and no indicators were identified.
Principles of consolidation
The Interim Financial Statements include the accounts of the Company and its subsidiaries. All intercompany transactions and balances have been eliminated.

Canada Goose Holdings Inc.
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Notes to the Condensed Consolidated Interim Financial Statements
(unaudited)
Operating segments
The Company classifies its business in three operating and reportable segments: DTC, Wholesale, and Other. The DTC segment comprises sales through country-specific e-Commerce platforms and its Company-operated retail stores located in luxury shopping locations.
The Wholesale segment comprises sales made to a mix of retailers and international distributors, who are partners that have exclusive rights to an entire market.
The Other segment comprises sales and costs not directly allocated to the DTC or Wholesale channels, such as sales to employees and SG&A expenses. The Other segment includes the cost of marketing expenditures to build brand awareness across all segments, corporate costs in support of manufacturing operations, other corporate costs, and foreign exchange gains and losses not specifically associated with DTC or Wholesale segment operations.
Within the Other segment, comparative information also includes sales of personal protective equipment ("PPE") in response to COVID-19 along with costs incurred as a consequence of the COVID-19 pandemic including overhead costs resulting from the temporary closure of our manufacturing facilities.
Standards issued and not yet adopted
Certain new standards, amendments, and interpretations to existing IFRS standards have been published but are not yet effective and have not been adopted early by the Company. Management anticipates that pronouncements will be adopted in the Company’s accounting policy for the first period beginning after the effective date of the pronouncement. Information on new standards, amendments, and interpretations is provided below.
In January 2020, the IASB issued an amendment to IAS 1, Presentation of Financial Statements to clarify its requirements for the presentation of liabilities in the statement of financial position. The limited scope amendment affected only the presentation of liabilities in the statement of financial position and not the amount or timing of its recognition. The amendment clarified that the classification of liabilities as current or non-current is based on rights that are in existence at the end of the reporting period and specified that classification is unaffected by expectations about whether an entity will exercise its right to defer settlement of a liability. It also introduced a definition of ‘settlement’ to make clear that settlement refers to the transfer to the counterparty of cash, equity instruments, other assets or services. The amendment is effective for annual reporting periods beginning on or after January 1, 2023. Earlier application is permitted. The Company is assessing the potential impact of the amendment.
In August 2020, the IASB issued “Interest Rate Benchmark Reform – Phase II (amendments to IFRS 9, Financial Instruments; IFRS 7, Financial Instruments: Disclosures; IAS 39, Financial Instruments: Recognition and Measurement; IFRS 4, Insurance Contracts and IFRS 16, Leases)”, which addresses issues that affect financial reporting once an existing benchmark rate is replaced with an alternative rate and provides specific disclosure requirements. The amendment is effective for annual reporting periods beginning on or after January 1, 2021. Earlier application is permitted. The Company is assessing the potential impact of the amendment.

Canada Goose Holdings Inc.
Page 7 of 27


Notes to the Condensed Consolidated Interim Financial Statements
(unaudited)
Note 3.    Segment information
The Company has three reportable operating segments: DTC, Wholesale, and Other. The Company measures each reportable operating segment’s performance based on revenue and segment operating (loss) income, which is the profit metric utilized by the Company's chief operating decision maker, the President and Chief Executive Officer, for assessing the performance of operating segments.
In the first quarter of fiscal 2022, a customer in the Wholesale segment represented 16.6% of total consolidated revenue (June 28, 2020 - 24.9%).
The Company does not report total assets or total liabilities based on its reportable operating segments.
First quarter ended June 27, 2021
(in millions of Canadian dollars)DTCWholesaleOtherTotal
 $ $ $ $
Revenue29.4 25.8 1.1 56.3 
Cost of sales8.0 16.7 0.9 25.6 
Gross profit 21.4 9.1 0.2 30.7 
SG&A expenses15.3 7.9 48.4 71.6 
Depreciation and amortization15.2 1.0 3.6 19.8 
Operating (loss) income(9.1)0.2 (51.8)(60.7)
Net interest, finance and other costs16.5 
Loss before income taxes(77.2)
First quarter ended June 28, 2020
(in millions of Canadian dollars)DTCWholesaleOtherTotal
 $ $ $ $
Revenue10.4 8.7 7.0 26.1 
Cost of sales1.8 7.2 12.3 21.3 
Gross profit (loss)8.6 1.5 (5.3)4.8 
SG&A expenses9.6 7.8 31.2 48.6 
Depreciation and amortization11.2 0.9 3.4 15.5 
Operating loss(12.2)(7.2)(39.9)(59.3)
Net interest, finance and other costs6.7 
Loss before income taxes(66.0)

Canada Goose Holdings Inc.
Page 8 of 27


Notes to the Condensed Consolidated Interim Financial Statements
(unaudited)
Geographic information
The Company determines the geographic location of revenue based on the location of its customers.
First quarter ended
(in millions of Canadian dollars)June 27,
2021
June 28,
2020
$$
Canada10.4 11.6 
United States9.1 2.5 
Asia Pacific22.4 10.0 
EMEA(1)
14.4 2.0 
Revenue56.3 26.1 
(1)EMEA comprises Europe, the Middle East, Africa, and Latin America.
Note 4.     Earnings per share
The following table presents details for the calculation of basic and diluted earnings per share:
First quarter ended
(in millions of Canadian dollars, except share and per share amounts)June 27,
2021
June 28,
2020
Net loss$(56.7)$(50.1)
Weighted average number of multiple and subordinate voting shares outstanding(1)
110,504,248 110,080,288 
Loss per share
Basic and diluted$(0.51)$(0.46)
(1)    Subordinate voting shares issuable on exercise of stock options are not treated as dilutive if including them would decrease the loss per share. Accordingly, 967,328 potentially dilutive shares have been excluded from the calculation of diluted loss per share for the first quarter ended June 27, 2021 (first quarter ended June 28, 2020 - 712,699 shares).


Canada Goose Holdings Inc.
Page 9 of 27


Notes to the Condensed Consolidated Interim Financial Statements
(unaudited)
Note 5.    Trade receivables
(in millions of Canadian dollars)June 27,
2021
June 28,
2020
March 28,
2021
 $ $ $
Trade accounts receivable17.4 14.5 21.9 
Credit card receivables1.8 0.1 2.1 
Government grant receivable0.1 3.3 4.4 
Other receivables21.0 11.8 14.3 
40.3 29.7 42.7 
Less: expected credit loss and sales allowances(1.1)(1.5)(1.8)
Trade receivables, net39.2 28.2 40.9 
Note 6.     Inventories
(in millions of Canadian dollars)June 27,
2021
June 28,
2020
March 28,
2021
 $ $ $
Raw materials70.6 71.4 63.8 
Work in progress17.1 18.0 18.6 
Finished goods316.8 339.2 259.9 
Total inventories at the lower of cost and net realizable value404.5 428.6 342.3 
Inventories are written down to net realizable value when the cost of inventories is estimated to be unrecoverable due to obsolescence, damage, or declining rate of sale. As at June 27, 2021, total write-downs amounted to $23.1m (June 28, 2020 - $19.2m, March 28, 2021 - $23.4m).
Amounts charged to cost of sales comprise the following:
First quarter ended
(in millions of Canadian dollars)June 27,
2021
June 28,
2020
 $ $
Cost of goods manufactured21.9 18.0 
Depreciation and amortization3.7 3.3 
25.6 21.3 

Canada Goose Holdings Inc.
Page 10 of 27


Notes to the Condensed Consolidated Interim Financial Statements
(unaudited)
Note 7.    Leases
Right-of-use assets
The following table presents changes in the cost and the accumulated depreciation of the Company’s right-of-use assets:
(in millions of Canadian dollars)Retail storesManufacturing facilitiesOtherTotal
Cost$$$$
March 28, 2021253.3 36.7 18.4 308.4 
Additions20.9 — 0.4 21.3 
Lease modifications1.6 — — 1.6 
Impact of foreign currency translation(3.5)— (0.2)(3.7)
June 27, 2021272.3 36.7 18.6 327.6 
March 29, 2020191.5 36.6 18.0 246.1 
Additions10.9 — 3.0 13.9 
Lease modifications— — (1.5)(1.5)
Impact of foreign currency translation(3.2)— (0.3)(3.5)
June 28, 2020199.2 36.6 19.2 255.0 
(in millions of Canadian dollars)Retail storesManufacturing facilitiesOtherTotal
Accumulated depreciation$$$$
March 28, 202158.8 9.9 6.0 74.7 
Depreciation10.7 1.3 1.0 13.0 
Impact of foreign currency translation(0.8)— (0.1)(0.9)
June 27, 202168.7 11.2 6.9 86.8 
March 29, 202026.8 4.8 2.7 34.3 
Depreciation7.6 1.3 0.6 9.5 
Impact of foreign currency translation(0.5)— — (0.5)
June 28, 202033.9 6.1 3.3 43.3 
Net book value
June 27, 2021203.6 25.5 11.7 240.8 
June 28, 2020165.3 30.5 15.9 211.7 
March 28, 2021194.5 26.8 12.4 233.7 

Canada Goose Holdings Inc.
Page 11 of 27


Notes to the Condensed Consolidated Interim Financial Statements
(unaudited)
Lease liabilities
The following table presents the changes in the Company's lease liabilities:
(in millions of Canadian dollars)Retail storesManufacturing facilitiesOtherTotal
$$$$
March 28, 2021211.0 29.9 13.9 254.8 
Additions20.5 — 0.4 20.9 
Lease modifications1.5 — — 1.5 
Principal payments(7.6)(1.3)(1.0)(9.9)
Impact of foreign currency translation(2.8)— (0.2)(3.0)
June 27, 2021222.6 28.6 13.1 264.3 
March 29, 2020176.3 34.7 16.9 227.9 
Additions10.9 — 3.0 13.9 
Lease modifications— — (1.3)(1.3)
Principal payments(6.6)(1.2)(0.8)(8.6)
Impact of foreign currency translation(2.8)— (0.4)(3.2)
June 28, 2020177.8 33.5 17.4 228.7 
Lease liabilities are classified as current and non-current liabilities as follows:
(in millions of Canadian dollars)Retail storesManufacturing facilitiesOtherTotal
$$$$
Current lease liabilities40.3 5.7 3.6 49.6 
Non-current lease liabilities182.3 22.9 9.5 214.7 
June 27, 2021222.6 28.6 13.1 264.3 
Current lease liabilities29.2 5.0 3.6 37.8 
Non-current lease liabilities148.6 28.5 13.8 190.9 
June 28, 2020177.8 33.5 17.4 228.7 
Current lease liabilities36.2 5.1 3.9 45.2 
Non-current lease liabilities174.8 24.8 10.0 209.6 
March 28, 2021211.0 29.9 13.9 254.8 
Leases of low-value assets and short-term leases are not included in the calculation of lease liabilities. These lease expenses are recognized in cost of sales or SG&A expenses on a straight-line or other systematic basis.
During the first quarter ended June 27, 2021, $0.5m (June 28, 2020 - $1.8m) of lease payments were not included in the measurement of lease liabilities. The majority of this balance related to short-term leases and variable rent payments.

