UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 20-F
(Mark One)
☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE
ACT OF 1934
OR
☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended April 3, 2022
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the transition period from to
OR
☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
Date of event requiring this shell company report
Commission file number 001-38027
CANADA GOOSE HOLDINGS INC.
(Exact name of Registrant as specified in its charter)
N/A
(Translation of Registrant’s name into English)
British Columbia
(Jurisdiction of incorporation or organization)
250 Bowie Ave
Toronto, Ontario, Canada M6E 4Y2
(Address of principal executive offices)
David M. Forrest
General Counsel
250 Bowie Ave
Toronto, Ontario, Canada M6E 4Y2
Tel: (416) 780-9850
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(Name, telephone, email and/or facsimile number and address of Company contact person)
Securities registered or to be registered pursuant to Section 12(b) of the Act:
Title of each class
Subordinate voting shares
Trading Symbol(s)
GOOS
Name of each exchange on which
registered
New York Stock Exchange
Title of each class
Subordinate voting shares
Name of each exchange on which registered
New York Stock Exchange
Securities registered or to be registered pursuant to Section 12(g) of the Act:
None
(Title of Class)
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:
None
(Title of Class)
Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period
covered by the Annual Report: At April 3, 2022, 54,190,432 subordinate voting shares and 51,004,076 multiple voting shares
were issued and outstanding.
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ☒ Yes ☐
No
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934. ☐ Yes ☒ No
Note—checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 from their obligations under those sections.
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every
Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter)
during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). ☒ Yes
☐ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an
emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” and “emerging growth company”
in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer ☒ Accelerated Filer ☐ Non-Accelerated Filer ☐ Emerging growth company ☐
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if
the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards† provided pursuant to Section 13(a) of the Exchange Act. ☐
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† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards
Board to its Accounting Standards Codification after April 5, 2012.
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the
effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b))
by the registered public accounting firm that prepared or issued its audit report. ☒
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this
filing:
U.S. GAAP ☐
International Financial Reporting Standards as issued by the
International Accounting Standards Board ☒
Other ☐
If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the
registrant has elected to follow. ☐ Item 17 ☐ Item 18
If this is an Annual Report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act). ☐ Yes ☒ No
(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d)
of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. ☐ Yes ☐
No
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Canada Goose Holdings Inc.
Table of Contents
INTRODUCTION
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
PART I
ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE
ITEM 3. KEY INFORMATION
ITEM 4. INFORMATION ON THE COMPANY
ITEM 4A. UNRESOLVED STAFF COMMENTS
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS
ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
ITEM 8. FINANCIAL INFORMATION
ITEM 9. THE OFFER AND LISTING
ITEM 10. ADDITIONAL INFORMATION
ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
PART II
ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
ITEM 15. CONTROLS AND PROCEDURES
ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT
ITEM 16B. CODE OF ETHICS
ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES
ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT
ITEM 16G. CORPORATE GOVERNANCE
ITEM 16H. MINE SAFETY DISCLOSURE
ITEM 16I. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
PART III
ITEM 17. FINANCIAL STATEMENTS
ITEM 18. FINANCIAL STATEMENTS
ITEM 19. EXHIBITS
EXHIBIT INDEX
SIGNATURES
FINANCIAL STATEMENTS
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INTRODUCTION
Unless otherwise indicated, all references in this Annual Report on Form 20-F to “Canada Goose,” “we,” “our,” “us,” “the
company” or similar terms refer to Canada Goose Holdings Inc. and its consolidated subsidiaries. We publish our consolidated
financial statements in Canadian dollars. In this Annual Report, unless otherwise specified, all monetary amounts are in
Canadian dollars, all references to “$,” “C$,” “CDN$,” “CAD$,” and “dollars” mean Canadian dollars and all references to “US$”
and “USD” mean U.S. dollars.
This Annual Report on Form 20-F contains our audited consolidated financial statements and related notes for the years ended
April 3, 2022, March 28, 2021 and March 29, 2020 (“Annual Financial Statements”). Our Annual Financial Statements have
been prepared in accordance with International Financial Reporting Standards (“IFRS”), as issued by the International
Accounting Standards Board (“IASB”).
Our 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 for a 52-week fiscal year. 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, and the additional week was added to the third quarter ended
January 2, 2022.
Unless otherwise indicated in this Annual Report, all references to: "fiscal 2020" are to the 52-week period ended March 29,
2020; "fiscal 2021" are to the 52-week period ended March 28, 2021; and "fiscal 2022" are to the 53-week period ended April 3,
2022.