Canada Goose Holdings Inc.
Page 12 of 27


Notes to the Condensed Consolidated Interim Financial Statements
(unaudited)
Note 8.     Accounts payable and accrued liabilities
Accounts payable and accrued liabilities consist of the following:
(in millions of Canadian dollars)June 27,
2021
June 28,
2020
March 28,
2021
 $$ $
Trade payables47.9 52.4 78.9 
Accrued liabilities56.4 47.0 49.9 
Employee benefits19.6 15.1 28.3 
Derivative financial instruments10.7 11.4 8.8 
Other payables15.0 8.9 11.9 
Accounts payable and accrued liabilities149.6 134.8 177.8 
Note 9.    Provisions
Provisions consist primarily of amounts recorded with respect to customer warranty obligations, terminations of sales agents and distributors, sales returns, and asset retirement obligations.
Provisions are classified as current and non-current liabilities based on management's expectations of the timing of settlement, as follows:
(in millions of Canadian dollars)WarrantySales returnsAsset retirement obligationsOtherTotal
$$$$$
Current provisions6.0 7.4 — — 13.4 
Non-current provisions18.8 — 6.6 — 25.4 
June 27, 202124.8 7.4 6.6 — 38.8 
Current provisions4.0 6.0 — 0.8 10.8 
Non-current provisions14.8 — 4.0 3.0 21.8 
June 28, 202018.8 6.0 4.0 3.8 32.6 
Current provisions6.3 13.7 — — 20.0 
Non-current provisions20.1 — 5.5 — 25.6 
March 28, 202126.4 13.7 5.5 — 45.6 
Note 10.     Borrowings
Mainland China Facility
A subsidiary of the Company in Mainland China has an uncommitted loan facility in the amount of RMB 160.0m ("Mainland China Facility"). The Mainland China Facility includes a non-financial bank guarantee facility in the amount of RMB 10.0m. The term of each draw on the loan is one, three or six months or such other period as agreed upon and shall not exceed twelve months (including any extension or rollover). The interest rate is equal to 105% of the applicable People's Bank of China Benchmark Lending Rate and payable at one, three or six months, depending on the term of each draw. The Mainland China Facility is guaranteed by the

Canada Goose Holdings Inc.
Page 13 of 27


Notes to the Condensed Consolidated Interim Financial Statements
(unaudited)
Company and proceeds drawn on the facility will be used to support working capital requirements. As at June 27, 2021, the Company had $7.2m owing on the Mainland China Facility (June 28, 2020 - $2.6m, March 28, 2021 - $nil).
Revolving facility
The Company has an agreement with a syndicate of lenders for a senior secured asset-based credit facility consisting of a revolving credit facility in the amount of $467.5m, with an increase in commitments to $517.5m during the peak season (June 1 - November 30). The revolving facility matures on June 3, 2024. Amounts owing under the revolving facility may be borrowed, repaid and re-borrowed for general corporate purposes.
The revolving facility has multiple interest rate charge options that are based on the Canadian prime rate, Banker's Acceptance rate, the lenders' Alternate Base Rate, European Base Rate, LIBOR rate, or EURIBOR rate plus an applicable margin, with interest payable quarterly or at the end of the then current interest period (whichever is earlier). The Company has pledged substantially all of its assets as collateral for the revolving facility. The revolving facility contains financial and non-financial covenants which could impact the Company’s ability to draw funds.
As at June 27, 2021, the Company had repaid all amounts owing on the revolving facility (June 28, 2020 - $210.5m and March 28, 2021 - $nil) and related deferred financing charges in the amounts of $1.6m, $2.0m, and $1.7m, respectively, were included in other long-term liabilities. As at and during the first quarter ended June 27, 2021, the Company was in compliance with all covenants.
The Company had a first-in, last-out facility included in the revolving facility in the amount of $50.0m which matured on May 25, 2021. No amounts were outstanding at the time of maturity and the first-in, last-out facility has not been renewed.
The revolving credit commitment also includes a letter of credit commitment in the amount of $25.0m, with a $5.0m sub-commitment for letters of credit issued in a currency other than Canadian dollars, U.S. dollars, euros or British pounds sterling, and a swingline commitment for $25.0m. As at June 27, 2021, the Company had letters of credit outstanding under the revolving facility of $6.2m (June 28, 2020 - $6.5m, March 28, 2021 - $5.0m). The Company had unused borrowing capacity available under the revolving facility of $313.7m as at June 27, 2021 (June 28, 2020 - $169.3m, March 28, 2021 - $181.2m).

Canada Goose Holdings Inc.
Page 14 of 27


Notes to the Condensed Consolidated Interim Financial Statements
(unaudited)
Term loan
The Company has a senior secured loan agreement with a syndicate of lenders that is secured on a split collateral basis alongside the revolving facility. As a result of the Refinancing Amendment which took place on October 7, 2020, the aggregate principal amount owing increased to US$300.0m from US$113.8m.
On April 9, 2021, the Company entered into an agreement with its lenders to reprice its term loan, referred to as the Repricing Amendment and Fifth Amendment to Credit Agreement ("Repricing Amendment"). The Repricing Amendment decreases the interest to a rate of LIBOR plus an applicable margin of 3.50% from LIBOR plus an applicable margin of 4.25%, payable quarterly in arrears. The Company elected to account for the Repricing Amendment as a debt extinguishment and re-borrowing of the loan amount. As a result, the acceleration of unamortized costs of $9.5m was included in net interest, finance and other costs in the statement of loss. In connection with the Repricing Amendment, the Company incurred transaction costs of $1.0m which are being amortized using the effective interest rate method over the new term to maturity.
As a result of the Repricing Amendment, there were no changes to the following conditions from the existing term loan: a) the aggregate principal amount of US$300.0m; b) the maturity date of October 7, 2027; c) LIBOR may not be less than 0.75%, and d) US$0.75m on the principal amount is repayable quarterly. The Repricing Amendment had no impact on the existing derivative contracts entered into on October 30, 2020.
Voluntary prepayments of amounts owing under the term loan may be made at any time without premium or penalty but once repaid may not be reborrowed. The Company began quarterly repayments of US$0.75m on the principal amount during the first quarter ended June 27, 2021. The Company has pledged substantially all of its assets as collateral for the term loan. The term loan contains financial and non-financial covenants which could impact the Company’s ability to draw funds. As at and during the first quarter ended June 27, 2021, the Company was in compliance with all covenants.
As the term loan is denominated in U.S. dollars, the Company remeasures the outstanding balance plus accrued interest at each balance sheet date.
The amount outstanding with respect to the term loan is as follows:
(in millions of Canadian dollars)June 27,
2021
June 28,
2020
March 28,
2021
$$$
Term loan367.9 155.7 377.3 
Unamortized portion of deferred transaction costs(1.0)(1.1)(5.8)
Original issue discount— — (3.7)
366.9 154.6 367.8 

Canada Goose Holdings Inc.
Page 15 of 27


Notes to the Condensed Consolidated Interim Financial Statements
(unaudited)
Short-term Borrowings
The Company has short-term borrowings in the amount of $10.9m. Short-term borrowings include $7.2m owing on the Mainland China Facility and $3.7m for the quarterly principal repayments on the term loan. Short-term borrowings are all due within the next 12 months.
Net interest, finance and other costs consist of the following:
First quarter ended
(in millions of Canadian dollars)June 27,
2021
June 28,
2020
$$
Interest expense
Revolving facility0.2 0.8 
Term loan4.3 1.8 
Lease liabilities2.3 2.3 
Standby fees0.5 0.3 
Acceleration of unamortized costs on debt extinguishment9.5 — 
Interest income(0.3)(0.1)
Other costs— 1.6 
Net interest, finance and other costs16.5 6.7 

Canada Goose Holdings Inc.
Page 16 of 27


Notes to the Condensed Consolidated Interim Financial Statements
(unaudited)
Note 11.     Shareholders' equity
Share capital transactions for the first quarter ended June 27, 2021
The transactions affecting the issued and outstanding share capital of the Company are described below:
(in millions of Canadian dollars, except share and per share amounts)Multiple voting sharesSubordinate voting sharesTotal
Number$Number$Number$
March 28, 202151,004,076 1.4 59,435,079 119.1 110,439,155 120.5 
Exercise of stock options— — 41,203 2.7 41,203 2.7 
Settlement of RSUs— — 48,558 — 48,558 — 
June 27, 202151,004,076 1.4 59,524,840 121.8 110,528,916 123.2 
Share capital transactions for the first quarter ended June 28, 2020
The transactions affecting the issued and outstanding share capital of the Company are described below:
(in millions of Canadian dollars, except share and per share amounts)Multiple voting sharesSubordinate voting sharesTotal
Number$Number$Number$
March 29, 202051,004,076 1.4 58,999,182 113.3 110,003,258 114.7 
Exercise of stock options— — 127,564 0.4 127,564 0.4 
Settlement of RSUs— — 10,619 — 10,619 — 
June 28, 202051,004,076 1.4 59,137,365 113.7 110,141,441 115.1 
Note 12.    Share-based payments
The Company has issued stock options to purchase subordinate voting shares under its incentive plans, prior to the public share offering on March 21, 2017, the Legacy Plan, and subsequently, the Omnibus Plan. All options are issued at an exercise price that is not less than market value at the time of grant and expire ten years after the grant date.