As described herein, certain comparative figures have been reclassified to conform with the fiscal 2022 presentation.
Trademarks and Service Marks
This Annual Report contains references to a number of trademarks which are our registered trademarks or trademarks for
which we have pending applications or common law rights. Our major trademarks include the CANADA GOOSE word mark and
the ARCTIC PROGRAM & DESIGN trademark (our disc logo consisting of the colour-inverse design of the North Pole and
Arctic Ocean) as well as the BAFFIN word mark and BAFFIN Half Maple Leaf design trademark.
Solely for convenience, the trademarks, service marks and trade names referred to in this Annual Report are listed without the
®, (sm) and (TM) symbols, but we will assert, to the fullest extent under applicable law, our rights or the rights of the applicable
licensors to these trademarks, service marks and trade names.
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CAUTIONARY NOTE REGARDING FORWARD‑LOOKING STATEMENTS
This Annual Report 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 Annual Report 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 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 Annual Report include:
•
•
•
•
•
•
our ability to continue operating our business amid the societal, political and economic disruption caused by the novel
coronavirus pandemic (“COVID-19”) and recent and ongoing geopolitical events;
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.
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 this 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 and geopolitical events, which may
further affect general economic and operating conditions;
additional potential closures or retail traffic disruptions impacting our retail stores and the retail stores of our
wholesale partners as a result of COVID-19;
• we may not open 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;
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•
•
our indebtedness may adversely affect our financial condition;
an economic downturn and general economic conditions (for example, inflation and rising interest rates) may further
affect discretionary consumer spending;
• we may not be able to satisfy changing consumer preferences;
•
•
•
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 needs and to manage our product distribution networks;
• we may not be able to protect or preserve our brand image and proprietary rights;
•
•
•
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 Annual Report 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 Annual Report. Additional impacts may arise that we are not aware of currently.
The potential of such additional impacts intensifies the business and operating risks that we face, and should be considered
when reading the forward-looking statements contained in this Annual Report. In addition, even if results and developments are
consistent with the forward-looking statements contained in this Annual Report, 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
Annual Report may prove to be inaccurate. We have included important factors in the cautionary statements included in this
Annual Report on Form 20-F, particularly in Section 3.D of this Annual Report on Form 20-F titled “Risk Factors”, that we believe
could cause actual results or events to differ materially from the forward-looking statements that we make. 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 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 Annual Report and the documents that we reference herein and have filed as exhibits hereto 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 Annual Report, and we do not assume any obligation to update
any forward-looking statements except as required by applicable laws.
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PART I
ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
Not applicable.
ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE
Not applicable.
ITEM 3. KEY INFORMATION
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A. [Reserved]
B. Capitalization and Indebtedness
Not applicable.
C. Reasons for the Offer and Use of Proceeds
Not applicable.
D. Risk Factors
Risks Related to our Business
Our business has been and may continue to be adversely affected by the global coronavirus outbreak.
Our global operations, and those of the third parties upon whom we rely, have experienced and may continue to experience
disruptions from the outbreak of COVID-19. To date, they have included mandatory and elective shut-downs of retail and
manufacturing operations, a decrease in domestic and international retail traffic, and a decrease in the capacity of our network,
including in our facilities, due to distancing measures required, reductions in operating hours and limited occupancy levels. The
countries in which our products are manufactured, distributed or sold are in varying stages of restrictions and reopening in
response to COVID-19. Certain jurisdictions have begun reopening following precautionary measures while other jurisdictions
have returned to further restrictions and closures in the face of a rising number of COVID-19 cases. There is significant
uncertainty and we anticipate that we will continue to have material adverse impacts on our business, financial condition and
results of operations as a result of the global COVID-19 pandemic.
These and other potential impacts make it more challenging for management to estimate the future performance of our
business. While we cannot predict the specific impacts to our business, financial condition and results of operations, we do
expect such impacts to continue to be significantly negative. These impacts will depend on future developments, which are
highly uncertain and out of our control, including, among others, the duration and intensity of the COVID-19 pandemic, the
introduction of new variants and mutations, the continued efficacy of vaccination programs, the subsequent resumption of all
business operations and the full recovery of retail traffic globally.
Additional impacts may arise that we are not aware of currently. The potential of such additional impacts intensifies the business
and operating risks that we face, and should be considered when reading the additional risk factors below.
A downturn in the global economy, including as a result of recent geopolitical events, general economic conditions
such as inflation, and the COVID-19 outbreak worldwide, will likely affect or has substantially affected and will likely
continue to affect, consumer purchases of discretionary items, which could materially harm our sales, profitability and
financial condition.
Our sales are significantly affected by changes in discretionary spending by consumers. Many factors outside our control
influence and affect the level of consumer spending for discretionary items. These factors include actual and perceived
economic conditions, interest and tax rates, inflation, energy prices, the availability of consumer credit, disposable consumer
income, unemployment and consumer confidence in future economic conditions. Consumer purchases of discretionary items,
such as our outerwear, tend to decline during recessionary periods when
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disposable income is lower. During our history, we have experienced recessionary periods, but we cannot predict the effect of
future recessionary periods on our sales and profitability. A downturn in the economy in markets in which we sell our products or
unfavourable changes related to interest rates, rates of economic growth, fiscal and monetary policies of governments, inflation,
deflation, tax rates and policy, unemployment trends, energy prices, and other matters that influence the availability and cost of
merchandise, consumer confidence or spending may materially harm our sales, profitability and financial condition.
Recent geopolitical events and general economic conditions, such as rising inflation, has led to a slow-down in certain segments
of the global economy and affected the amount of discretionary income available for certain consumers to purchase our
products. If global economic and financial market conditions persist, our sales could decrease, and our financial condition and
results of operations could be adversely affected. Unstable political conditions, civil unrest, armed conflicts or events of extreme
violence, including the ongoing conflict and any escalation thereof between Russia and Ukraine, may disrupt commerce globally
and could negatively affect our business and results of operations.
Our growth strategy continues to involve expansion of our Direct-to-Consumer (“DTC”) channel, including retail stores
and e-Commerce, which may present risks and challenges.
Our business has continued to evolve from one in which we only distributed products on a wholesale basis for resale by others
to a multi-channel distribution model. As of April 3, 2022, our DTC channel includes 56 national e-Commerce markets and 41
directly operated permanent retail stores across North America, Europe, and Asia Pacific. While store operations have largely
resumed over fiscal 2022 across our global store network, retail store traffic remains below pre-pandemic levels as at April 3,
2022. Furthermore, some jurisdictions in which we operate are facing a rising number of COVID-19 cases, which has led or may
lead to further closures and reduced operating hours. As of April 3, 2022, 5 of our 41 directly operated permanent retail stores
globally were temporarily closed. Our global DTC expansion has been the largest driver of operational and financial growth
historically. We expect this to continue in the future.
Growing our e-Commerce platforms and number of retail stores is essential to our future strategy. This strategy has and will
continue to require significant investment in cross-functional operations and management focus, along with investment in
supporting technologies and retail store spaces. If we are unable to provide a user-friendly, convenient and consistent
experience for our customers, our ability to compete and our results of operations could be adversely affected. In addition, if our
e-Commerce platforms or retail store formats do not appeal to our customers, reliably function as designed, or maintain the
privacy of customer data, or if we are unable to consistently meet our brand promise to our customers, we may experience a
loss of customer confidence or lost sales, or be exposed to fraudulent purchases, which could adversely affect our reputation
and results of operations.
To the extent our e-Commerce business grows, we will need an increasing amount of IT infrastructure to continue to satisfy
consumer demand and expectations. If we fail to effectively scale and adapt our e-Commerce platform to accommodate
increased consumer demand, our business may be subject to interruptions, delays or failures and consumer demand for our
products and digital experiences could decline. Our failure to successfully respond to these risks might adversely affect sales
and order flow in our e-Commerce business, as well as adversely impact our reputation and brand.
Furthermore, with our increasing retail footprint, lower profitability levels at new or existing retail stores will adversely affect our
margins.
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We are also subject to different and evolving local laws and regulatory requirements in the various jurisdictions in which we
operate. In particular, we are subject to different and evolving laws and orders governing social distancing related to the COVID-
19 pandemic, the operation and marketing of e-Commerce websites, as well as the collection, storage and use of information on
consumers interacting with those websites. We may incur additional costs and operational challenges in complying with these
laws, and differences in these laws may cause us to operate our businesses differently in different territories. If so, we may incur
additional costs and may not fully realize the investment in our global DTC expansion.
Our business depends on our strong brand, and if we are not able to maintain and enhance our brand we may be
unable to sell our products, which would adversely affect our business.