Canada Goose Holdings Inc.
Page 17 of 27


Notes to the Condensed Consolidated Interim Financial Statements
(unaudited)
Stock option transactions are as follows:
First quarter ended
June 27,
2021
June 28,
2020
(in millions of Canadian dollars, except share and per share amounts)Weighted average exercise priceNumber of sharesWeighted average exercise priceNumber of shares
Options outstanding, beginning of period$38.32 2,498,973$32.97 1,793,957 
Granted to purchase shares$48.93 728,375$37.19 1,244,975 
Exercised$25.66 (41,203)$2.28 (127,564)
Cancelled$33.97 (1,414)$50.57 (69,969)
Expired$— $57.58 (6,831)
Options outstanding, end of period$40.92 3,184,731$35.69 2,834,568
Restricted share units
Under the Omnibus Plan, the Company has granted RSUs to employees of the Company. The RSUs are treated as equity instruments for accounting purposes. We expect that vested RSUs will be paid at settlement through the issuance of one subordinate voting share per RSU. The RSUs vest over a period of three years, a third on each anniversary of the date of grant.
RSUs transactions are as follows:
First quarter ended
June 27,
2021
June 28,
2020
NumberNumber
RSUs outstanding, beginning of period137,117 37,578 
Granted151,237 119,758 
Settled(48,558)(10,619)
Cancelled(1,026)(4,199)
RSUs outstanding, end of period238,770142,518
Subordinate voting shares, to a maximum of 2,961,954 shares, have been reserved for issuance under equity incentive plans to select employees of the Company, with vesting contingent upon meeting the service, performance goals and other conditions of the Omnibus Plan.

Canada Goose Holdings Inc.
Page 18 of 27


Notes to the Condensed Consolidated Interim Financial Statements
(unaudited)
Accounting for share-based awards
In the first quarter ended June 27, 2021, the Company recorded $2.7m as contributed surplus and compensation expense for the vesting of stock options and RSUs (first quarter ended June 28, 2020 - $1.8m). Share-based compensation expense is included in SG&A expenses.
The assumptions used to measure the fair value of options granted under the Black-Scholes option pricing model at the grant date were as follows:
First quarter ended
(in millions of Canadian dollars, except share and per share amounts)June 27,
2021
June 28,
2020
Weighted average stock price valuation$48.93 $37.19 
Weighted average exercise price$48.93 $37.19 
Risk-free interest rate0.44 %0.32 %
Expected life in years
Expected dividend yield— %— %
Volatility40 %40 %
Weighted average fair value of options issued$14.36 $9.90 
Fair value for RSUs is determined based on the market value of the subordinate voting shares at the time of grant. As at June 27, 2021, the weighted average fair value of the RSUs issued was $48.93 (June 28, 2020 - $33.97).
Note 13.    Related party transactions
The Company enters into transactions from time to time with its principal shareholders and organizations affiliated with members of the Board of Directors by incurring expenses for business services. During the first quarter ended June 27, 2021, the Company incurred expenses with related parties of $0.2m (first quarter ended June 28, 2020 - less than $0.1m) from companies related to certain shareholders. Balances owing to related parties as at June 27, 2021 were $0.2m (June 28, 2020 - $0.4m, March 28, 2021 - $0.3m).
A lease liability due to the controlling shareholder of the acquired Baffin Inc. business (the "Baffin Vendor") for leased premises was $4.4m as at June 27, 2021 (June 28, 2020 - $5.1m, March 28, 2021 - $4.6m). For the first quarter ended June 27, 2021, the Company paid principal and interest on the lease liability, net of rent concessions, and other operating costs to entities affiliated with the Baffin Vendor totaling $0.3m (first quarter ended June 28, 2020 - $0.3m). No amounts were owing to Baffin entities as at June 27, 2021, June 28, 2020, and March 28, 2021.

Canada Goose Holdings Inc.
Page 19 of 27


Notes to the Condensed Consolidated Interim Financial Statements
(unaudited)
Note 14.    Financial instruments and fair value
The following table presents the fair values and fair value hierarchy of the Company’s financial instruments and excludes financial instruments carried at amortized cost that are short-term in nature:
June 27,
2021
(in millions of Canadian dollars)Level 1Level 2Level 3Carrying valueFair value
 $ $ $ $ $
Financial assets
Cash305.9 — — 305.9 305.9 
Derivatives included in other current assets— 8.5 — 8.5 8.5 
Derivatives included in other long-term assets— 4.4 — 4.4 4.4 
Financial liabilities
Derivatives included in accounts payable and accrued liabilities— 10.7 — 10.7 10.7 
Short-term borrowings— — 7.2 7.2 7.2 
Derivatives included in other long-term liabilities— 26.8 — 26.8 26.8 
Term loan— 366.9 — 366.9 367.9 

Canada Goose Holdings Inc.
Page 20 of 27


Notes to the Condensed Consolidated Interim Financial Statements
(unaudited)
June 28,
2020
(in millions of Canadian dollars)Level 1Level 2Level 3Carrying valueFair value
$$$$$
Financial assets
Cash160.1 — — 160.1 160.1 
Derivatives included in other current assets— 7.1 — 7.1 7.1 
Derivatives included in other long-term assets— 2.2 — 2.2 2.2 
Financial liabilities
Derivatives included in accounts payable and accrued liabilities— 11.4 — 11.4 11.4 
Short-term borrowings— — 2.6 2.6 2.6 
Derivatives included in other long-term liabilities— 1.3 — 1.3 1.3 
Revolving facility — — 207.9 207.9 210.5 
Term loan— — 154.6 154.6 155.7 
March 28,
2021
(in millions of Canadian dollars)Level 1Level 2Level 3Carrying valueFair value
 $ $ $ $ $
Financial assets
Cash477.9 — — 477.9 477.9 
Derivatives included in other current assets— 5.9 — 5.9 5.9 
Derivatives included in other long-term assets— 5.1 — 5.1 5.1 
Financial liabilities
Derivatives included in accounts payable and accrued liabilities— 8.8 — 8.8 8.8 
Derivatives included in other long-term liabilities— 19.5 — 19.5 19.5 
Term loan— 367.8 — 367.8 377.3 
There were no transfers between the levels of fair value hierarchy.

Canada Goose Holdings Inc.
Page 21 of 27


Notes to the Condensed Consolidated Interim Financial Statements
(unaudited)
Note 15.    Financial risk management objectives and policies
The Company’s primary risk management objective is to protect the Company’s assets and cash flow, in order to increase the Company’s enterprise value.
The Company is exposed to capital management risk, liquidity risk, credit risk, market risk, foreign exchange risk, and interest rate risk. The Company’s senior management and Board of Directors oversee the management of these risks. The Board of Directors reviews and agrees upon policies for managing each of these risks which are summarized below.
Capital management
The Company manages its capital and capital structure with the objectives of safeguarding sufficient net working capital over the annual operating cycle and providing sufficient financial resources to grow operations to meet long-term consumer demand. The Board of Directors of the Company monitors the Company’s capital management on a regular basis. The Company will continually assess the adequacy of the Company’s capital structure and capacity and make adjustments within the context of the Company’s strategy, economic conditions, and risk characteristics of the business.
Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to satisfy the requirements for business operations, capital expenditures, debt service and general corporate purposes, under normal and stressed conditions. The primary source of liquidity is funds generated by operating activities; the Company also relies on Mainland China Facility and the revolving facility as sources of funds for short term working capital needs. The Company continuously reviews both actual and forecasted cash flows to ensure that the Company has appropriate capital capacity.
The following table summarizes the amount of contractual undiscounted future cash flow requirements as at June 27, 2021:
Contractual obligationsQ2 to Q4 202220232024202520262027ThereafterTotal
(in millions of Canadian dollars)$$$$$$$$
Accounts payable and accrued liabilities149.6 — — — — — — 149.6 
Mainland China Facility7.2 — — — — — — 7.2 
Term loan2.8 3.7 3.7 3.7 3.7 3.7 346.6 367.9 
Interest commitments relating to borrowings(1)
12.0 15.6 15.6 15.6 15.6 15.6 23.5 113.5 
Foreign exchange forward contracts— 2.2 — — 22.4 — — 24.6 
Lease obligations43.8 60.5 50.2 45.4 34.3 27.9 43.6 305.7 
Pension obligation— — — — — — 2.1 2.1 
Total contractual obligations215.4 82.0 69.5 64.7 76.0 47.2 415.8 970.6 
(1)    Interest commitments are calculated based on the loan balance and the interest rate payable on the Mainland China Facility and the term loan of 4.26% and 4.25%, respectively, as at June 27, 2021.
As at June 27, 2021, we had additional liabilities which included provisions for warranty, sales returns, asset retirement obligations, and deferred income tax liabilities. These liabilities have not been included in the table above as the timing and amount of future payments are uncertain.

Canada Goose Holdings Inc.
Page 22 of 27


Notes to the Condensed Consolidated Interim Financial Statements
(unaudited)
Letter of guarantee facility
On April 14, 2020, Canada Goose Inc. entered into a letter of guarantee facility in the amount of $10.0m. Letters of guarantee are available for terms of up to twelve months and will be charged a fee equal to 1.2% per annum calculated against the face amount and over the term of the guarantee. Amounts issued on the facility will be used to finance working capital requirements through letters of guarantee, standby letters of credit, performance bonds, counter guarantees, counter standby letters of credit, or similar credits. The Company immediately reimburses the issuing bank for amounts drawn on issued letters of guarantees. At June 27, 2021, the Company had $5.9m outstanding.
Credit risk
Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss.
Credit risk arises from the possibility that certain parties will be unable to discharge their obligations. The Company manages its credit risk through a combination of third party credit insurance and internal house risk. Credit insurance is provided by a third party for customers and is subject to continuous monitoring of the credit worthiness of the Company's customers. Insurance covers a specific amount of revenue, which may be less than the Company's total revenue with a specific customer. As at June 27, 2021, accounts receivable totaling approximately $7.6m (June 28, 2020 - $4.7m, March 28, 2021 - $5.7m) were insured, under a maximum credit limit of $30.0m. Complementary to third party insurance, the Company establishes payment terms with customers to mitigate credit risk and continues to closely monitor its accounts receivable credit risk exposure.
Trade accounts receivable factoring program
A subsidiary of the Company in Europe has an agreement to factor, on a limited recourse basis, certain of its trade accounts receivable up to a limit of €20.0m in exchange for advanced funding equal to 100% of the principal value of the invoice.
For the first quarter ended June 27, 2021, the Company received cash proceeds from the sale of trade accounts receivable with carrying values of $0.9m which were derecognized from the Company's statement of financial position (first quarter ended June 28, 2020 - $nil). Fees of less than $0.1m were incurred during the first quarter ended June 27, 2021 (first quarter ended June 28, 2020 - $nil) and included in net interest, finance and other costs in the statement of loss. As at June 27, 2021, the outstanding amount of trade accounts receivable derecognized from the Company’s statement of financial position, but which the Company continued to service was $0.9m (June 28, 2020 - $nil, March 28, 2021 - $nil).
Market risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market prices comprise foreign exchange risk and interest rate risk.

Canada Goose Holdings Inc.
Page 23 of 27


Notes to the Condensed Consolidated Interim Financial Statements
(unaudited)
Foreign exchange risk
Foreign exchange risk in operating cash flows
The Company’s Interim Financial Statements are expressed in Canadian dollars, but a substantial portion of the Company’s revenues, purchases and expenses are denominated in other currencies, principally U.S. dollars, euros, British pounds sterling, Swiss francs, Chinese yuan, and Hong Kong dollars. The Company has entered into forward foreign exchange contracts to reduce the foreign exchange risk associated with revenues, purchases, and expenses denominated in these currencies. Certain forward foreign exchange contracts were designated at inception and accounted for as cash flow hedges. On December 18, 2020, the Company initiated the operating hedge program for the fiscal year ending April 3, 2022.
Revenues and expenses of all foreign operations are translated into Canadian dollars at the foreign currency exchange rates that approximate the rates in effect at the dates when such items are recognized. Appreciating foreign currencies relative to the Canadian dollar, to the extent they are not hedged, will positively impact operating income and net income, while depreciating foreign currencies relative to the Canadian dollar will have the opposite impact.

Canada Goose Holdings Inc.
Page 24 of 27


Notes to the Condensed Consolidated Interim Financial Statements
(unaudited)
During the first quarter ended June 27, 2021, the Company re-assessed the operating hedge program for the fiscal year ending April 3, 2022 to protect the Company against adverse fluctuations in foreign exchange rates. Based on revenues, purchases and expenses incurred in the quarter, the re-assessment allows the Company to reduce its exposure to variability in the cash flow, resulting in a rebalancing of the operating hedge program for the year ending April 3, 2022. Due to the rebalancing, $0.2m was recognized as unrealized foreign exchange gains and losses.
The Company recognized the following unrealized gains in the fair value of derivatives designated as cash flow hedges in other comprehensive income:
First quarter ended
June 27,
2021
June 28,
2020
(in millions of Canadian dollars)Net gainTax expenseNet gainTax expense
$$$$
Forward foreign exchange contracts designated as cash flow hedges0.7 (0.2)2.3 (0.8)
For the first quarter ended June 27, 2021, gains of $0.1m (first quarter ended June 28, 2020 - $nil) were reclassified from other comprehensive income to SG&A expenses on derivatives designated as cash flow hedges. For the first quarter ended June 27, 2021, gains of $1.0m (first quarter ended June 28, 2020 - $nil) were reclassified from other comprehensive income to inventory on derivatives designated as cash flow hedges.
For the first quarter ended June 27, 2021, unrealized gains of $0.3m (first quarter ended June 28, 2020 - unrealized gain of $0.6m) on forward exchange contracts that were not treated as hedges were recognized in SG&A expenses in the statement of loss.
Foreign currency forward exchange contracts outstanding as at June 27, 2021 related to operating cash flows were:
(in millions)Aggregate AmountsCurrency
Forward contract to purchase Canadian dollarsUS$79.0 U.S. dollars
89.1 euros
Forward contract to sell Canadian dollarsUS$59.0 U.S. dollars
55.9 euros
Forward contract to purchase eurosCNY435.0 Chinese yuan
£28.2 British pounds sterling
HKD56.2 Hong Kong dollars
SEK0.1 Swedish kronor
Forward contract to sell eurosCHF0.2 Swiss francs
CNY141.9 Chinese yuan
£2.9 British pounds sterling

Canada Goose Holdings Inc.
Page 25 of 27


Notes to the Condensed Consolidated Interim Financial Statements
(unaudited)
Foreign exchange risk on borrowings
The Company enters into derivative transactions to hedge a portion of its exposure to interest rate risk and foreign currency exchange risk related to principal and interest payments on the term loan denominated in U.S. dollars (note 10). The Company also entered into a five-year forward exchange contract by selling $368.5m and receiving US$270.0m as measured on the trade date, to fix the foreign exchange risk on a portion of the term loan borrowings.
The Company recognized the following unrealized losses and gains in the fair value of derivatives designed as hedging instruments in other comprehensive income:
First quarter ended
June 27,
2021
June 28,
2020
(in millions of Canadian dollars)Net lossTax recoveryNet (loss) gainTax recovery (expense)
$$$$
Swaps designated as cash flow hedges(0.5)0.2 (2.1)0.3 
Euro-denominated cross-currency swap designated as a net investment hedge— — 1.6 (0.3)
The Company reclassified the following losses from other comprehensive income on derivatives designated as hedging instruments to SG&A expenses:
First quarter ended
(in millions of Canadian dollars)June 27,
2021
June 28,
2020
Loss from other comprehensive income$$
Swaps designated as cash flow hedges0.2 2.2 
For the first quarter ended June 27, 2021, unrealized losses of $7.5m (first quarter ended June 28, 2020 - unrealized losses of $0.8m) in the fair value of the long-dated forward exchange contract related to a portion of the term loan balance were recognized in SG&A expenses in the statement of loss.
Interest rate risk
The Company is exposed to interest rate risk related to the effect of interest rate changes on borrowings outstanding under Mainland China Facility, the revolving facility, and the term loan. Based on the weighted average amount of outstanding borrowings on our Mainland China Facility during the first quarter ended June 27, 2021, a 1.00% increase in the average interest rate on our borrowings would have increased interest expense by less than $0.1m (first quarter ended June 28, 2020 - less than $0.1m). Correspondingly, a 1.00% increase in the average interest rate would have increased interest expense on the revolving facility and term loan by less than $0.1m and $0.9m, respectively (first quarter ended June 28, 2020 - $0.3m and $0.4m, respectively).

Canada Goose Holdings Inc.
Page 26 of 27


Notes to the Condensed Consolidated Interim Financial Statements
(unaudited)
The Company entered into five-year interest rate swaps by fixing the LIBOR component of its interest rate at 0.95% on notional debt of US$270.0m. The swaps terminate on December 31, 2025. Subsequent to the Repricing Amendment, the applicable interest rate on the interest rate swaps is 4.45%. The interest rate swaps were designated at inception and accounted for as cash flow hedges.
Interest rate risk on the term loan is partially mitigated by interest rate swap hedges. The impact on future interest expense as a result of future changes in interest rates will depend largely on the gross amount of borrowings at that time.
Note 16.    Selected cash flow information
Changes in non-cash operating items
First quarter ended
(in millions of Canadian dollars)June 27,
2021
June 28,
2020
$$
 Trade receivables1.4 3.8 
 Inventories(63.2)(16.6)
 Other current assets(0.8)(2.0)
 Accounts payable and accrued liabilities(37.9)(6.2)
 Provisions(6.9)(4.4)
 Other0.5 1.0 
Change in non-cash operating items(106.9)(24.4)

Canada Goose Holdings Inc.
Page 27 of 27
Document

CANADA GOOSE HOLDINGS INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
For the first quarter ended June 27, 2021
The following Management’s Discussion and Analysis (“MD&A”) for Canada Goose Holdings Inc. (“us,” “we,” “our,” “Canada Goose” or the “Company”) is dated August 10, 2021 and provides information concerning our results of operations and financial condition for the first quarter ended June 27, 2021. All figures are presented in Canadian (“CAD”) dollars, unless otherwise noted. You should read this MD&A together with our unaudited condensed consolidated interim financial statements as at and for the first quarter ended June 27, 2021 (“Interim Financial Statements”) and our audited consolidated financial statements and the related notes for the fiscal year ended March 28, 2021 (“Annual Financial Statements”). Additional information about Canada Goose is available on our website at www.canadagoose.com, on the SEDAR website at www.sedar.com, and on the EDGAR section of the U.S. Securities and Exchange Commission (the “SEC”) website at www.sec.gov, including our Annual Report on Form 20-F for the fiscal year ended March 28, 2021 (“Annual Report”).
CAUTIONARY NOTE REGARDING FORWARD‑LOOKING STATEMENTS
This MD&A contains forward-looking statements. These statements are neither historical facts nor assurances of future performance. Instead, they are based on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, and other future conditions. Forward-looking statements can be identified by words such as “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “intend,” “may,” “plan,” “predict,” “project,” “target,” “potential,” “will,” “would,” “could,” “should,” “continue,” and other similar expressions, although not all forward-looking statements contain these identifying words. These forward-looking statements include all matters that are not historical facts. They appear in many places throughout this MD&A and include statements regarding our intentions, beliefs or current expectations concerning, among other things, our results of operations, financial condition, liquidity, business prospects, growth, strategies, expectations regarding industry trends and the size and growth rates of addressable markets, our business plan and our growth strategies, including plans for expansion to new markets and new products, expectations for seasonal trends, and the industry in which we operate.
Certain assumptions made in preparing the forward-looking statements contained in this MD&A include:
our ability to continue operating our business amid the societal and economic disruption caused by the novel coronavirus pandemic (“COVID-19”);
our ability to implement our growth strategies;
our ability to maintain strong business relationships with our customers, suppliers, wholesalers, and distributors;
our ability to keep pace with changing consumer preferences;
our ability to protect our intellectual property; and
the absence of material adverse changes in our industry or the global economy.
Canada Goose Holdings Inc.
Page 1 of 37