The Canada Goose name and brand image are integral to the growth of our business, and to the implementation of our
strategies for expanding our business. We believe that the brand image we have developed has significantly contributed to the
success of our business and is critical to maintaining and expanding our customer base. Maintaining and enhancing our brand
may require us to make substantial investments in areas such as product design, store openings and operations, marketing, e-
Commerce, community relations and employee training, and these investments may not be successful.
We anticipate that, as our business continues to expand into new markets and new product categories and as the market
becomes increasingly competitive, maintaining and enhancing our brand may become difficult and expensive. Conversely, as
we penetrate these new markets and our brand becomes more widely available, it could potentially detract from the appeal
stemming from the scarcity of our brand. Our brand may also be adversely affected if our public image or reputation is tarnished
by negative publicity. In addition, ineffective marketing, product diversion to unauthorized distribution channels, product defects,
counterfeit products, unfair labour practices, and failure to protect the intellectual property rights in our brand are some of the
potential threats to the strength of our brand, and those and other factors could rapidly and severely diminish consumer
confidence in us. Maintaining and enhancing our brand will depend largely on our ability to be a leader in our industry and to
continue to offer a range of high quality products to our customers, which we may not execute successfully. Any of these factors
could harm our sales, profitability or financial condition.
A key element of our growth strategy is expansion of our product offerings into new product categories. We may be
unsuccessful in designing products that meet our customers’ expectations for our brand or that are attractive to new customers.
If we are unable to anticipate customer preferences or industry changes, or if we are unable to modify our products on a timely
basis or expand effectively into new product categories, we may lose customers or fail to gain new customers. Our ability to
successfully implement our growth strategy may be affected by the continuing impacts of the COVID-19 pandemic, such as
periods of mandatory store closures and voluntary or mandated social distancing, and global economic contraction, including as
a result of ongoing geopolitical uncertainty. As we expand into new geographic markets, consumers in these new markets may
be less compelled by our brand image and may not be willing to pay a higher price to purchase our products as compared to
traditional outerwear. Our operating results would also suffer if our investments and innovations do not anticipate the needs of
our customers, are not appropriately timed with market opportunities or are not effectively brought to market.
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Because our business is concentrated on a single, discretionary product category, outerwear, we are vulnerable to
changes in consumer preferences that could harm our sales, profitability and financial condition.
In fiscal 2022, our main product category, outerwear represented the majority of our sales. Consumer preferences often change
rapidly. Therefore, our business is substantially dependent on our ability to attract customers who are willing to pay a premium
for our products. Any future shifts in consumer preferences away from spending for our products would also have a material
adverse effect on our results of operations.
In addition, we believe that continued increases in sales of outerwear will largely depend on customers continuing to demand
technical superiority from their products. If the number of customers demanding outerwear does not continue to increase, or if
our customers are not convinced that our products are more functional or stylish than other outerwear alternatives, we may not
achieve the level of sales necessary to support new growth platforms and our ability to grow our business will be severely
impaired.
Our indebtedness could adversely affect our financial condition.
As of April 3, 2022, we had $191.8m of unused commitments under our Revolving Facility (as defined below) and no principal
borrowings outstanding, $370.8m of term loans under our Term Loan Facility (as defined below), and no amounts owing under
the Mainland China Facilities (as defined below) for total indebtedness of $370.8m. As at April 3, 2022, cash on hand was
$287.7m (March 28, 2021 - $477.9m). We also generally experience significant fluctuations in our aggregate indebtedness and
working capital over our operating cycle due to the seasonality in our business. Our debt could have important consequences,
including:
•
•
•
•
•
limiting our ability to obtain additional financing to fund future working capital, capital expenditures, acquisitions or other
general corporate requirements and increasing our cost of borrowing;
requiring a portion of our cash flow to be dedicated to debt service payments instead of other purposes, thereby reducing
the amount of cash flow available for working capital, capital expenditures, acquisitions and other general corporate
purposes;
requiring the net cash proceeds of certain equity offerings to be used to prepay our debt as opposed to being applied for
other purposes;
exposing us to the risk of increased interest rates as certain of our borrowings, including borrowings under our senior
secured credit facilities, are at variable rates of interest; and
limiting our flexibility in planning for and reacting to changes in the industry in which we compete.