By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. We believe that these risks and uncertainties include, but are not limited to, those described in the “Risk Factors” section of our Annual Report and other risk factors described herein, which include, but are not limited to, the following risks:
risks and global disruptions, associated with the ongoing COVID-19 pandemic; which may further affect general economic conditions, including discretionary consumer spending;
additional potential or extended closures of our retail stores and the retail stores of our wholesale partners as a result of COVID-19 related restrictions imposed by local authorities;
we may not open new retail stores or expand e-Commerce access on our planned timelines;
we may be unable to maintain the strength of our brand or to expand our brand to new products and geographies;
unanticipated changes in the effective tax rate or adverse outcomes from audit examinations of corporate income or other tax returns;
our indebtedness may adversely affect our financial condition;
global political events, including the impact of political disruptions and protests; which may cause business interruptions;
our ability to procure high quality raw materials and certain finished goods globally;
our ability to forecast our inventory need and to manage our product distribution networks;
the success of our business strategy;
our ability to manage our exposure to data security and cyber security events;
fluctuations in raw material costs, interest rates and currency exchange rates; and
we may be unable to maintain effective internal controls over financial reporting.
Although we base the forward-looking statements contained in this MD&A on assumptions that we believe are reasonable, we caution you that actual results and developments (including our results of operations, financial condition and liquidity, and the development of the industry in which we operate) may differ materially from those made in or suggested by the forward-looking statements contained in this MD&A. Additional impacts may arise that we are not aware of currently. The potential of such additional impacts intensifies the business and operating risks which we face, and these should be considered when reading the forward-looking statements contained in this MD&A. In addition, even if results and developments are consistent with the forward-looking statements contained in this MD&A, those results and developments may not be indicative of results or developments in subsequent periods. As a result, any or all of our forward-looking statements in this MD&A may prove to be inaccurate. No forward-looking statement is a guarantee of future results. Moreover, we operate in a highly competitive and rapidly changing environment in which new risks often emerge. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or
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the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make.
You should read this MD&A and the documents that we reference herein completely and with the understanding that our actual future results may be materially different from what we expect. The forward-looking statements contained herein are made as of the date of this MD&A, and we do not assume any obligation to update any forward-looking statements except as required by applicable laws.
BASIS OF PRESENTATION
The Interim Financial Statements are prepared in accordance with International Financial Reporting Standards (“IFRS”), specifically International Accounting Standard (“IAS”) 34, Interim Financial Reporting, as issued by the International Accounting Standards Board (“IASB”), and are presented in millions of Canadian dollars, except where otherwise indicated. The Interim Financial Statements do not include all of the information required for Annual Financial Statements and should be read in conjunction with the Annual Financial Statements. Certain financial measures contained in this MD&A are non-IFRS financial measures and are discussed further under “Non-IFRS Financial Measures” below.
All references to “$”, “CAD” and “dollars” refer to Canadian dollars, “USD” and “US$” refer to U.S. dollars, “GBP” refer to British pounds sterling, “EUR” refer to euros, “CHF” refer to Swiss francs, “CNY” refer to Chinese yuan, ”RMB” refer to Chinese renminbi and “HKD” refer to Hong Kong dollars unless otherwise indicated. Certain totals, subtotals and percentages throughout this MD&A may not reconcile due to rounding.
All references to “fiscal 2019” are to the Company’s fiscal year ended March 31, 2019; “fiscal 2020” are to the Company’s fiscal year ended March 29, 2020; to “fiscal 2021” are to the Company’s fiscal year ended March 28, 2021; and to “fiscal 2022” are to the Company’s fiscal year ending April 3, 2022.
Certain comparative figures have been reclassified to conform with the current year presentation.
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SUMMARY OF FINANCIAL PERFORMANCE
The following table summarizes results of operations for the first quarter ended June 27, 2021 compared to the first quarter ended June 28, 2020, and expresses the percentage relationship to revenue of certain financial statement captions. Basis points (“bps”) expresses the changes between percentages. See “Results of Operations” for additional details.
CAD $ millions
(except per share data)
First quarter ended
June 27,
2021
June 28,
2020
%
Change
Statement of Operations data:
Revenue56.3 26.1 115.7%
Gross profit30.7 4.8 539.6%
Gross margin 54.5 %18.4 %3,610 bps
Operating loss(60.7)(59.3)(2.4)%
Net loss(56.7)(50.1)(13.2)%
Loss per share
Basic and diluted$(0.51)$(0.46)10.9%
Non-IFRS Financial Measures:(1)
EBIT(60.7)(59.3)(2.4)%
Adjusted EBIT(60.2)(46.5)(29.5)%
Adjusted EBIT margin(106.9)%(178.2)%7,130 bps
Adjusted net loss(50.0)(38.4)(30.2)%
Adjusted net loss per basic and diluted share$(0.45)$(0.35)(28.6)%
(1)See “Non-IFRS Financial Measures” for a description of these measures and a reconciliation to the nearest IFRS measure.
Segments
Our reporting segments align with our sales channels: Direct-to-Consumer (“DTC”), Wholesale, and Other. We measure each reportable operating segment’s performance based on revenue and operating income. As at June 27, 2021, our DTC segment included sales to customers through our 51 national e-Commerce markets and 30 directly operated retail stores across North America, Europe, and Asia Pacific. Through our Wholesale segment, we sell to a mix of retailers and international distributors. The Other segment comprises sales and costs not directly allocated to the DTC or Wholesale channels, such as sales to employees and SG&A expenses.
Factors Affecting our Performance
We believe that our performance depends on many factors including those discussed below.
COVID-19 pandemic. Globally, public health officials have imposed restrictions and recommended precautions to mitigate the spread of COVID-19, resulting in temporary closures of our retail locations as well as reduced traffic and store productivity, similarly impacting our wholesale partners. We have also experienced a significant reduction in the capacity of our supply chain, including our facilities, due to distancing measures. We expect to return to more normal levels of production as restrictions and recommended precautions are lifted. We will continue to leverage our subcontractor network to ensure supply is balanced with demand. These circumstances have had material adverse consequences on
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our results of operations for the first quarter ended June 27, 2021 and are likely to negatively impact future fiscal periods as disruptions and prolonged consequences continue. The extent of the impact will depend on future developments, which are highly uncertain and out of our control, including, among others, the duration and intensity of the pandemic, the emergence and spreading of variants and mutations of the virus, the pace of roll-out of the vaccination programs and rates of participation therein.
Across our global store network, approximately 20% of total trading days were lost to temporary closures in the first quarter of fiscal 2022, compared to approximately 60% in the comparative quarter. All of our retail stores are operating as at August 10, 2021. All our manufacturing facilities were operating as at June 27, 2021 at lower output levels than historically realized to ensure appropriate distancing measures were in place. It is possible that further closures may be required in the countries in which we operate, impacting our retail stores and manufacturing facilities as well as our wholesale partners.
We also received rent concessions in the form of abatements and deferrals and will consider seeking further rent relief as we continue to monitor the impact of COVID-19. Rent concessions of $0.2m were recognized in the statement of loss for the first quarter ended June 27, 2021.
Growth investments. In the early stages of the COVID-19 pandemic at the height of first wave retail closures, discretionary selling, general & administrative (“SG&A”) expenses spend was reduced significantly. As distribution and sales recover, we expect to make significant SG&A investments ahead of revenue growth in certain areas, including brand and demand building, and this may continue going forward. We will be guided by our view of opportunities to deliver on our growth strategy.
Global political events and other disruptions. We are conscious of risks related to social, economic, and political instability, including geopolitical tensions, regulatory matters, market volatility, and social unrest that are affecting consumer spending in certain countries and travel corridors. We have been, and may in the future be, impacted by widespread protests and other disruptions. To the extent that such disruptions persist, we expect that operations and traffic at our retail stores may be impacted.
Growth in our DTC Channel. We plan to continue executing our global strategy through retail and e-Commerce expansion, though the scale of such expansion has been impacted and may be delayed due to COVID-19.
New Products. We intend to continue investing in innovation and the development and introduction of new products across styles, uses, and climates. Additionally, we continue to sell Baffin branded footwear through Baffin’s own distinct sales channels. We are also developing a separate Canada Goose footwear offering for cold weather which is planned for commercial launch in Fall / Winter 2021. We expect that certain new products may carry a lower gross margin per unit relative to our long-standing styles which are produced in significantly higher volumes.
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Seasonality. We experience seasonal fluctuations in our revenue and operating results and have historically realized a significant portion of our annual wholesale revenue during our second and third fiscal quarters, and our annual DTC revenue in our third and fourth fiscal quarters. Because of seasonal fluctuations in revenue and fixed costs associated with our business, particularly the headcount growth and premises costs associated with our expanding DTC channel, we typically experience negative and substantially reduced net income and adjusted EBIT(1) in the first and fourth quarters, respectively. As a result of our seasonality, changes that impact gross margin and adjusted EBIT(1) can have a disproportionate impact on the quarterly results when they are recorded in our off-peak revenue periods.
(1)    Adjusted EBIT is a non-IFRS measure. See “Non-IFRS Financial Measures” for a description of these measures.
Guided by expected demand and wholesale orders, we typically manufacture on a linear basis throughout the fiscal year. Net working capital requirements typically increase as inventory builds. We finance these needs through a combination of cash on hand and borrowings on the Revolving Facility (as defined below) and the uncommitted loan facility in Mainland China (the “Mainland China Facility”). Historically, cash flows from operations have been highest in the third and fourth fiscal quarters of the fiscal year due to revenue from the DTC channel and the collection of receivables from wholesale revenue earlier in the year.
Developments in international trade. We continue to monitor the impact on our operations in Europe and the U.K. as a result of the British exit from the European Union (“Brexit”). Our preparations for Brexit included, among other activities, opening a third-party logistics facility early in fiscal 2021, advanced inventory staging in the U.K. in the event of disruptions to the flow of goods, and adding processes to utilize duty savings under the Canada-U.K. Continuity Trade Agreement. Duty savings continue for U.S. shipments under the United States-Mexico-Canada Agreement. We monitor developments in international trade in countries where we operate that could have an impact on our business.
Foreign Exchange. We sell a significant portion of our products to customers outside of Canada, which exposes us to fluctuations in foreign currency exchange rates. In fiscal years 2021, 2020, and 2019, we generated 67.9%, 62.3%, and 58.0%, respectively, of our revenue in currencies other than Canadian dollars. Historically, most of our wholesale revenue was derived from orders made prior to the beginning of the fiscal year. This high degree of visibility into our anticipated future cash flows from wholesale operations is now significantly less certain given the COVID-19 disruptions. Most of our raw materials are sourced outside of Canada, primarily in U.S. dollars, and SG&A expenses are typically denominated in the currency of the country in which they are incurred. As part of our risk management program, we have entered into foreign exchange derivative contracts to manage certain of our exposures to exchange rate fluctuations for future foreign currency transactions, which is intended to reduce the variability of our operating costs and future cash flows denominated in local currencies. We continue to monitor our risk management program to take into account the prevailing global uncertainty of COVID-19.
We are exposed to translation and transaction risks associated with foreign currency exchange fluctuations on the Chinese renminbi denominated principal and interest amounts payable on our Mainland China Facility and U.S. dollar denominated principal and interest amounts payable on our Revolving Facility and senior secured term loan facility (the “Term Loan Facility”). The Company has entered into foreign exchange forward contracts to hedge
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a portion of the exposure to foreign currency exchange risk on the principal amount of the Term Loan Facility. See “Quantitative and Qualitative Disclosures about Market Risk - Foreign Exchange Risk” below.
The main foreign currency exchange rates that impact our business and operations as at and for the first quarter ended June 27, 2021 and for the year ended March 28, 2021 are summarized below:
Foreign currency exchange rate to $1.00 CAD
Fiscal 2022
Average RateClosing Rate
CurrencyQ1Q2Q3Q42022June 27, 2021
USD/CAD1.2280 — — — 1.2280 1.2294 
EUR/CAD1.4804 — — — 1.4804 1.4685 
GBP/CAD1.7170 — — — 1.7170 1.7088 
CHF/CAD1.3485 — — — 1.3485 1.3409 
CNY/CAD0.1902 — — — 0.1902 0.1905 
HKD/CAD0.1581 — — — 0.1581 0.1584 
Foreign currency exchange rate to $1.00 CAD
Fiscal 2021
Average RateClosing Rate
CurrencyQ1Q2Q3Q42021March 28, 2021
USD/CAD1.3859 1.3316 1.3030 1.2666 1.3218 1.2580 
EUR/CAD1.5256 1.5579 1.5537 1.5267 1.5410 1.4831 
GBP/CAD1.7203 1.7212 1.7207 1.7461 1.7271 1.7345 
CHF/CAD1.4378 1.4486 1.4417 1.4003 1.4321 1.3384 
CNY/CAD0.1955 0.1926 0.1967 0.1955 0.1951 0.1923 
HKD/CAD0.1788 0.1718 0.1681 0.1633 0.1705 0.1619 
    Source: Bank of Canada

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Components of Our Results of Operations
Revenue
The DTC segment comprises sales through country-specific e-Commerce platforms and its Company-operated retail stores located in luxury shopping locations. Revenue through e-Commerce operations and retail stores is recognized upon delivery of the goods to the customer and when consideration is received, net of an estimated provision for sales returns.
The Wholesale segment comprises sales made to a mix of functional and fashionable retailers, including major luxury department stores, outdoor specialty stores, and individual shops, and to international distributors, who are partners that have exclusive rights to an entire market. Wholesale revenue from the sale of goods, net of an estimated provision for sales returns, discounts, and allowances, is recognized when control of the goods has been transferred to the reseller, which, depending on the terms of the agreement with the reseller, occurs when the products have been shipped to the reseller, are picked up from our third party warehouse, or arrive at the reseller’s facilities.
The Other segment comprises sales and costs not directly allocated to the DTC or Wholesale channels, such as sales to employees and SG&A expenses. The Other segment includes the cost of marketing expenditures to build brand awareness and demand across all segments, corporate costs in support of manufacturing operations, other corporate costs, and foreign exchange gains and losses not specifically associated with DTC or Wholesale segment operations.
Within the Other segment, comparative information also includes sales of personal protective equipment ("PPE") in response to COVID-19 along with costs incurred as a consequence of the COVID-19 pandemic including overhead costs resulting from the temporary closure of our manufacturing facilities.
Gross Profit
Gross profit is our revenue less cost of sales. Cost of sales comprises the cost of manufacturing our products, including raw materials, direct labour, and overhead, plus freight, duties, and non-refundable taxes incurred in delivering the goods to distribution centres managed by third parties or to our retail stores. Cost of sales also includes depreciation on our manufacturing right-of-use assets and plant assets as well as inventory provisions, and allowances related to obsolescence and shrinkage. The primary drivers of our cost of sales are the costs of raw materials (which are sourced in both Canadian dollars and U.S. dollars), manufacturing labour rates in the provinces of Canada, and the allocation of overhead. Gross margin measures our gross profit as a percentage of revenue.
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SG&A Expenses
SG&A expenses consist of selling costs to support our customer relationships and to deliver our products to our e-Commerce customers, retail stores, and wholesale partners. It also includes our marketing and brand investment activities and the corporate infrastructure required to support our ongoing operations. Incurred product development costs, primarily employee salaries and benefits, are also recognized in SG&A expenses. Foreign exchange gains and losses are recorded in SG&A expenses and comprise the translation of assets and liabilities denominated in currencies other than the functional currency of the Company or its subsidiaries, including cash balances, the Mainland China Facility, the Term Loan Facility, a portion of our Revolving Facility, mark-to-market adjustments on derivative contracts, gains or losses associated with our term loan hedges, and realized gains on settlement of foreign currency denominated assets and liabilities.
Selling costs, other than headcount-related costs, generally correlate to revenue timing and would typically experience similar seasonal trends. As a percentage of sales, we expect these selling costs to change as our business evolves. This change has been and is expected to be primarily driven by the expansion of our DTC segment, including the investment required to support e-Commerce sites and retail stores. Retail store costs are mostly fixed and are incurred throughout the year.
General and administrative expenses represent costs incurred in our corporate offices, primarily related to marketing, personnel costs (including salaries, variable incentive compensation, benefits, and share-based compensation), technology support, and other professional service costs. We have invested considerably in this area to support the growing volume and complexity of our business and anticipate continuing to do so in the future.
Depreciation and amortization
Depreciation and amortization represent the economic benefit incurred in using the Company’s property, plant and equipment, intangible assets, and right-of-use assets. We expect depreciation and amortization to increase, primarily driven by the expansion of our DTC segment and information technology-related expenditures to support growth.
Operating Income
Operating income is our gross profit less SG&A expenses and depreciation and amortization.
Net interest, finance and other costs
Net interest, finance and other costs represents interest expense on our borrowings including the Mainland China Facility, the Revolving Facility, the Term Loan Facility, and lease liabilities, as well as standby fees, net of interest income. In addition, corporate restructuring costs were recognized in fiscal 2021.
Income Taxes
We are subject to income taxes in the jurisdictions in which we operate and, consequently, income tax expense is a function of the allocation of taxable income by jurisdiction and the various activities that impact the timing of taxable events.

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For the first quarter ended June 27, 2021 compared to the first quarter ended June 28, 2020
The following table summarizes results of operations and expresses the percentage relationship to revenue of certain financial statement captions. Basis points (“bps”) expresses the changes between percentages.
CAD $ millions
(except share and per share data)
First quarter ended$ Change% Change
June 27,
2021
June 28,
2020
Statement of Operations data:
Revenue56.3 26.1 30.2115.7%
Cost of sales25.6 21.3 (4.3)(20.2)%
Gross profit30.7 4.8 25.9539.6%
Gross margin54.5 %18.4 %3,610 bps
SG&A expenses71.6 48.6 (23.0)(47.3)%
SG&A expenses as % of revenue127.2 %186.2 %5,900 bps
Depreciation and amortization19.8 15.5 (4.3)(27.7)%
Operating loss(60.7)(59.3)(1.4)(2.4)%
Operating margin(107.8)%(227.2)%11,940 bps
Net interest, finance and other costs16.5 6.7 (9.8)(146.3)%
Loss before income taxes(77.2)(66.0)(11.2)(17.0)%
Income tax recovery(20.5)(15.9)4.628.9%
Effective tax rate26.6 %24.1 %(250) bps
Net loss(56.7)(50.1)(6.6)(13.2)%
Other comprehensive (loss) income(1.7)2.0 (3.7)(185.0)%
Comprehensive loss(58.4)(48.1)(10.3)(21.4)%
Loss per share
Basic and diluted$(0.51)$(0.46)(0.05)10.9%
Weighted average number of shares outstanding
Basic and diluted110,504,248 110,080,288 
Non-IFRS Financial Measures:(1)
EBIT(60.7)(59.3)(1.4)(2.4)%
Adjusted EBIT(60.2)(46.5)(13.7)(29.5)%
Adjusted EBIT margin(106.9)%(178.2)%7,130 bps
Adjusted net loss(50.0)(38.4)(11.6)(30.2)%
Adjusted net loss per basic and diluted share$(0.45)$(0.35)(0.10)(28.6)%
(1)See “Non-IFRS Financial Measures” for a description of these measures and a reconciliation to the nearest IFRS measure.
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Revenue
Revenue for the first quarter ended June 27, 2021 was $56.3m, an increase of $30.2m, or 115.7%, from $26.1m for the first quarter ended June 28, 2020. Revenue generated from our DTC channel represented 52.2% of total revenue for the first quarter ended June 27, 2021 compared to 39.8% for the first quarter ended June 28, 2020. On a constant currency(1) basis, revenue increased by 117.6% for the first quarter ended June 27, 2021 compared to the first quarter ended June 28, 2020.
First quarter ended$ Change% Change
CAD $ millionsJune 27,
2021
June 28,
2020
As reportedForeign exchange impact
In constant currency(1)
As reported
In constant currency(1)
DTC29.4 10.4 19.0 0.4 19.4 182.7 %186.5 %
Wholesale25.8 8.7 17.1 0.1 17.2 196.6 %197.7 %
Other1.1 7.0 (5.9)— (5.9)(84.3)%(84.3)%
Total revenue56.3 26.1 30.2 0.5 30.7 115.7 %117.6 %
(1)Constant currency revenue is a non-IFRS financial measure. See “Non-IFRS Financial Measures” for a description of this measure.
DTC
Revenue from our DTC segment was $29.4m for the first quarter ended June 27, 2021 compared to $10.4m for the first quarter ended June 28, 2020. The increase of $19.0m was attributable to an increase in existing store sales, e-Commerce growth of 80.8% across all major markets and new retail expansion, despite continued store traffic headwinds. In the comparative quarter, the majority of our retail stores faced closures due to COVID-19 related disruptions. All of our stores in North America, Europe and certain countries in Asia Pacific were closed for the majority of the first quarter ended June 28, 2020, compared to partial closures, limited occupancy levels and reduced operating hours in Canada and Europe in the first quarter ended June 27, 2021.
Wholesale
Revenue from our Wholesale segment was $25.8m for the first quarter ended June 27, 2021 compared to $8.7m for the first quarter ended June 28, 2020. The increase of $17.1m was attributable to higher volume of shipments to our wholesale and international distributor partners. In the comparative quarter, there was a significant reduction in shipments due to COVID-19 disruptions to partner operations.
Other
Revenue from our Other segment was $1.1m, principally from sales to employees, for the first quarter ended June 27, 2021 compared to $7.0m for the first quarter ended June 28, 2020. The decrease of $5.9m was attributable to PPE sales in the comparative quarter, which were temporarily manufactured in support of COVID-19 response efforts.


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Revenue by geography
First quarter ended$ Change% Change
CAD $ millionsJune 27,
2021
June 28,
2020
As reportedForeign exchange impact
In constant currency(2)
As reported
In constant currency(2)
Canada10.4 11.6 (1.2)— (1.2)(10.3)%(10.3)%
United States9.1 2.5 6.6 0.3 6.9 264.0 %276.0 %
Asia Pacific22.4 10.0 12.4 0.1 12.5 124.0 %125.0 %
EMEA(1)
14.4 2.0 12.4 0.1 12.5 620.0 %625.0 %
Total revenue56.3 26.1 30.2 0.5 30.7 115.7 %117.6 %
(1)EMEA comprises Europe, the Middle East, Africa, and Latin America.
(2)Constant currency revenue is a non-IFRS financial measure. See “Non-IFRS Financial Measures” for a description of these measures.
Revenue increased across all regions except Canada for the first quarter ended June 27, 2021 compared to the comparative quarter resulting from an increase in both DTC and Wholesale revenue. Revenue in Canada grew by 126.1% excluding the $7.0m of PPE sales made in the comparative quarter. Including PPE, revenue in Canada decreased by 10.3%. The increase in revenue in all other regions was attributable to higher revenues due to lower COVID-19 related disruptions, e-Commerce growth in all major markets and the retail store expansion described above.
Gross Profit
Gross profit and gross margin for the first quarter ended June 27, 2021 were $30.7m and 54.5%, respectively, compared to $4.8m and 18.4%, respectively, for the first quarter ended June 28, 2020. The increase in gross profit was attributable to higher revenue as noted above. Gross profit in the comparative quarter included non-recurring PPE sales, manufacturing overhead costs during a period when production ceased due to COVID-19, and the benefit of a one-time duty recovery in the DTC segment. Excluding the impact of these items, gross margin was 43.1% in the comparative quarter. Gross margin in the current quarter reflected the greatest proportion of non-parka sales in categories which typically have slightly lower margins. This was more than fully offset by gross margin expansion across the segments in all categories from the comparative quarter.
First quarter ended
June 27,
2021
June 28,
2020
CAD $ millionsGross profitGross marginGross profit (loss)Gross margin$ Change% Change
DTC21.4 72.8 %8.6 82.7 %12.8 148.8 %
Wholesale9.1 35.3 %1.5 17.2 %7.6 506.7 %
Other0.2 18.2 %(5.3)(75.7)%5.5 103.8 %
Total gross profit30.7 54.5 %4.8 18.4 %25.9 539.6 %
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DTC
Gross profit in our DTC segment was $21.4m for the first quarter ended June 27, 2021 compared to $8.6m for the first quarter ended June 28, 2020. The increase in gross profit was attributable to higher revenues. Excluding the duty recovery of $1.7m relating to China shipments in the comparative quarter, gross margin for the first quarter ended June 28, 2020 was 66.3%. The increase in gross margin to 72.8% in the current quarter was driven by the favourable benefit of higher sales volumes from retail stores (+530 bps) and lower inventory provisions (+70 bps). For the first time in any quarter, non-parka sales represented 50% of revenue, while gross margin expanded in both parka and non-parka categories.
Wholesale
Gross profit in our Wholesale segment was $9.1m for the first quarter ended June 27, 2021 compared to $1.5m for the first quarter ended June 28, 2020. The $7.6m increase in gross profit was attributable to higher revenues. The increase in gross margin was driven by the favourable impact of a higher proportion of sales to our wholesale partners compared to international distributors, which represented the vast majority of sales in this segment in the comparative quarter (+1,470 bps). The incremental benefit from pricing was partially offset by unfavourable geographic mix while non-parka sales was approximately one third of revenue in this segment.
Other
Gross profit and gross margin in our Other segment were $0.2m and 18.2%, respectively, for the first quarter ended June 27, 2021 compared to gross loss and gross margin of $(5.3)m and (75.7)%, respectively, for the first quarter ended June 28, 2020. In response to COVID-19, the Company sold PPE with a gross profit and gross margin were $nil and 0%, respectively, in the comparative quarter. Gross profit and gross margin were affected by $4.3m (-230 bps) in overhead costs resulting from the temporary closure of our manufacturing facilities due to COVID-19 in the comparative quarter.
SG&A Expenses
SG&A expenses were $71.6m for the first quarter ended June 27, 2021 compared to $48.6m for the first quarter ended June 28, 2020. The increase of $23.0m or 47.3% was attributable to $3.6m in higher costs related to the retail store network expansion and the reopening of existing retail stores, $0.7m of higher costs related to e-Commerce volumes and increased investment in e-Commerce infrastructure, $3.6m of incremental investment in marketing and strategic initiatives, and $3.7m of unfavourable foreign exchange fluctuations related to working capital and the Term Loan Facility, net of hedge impacts. Costs also increased as a result of the recognition of $7.1m in COVID-19 related government payroll subsidies in the comparative quarter which did not recur.
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First quarter ended
June 27,
2021
June 28,
2020
CAD $ millionsReported % of segment revenueReported% of segment revenue$ Change% Change
DTC15.3 52.0 %9.6 92.3 %(5.7)(59.4)%
Wholesale7.9 30.6 %7.8 89.7 %(0.1)(1.3)%
Other48.4 31.2 (17.2)(55.1)%
Total SG&A expenses71.6 127.2 %48.6 186.2 %(23.0)(47.3)%
DTC
SG&A expenses in our DTC segment for the first quarter ended June 27, 2021 were $15.3m, or 52.0% of segment revenue, compared to $9.6m, or 92.3% of segment revenue, for the first quarter ended June 28, 2020. The increase of $5.7m was attributable to $2.9m of higher personnel costs and $0.7m of higher operating costs due to incremental new stores and the reopening of existing retail stores relative to the comparative quarter. Additionally there were $0.7m of higher costs related to e-Commerce volumes and increased investment in e-Commerce infrastructure. Costs also increased due to $1.2m of COVID-19 related government payroll subsidies in the comparative quarter which did not recur. COVID-19 related temporary store closure and pre-store opening costs of less than $0.1m and $0.3m, respectively, were recognized in the first quarter ended June 27, 2021 compared to temporary store closure and pre-store opening costs of $1.7m and $0.3m, respectively, in the comparative quarter.
Wholesale
SG&A expenses in our Wholesale segment for the first quarter ended June 27, 2021 were $7.9m, or 30.6% of segment revenue, compared to $7.8m, or 89.7% of segment revenue, for the first quarter ended June 28, 2020. The increase of $0.1m or 1.3% was attributable to $1.0m of higher freight costs driven by incremental volume in the quarter which was offset by the loss of $0.8m of COVID-19 related government payroll subsidies in the comparative quarter which did not recur.
Other
SG&A expenses in our Other segment, which include unallocated corporate expenses, were $48.4m for the first quarter ended June 27, 2021 compared to $31.2m for the first quarter ended June 28, 2020. The increase of $17.2m or 55.1% was attributable to $3.6m of incremental investment in marketing and strategic initiatives, $3.1m of higher performance-based compensation, and $3.7m of unfavourable foreign exchange fluctuations related to working capital and the Term Loan Facility, net of hedge impacts. Costs also increased due to $5.1m of government payroll subsidies recognized in the comparative quarter which did not recur.
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Depreciation and amortization
Depreciation and amortization was $19.8m for the first quarter ended June 27, 2021 compared to $15.5m for the first quarter ended June 28, 2020, an increase of $4.3m. Of the increase, $4.0m was driven by continued retail store expansion as well as information technology-related expenditures to support growth. Depreciation expense on right-of-use assets of $0.6m and $0.2m was related to pre-store opening costs and COVID-19 temporary store closures, respectively, in the first quarter ended June 27, 2021 compared to $0.6m and $3.8m of pre-store opening costs and COVID-19 temporary store closures, respectively, in the first quarter ended June 28, 2020.
First quarter ended
June 27,
2021
June 28,
2020
CAD $ millionsReportedReported$ Change% Change
DTC15.2 11.2 (4.0)(35.7)%
Wholesale1.0 0.9 (0.1)(11.1)%
Other3.6 3.4 (0.2)(5.9)%
Total depreciation and amortization19.8 15.5 (4.3)(27.7)%
Operating Loss and Margin
Operating loss and operating margin were $(60.7)m and (107.8)% for the first quarter ended June 27, 2021 compared to $(59.3)m and (227.2)% for the first quarter ended June 28, 2020. The increase in operating loss was attributable to higher operating costs, partially offset by higher gross profit.
First quarter ended
June 27,
2021
June 28,
2020
CAD $ millionsOperating income (loss)Operating marginOperating income (loss)Operating margin$ Change% Change
DTC(9.1)(31.0)%(12.2)(117.3)%3.1 25.4 %
Wholesale0.2 0.8 %(7.2)(82.8)%7.4 102.8 %
Other(51.8)(39.9)(11.9)(29.8)%
Total operating loss(60.7)(107.8)%(59.3)(227.2)%(1.4)(2.4)%
DTC
DTC segment operating loss was $(9.1)m for the first quarter ended June 27, 2021 compared to $(12.2)m for the first quarter ended June 28, 2020. The decrease in operating loss and increase in operating margin of $3.1m and 86.3%, respectively, were attributable to improved sales volumes from reduced COVID-19 impacts globally and the growth in e-Commerce revenues of 80.8%. This was partially offset by higher personnel and operating costs due to incremental new stores and increased overall store activity relative to the comparative quarter. Pre-store opening costs and COVID-19 related temporary store closure costs of $0.9m and $0.2m, respectively, were recognized in the first quarter of fiscal 2022 compared to pre-store opening costs and
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COVID-19 related temporary store closure costs of $0.9m and $5.5m, respectively, in the comparative quarter.
Wholesale
Wholesale segment operating income was $0.2m for the first quarter ended June 27, 2021 compared to operating loss of $(7.2)m for the first quarter ended June 28, 2020. The increase in operating income and operating margin of $7.4m and 83.6%, respectively, were attributable to a higher segment revenue and gross profit.
Other
Other segment operating loss was $(51.8)m for the first quarter ended June 27, 2021 compared to $(39.9)m for the first quarter ended June 28, 2020. The increase in operating loss of $11.9m was attributable to $17.2m of higher SG&A expenses as discussed above, partially offset by $4.3m of overhead costs resulting from the temporary closure of our manufacturing facilities due to COVID-19 in the comparative quarter.
Net Interest, Finance and Other Costs
Net interest, finance and other costs were $16.5m for the first quarter ended June 27, 2021 compared to $6.7m for the first quarter ended June 28, 2020. The increase of $9.8m was driven by the acceleration of unamortized costs of $9.5m in connection with the Repricing Amendment (as defined below) on the Term Loan Facility and higher interest charges of $2.5m on the Term Loan Facility due to higher gross borrowings from the comparative quarter and a higher average interest rate, partially offset by corporate restructuring costs of $1.6m incurred in the comparative quarter and lower borrowings under the Revolving Facility.
Income Taxes
Income tax recovery was $20.5m for the first quarter ended June 27, 2021 compared to $15.9m for the first quarter ended June 28, 2020. For the first quarter ended June 27, 2021, the effective and statutory tax rates were 26.6% and 25.4%, respectively, compared to 24.1% and 25.4% for the first quarter ended June 28, 2020, respectively. Given our global operations, the effective tax rate is largely impacted by our profit or loss in taxable jurisdictions relative to the applicable tax rates.
Net Loss
Net loss for the first quarter ended June 27, 2021 was $(56.7)m compared to $(50.1)m for the first quarter ended June 28, 2020, driven by the factors described above.
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Quarterly Financial Information
The following is a summary of selected consolidated financial information for each of the eight most recently completed quarters:
Fiscal 2022Fiscal 2021Fiscal 2020
CAD $ millions (except per share data)
First QuarterFourth QuarterThird QuarterSecond QuarterFirst QuarterFourth QuarterThird QuarterSecond Quarter
Revenue
DTC29.4 172.2 299.4 46.2 10.4 114.2 301.8 74.2 
Wholesale25.8 33.3 160.8 118.5 8.7 25.0 145.3 218.1 
Other1.1 3.3 13.8 30.1 7.0 1.7 5.0 1.7 
Total56.3 208.8 474.0 194.8 26.1 140.9 452.1 294.0 
% of fiscal year revenue— %23.1 %52.5 %21.6 %2.9 %14.7 %47.2 %30.7 %
Net (loss) income(56.7)2.9 107.0 10.4 (50.1)2.5 118.0 60.6 
(Loss) earnings per share
Basic$(0.51)$0.03 $0.97 $0.09 $(0.46)$0.02 $1.08 $0.55 
Diluted$(0.51)$0.03 $0.96 $0.09 $(0.46)$0.02 $1.07 $0.55 
Adjusted EBIT(1)
(60.2)5.4 157.9 15.7 (46.5)(9.7)163.8 79.2 
Adjusted net (loss) income per diluted share(1)
$(0.45)$0.01 $1.01 $0.10 $(0.35)$(0.12)$1.08 $0.57 
(1)See “Non-IFRS Financial Measures” for a description of these measures and a reconciliation to the nearest IFRS measure.
Revenue in our wholesale segment is highest in our second and third quarters as we fulfill wholesale customer orders in time for the Fall and Winter retail seasons, and, in our DTC segment, in the third and fourth quarters. Our net income is typically negative in the first quarter and reduced in the fourth quarter as we invest ahead of our peak season.
Revenue
Over the last eight quarters, revenue has been impacted by the following:
the COVID-19 pandemic beginning in the fourth quarter of fiscal 2020;
timing of store openings;
launch and expansion of international e-Commerce sites;
timing and extent of demand generation activities, including in-channel marketing;
increased manufacturing flexibility through a shift to in-house production, which has an impact on the timing of wholesale order shipments and customer demand;
timing of end-consumer purchasing in the DTC segment and the availability of new products;
successful execution of global pricing strategy;
shift in mix of revenue from wholesale to DTC, which has impacted the seasonality of our financial performance;
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shift in geographic mix of sales to increase sales outside of Canada;
fluctuation of foreign currencies relative to the Canadian dollar;
political disruptions in Hong Kong beginning in June 2019;
protests in many North American cities beginning in the first quarter of fiscal 2021; and
PPE production beginning in the first quarter through to the third quarter of fiscal 2021.
Net (Loss) Income
Over the last eight quarters, net (loss) income has been affected by the following factors:
impact of the items affecting revenue, as discussed above;
costs incurred and relief received from government programs as a result of the COVID-19 pandemic beginning in the fourth quarter of fiscal 2020;
increase and timing of our investment in brand, marketing, and administrative support as well as increased investment in property, plant, and equipment and intangible assets to support growth initiatives;
increase in fixed SG&A costs associated with our business, particularly the headcount growth and premises costs associated with our expanding DTC channel, resulting in negative and reduced net income in our seasonally low-revenue first and fourth quarters, respectively;
impact of foreign exchange;
fluctuations in average cost of borrowings to address growing net working capital requirements and higher seasonal borrowings in the first and second quarters of each fiscal year to address the seasonal nature of revenue;
pre-store opening costs incurred, timing of leases signed, and opening of stores;
the nature and timing of transaction costs in connection with secondary offerings of shares, the Baffin acquisition, and amendments to long-term debt agreements; and
the proportion of taxable income in non-Canadian jurisdictions and changes to rates and tax legislation in those jurisdictions.
NON-IFRS FINANCIAL MEASURES
The Company uses certain non-IFRS financial measures in this document and other documents, including EBIT, adjusted EBIT, adjusted EBIT margin, EBITDA, adjusted EBITDA, adjusted net income (loss), adjusted net income (loss) per basic and diluted share, constant currency revenue, net debt, net debt leverage, net working capital, net working capital turnover, and free operating cash flow. 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
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calculate these measures differently than we do, limiting their usefulness as comparative measures.
First quarter ended
CAD $ millions (except per share data)June 27,
2021
June 28,
2020
EBIT(60.7)(59.3)
Adjusted EBIT(60.2)(46.5)
Adjusted EBIT margin(106.9)%(178.2)%
EBITDA(37.2)(40.5)
Adjusted EBITDA(37.5)(32.1)
Adjusted net loss(50.0)(38.4)
Adjusted net loss per basic and diluted shares$(0.45)$(0.35)
Free operating cash flow(171.7)(83.2)
CAD $ millions June 27,
2021
June 28,
2020
March 28,
2021
Net debt(333.5)(437.4)(154.2)
Net working capital311.3 352.0 202.1 
EBIT, adjusted EBIT, adjusted EBIT margin, EBITDA, adjusted EBITDA, adjusted net loss, and adjusted net loss per basic and diluted share
These non-IFRS measures exclude the impact of certain non-cash items and certain other adjustments related to events that are non-recurring or unusual in nature, including the COVID-19 pandemic, that we believe are not reflective of our ongoing operations and that make comparisons of underlying financial performance between periods difficult. We use, and believe that certain investors and analysts use, this information to evaluate our core financial and operating performance for business planning purposes, as well as to analyze how our business operates in, or responds to, swings in economic cycles or to other events that impact the apparel industry.
For the first quarter ended June 27, 2021, we believe that identifying certain costs directly resulting from the impact of the COVID-19 pandemic and excluding these amounts from our calculation of the non-IFRS measures described above helps management and investors assess the impact of COVID-19 on our business as well as our general economic performance during the period. For the first quarter ended June 27, 2021, these primarily comprised of temporary store closure costs including depreciation and interest expenses. These were partially offset by rent concessions recognized during the period.
Constant currency revenue
Constant currency revenue is calculated by translating the prior year reported amounts into comparable amounts using a single foreign exchange rate for each currency calculated based on the current period exchange rates. We use, and believe that certain investors and analysts use, this information to assess how our business and geographic segments performed excluding the effects of foreign currency exchange rate fluctuations. See the Revenue section of
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the “Results of Operations” for a reconciliation of reported revenue and revenue on a constant currency basis.
Net debt and net debt leverage
We define net debt as total indebtedness, net of cash, and net debt leverage as the ratio of net debt to adjusted EBITDA, measured on a spot basis. We use, and believe that certain investors and analysts use, these non-IFRS financial measures to determine the Company’s financial leverage and ability to meet its debt obligations. See “Financial Condition, Liquidity and Capital Resources - Indebtedness” below for a table providing the calculation of net debt and discussion of net debt leverage.
Net working capital and net working capital turnover
We define net working capital as current assets, net of cash, minus current liabilities, excluding the short-term borrowings and current portion of lease liabilities. Net working capital turnover is the ratio of average net working capital to revenue, by averaging net working capital for each quarter. We use, and believe that certain investors and analysts use, this information to assess the Company’s liquidity and management of net working capital resources. See “Financial Condition, Liquidity and Capital Resources” below for a table providing the calculation of net working capital.
Free operating cash flow
We define free operating cash flow as net cash flows from (used in) operating activities plus net cash flows from (used in) investing activities, minus principal payments on lease liabilities. We use, and believe that certain investors and analysts use, this information to assess the Company’s financial leverage and cash available for repayment of borrowings and other financing activities and as an indicator of operational financial performance. See “Cash Flows” below for a table providing the free operating cash flow balance for the quarter.

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The tables below reconcile net income to EBIT, adjusted EBIT, EBITDA, adjusted EBITDA, and adjusted net loss 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.