The credit agreements governing our senior secured credit facilities contain a number of restrictive covenants that impose
operating and financial restrictions on us, including restrictions on our ability to incur certain liens, make investments and
acquisitions, incur or guarantee additional indebtedness, pay dividends or make other distributions in respect of, or repurchase
or redeem our shares, or enter into certain other types of contractual arrangements affecting our subsidiaries or indebtedness.
In addition, the restrictive covenants in the credit agreement governing our Revolving Facility require us to maintain a minimum
fixed charge coverage ratio if excess availability under our Revolving Facility falls below a specified threshold.
If we are unable to comply with these restrictions and covenants at times and to the extent they are applicable, including as a
result of events beyond our control, we may risk an event of default under the credit facilities, which could accelerate the
payment of any amounts then due, and limit our ability to incur future borrowings under the credit facilities, either of which could
have a material adverse effect on our business.
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Although the credit agreements governing our senior secured credit facilities contain restrictions on the incurrence of additional
indebtedness, those restrictions are subject to a number of qualifications and exceptions and the additional indebtedness
incurred in compliance with those restrictions could be substantial. We may also seek to amend or refinance one or more of our
debt instruments to permit us to finance our growth strategy or improve the terms of our indebtedness.
We operate in a highly competitive market and the size and resources of some of our competitors may allow them to
compete more effectively than we can, resulting in a loss of our market share and a decrease in our revenue and
profitability.
The market for outerwear is highly fragmented. We compete against a wide range of brands and retailers. Many of our
competitors have significant competitive advantages, including larger and broader customer bases, more established
relationships with a broader set of suppliers, greater brand recognition, larger product offering, greater financial resources, more
established research and development processes, a longer history of store development, greater marketing resources, more
established distribution processes, and other resources which we do not have.
Our competitors may be able to achieve and maintain brand affinity and market share more quickly and effectively than we can.
Our competitors may also be able to increase sales in their new and existing markets faster than we can by emphasizing
different distribution channels than we can. If we fail to compete with such competitors, our business, financial condition and
performance could be materially adversely affected.
If we are unable to manage our operations at our current size or to manage any future growth effectively, the pace of
our growth may slow.
The countries in which our products are made, manufactured, distributed or sold are in varying stages of restrictions and
reopening in response to COVID-19. Until all restrictions, regulations and recommended precautions imposed by local
authorities globally are lifted we may continue to experience material adverse impacts on our business, financial condition and
results of operations as a result of the global COVID-19 pandemic. If our operations continue to grow, of which there can be no
assurance, we will be required to continue to expand our sales and marketing, product development, manufacturing and
distribution functions, to upgrade our management information systems and other processes, and to obtain more space for our
expanding administrative support and other personnel. Continued or fluctuating growth could strain our resources, and we could
experience operating difficulties, including difficulties in hiring, training and managing an increasing number of employees and
manufacturing capacity to produce our products, and delays in production and shipments. These difficulties may result in the
erosion of our brand image, divert the attention of management and key employees and impact financial and operational results.
In order to continue to expand our DTC channel, we expect to add selling, general & administrative (“SG&A”) expenses and
depreciation and amortization expenses to our cost base. These costs, which include lease commitments, headcount and
capital assets, could result in decreased margins if we are unable to drive commensurate DTC revenue growth.
Our financial performance is subject to significant seasonality and variability, which could cause the price of our
subordinate voting shares to decline.
Our business is affected by a number of factors common to our industry and by other factors specific to our business model,
which drive seasonality and variability. Historically, key metrics, including those related to our growth, profitability and financial
condition, have fluctuated significantly across fiscal periods. We expect this to continue in the future.
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Consumer purchases of outerwear are heavily concentrated in the Fall / Winter season. As a result, the majority of our DTC
revenue is recognized in the third and fourth fiscal quarter. Our wholesale revenue is weighted earlier in the second and third
fiscal quarters, when most orders are shipped to wholesale partners in time for the Fall/Winter season. Our net income is
typically negative in the first quarter and reduced or negative in the fourth quarter.
Guided by expected demand in both channels, we manufacture on a linear basis throughout the fiscal year, while adding
capacity where relevant to our manufacturing network, resulting in the buildup and staging of inventory for future periods. These
dynamics cause significant fluctuations in our working capital, cash conversion, and leverage throughout the fiscal year. At
certain points in time, our inventory has increased at a significantly higher rate than our historical revenue growth in the same
period.
Historical results, especially comparisons across fiscal quarters, should not be considered indicative of the results to be
expected for any future periods. In addition to the seasonality of demand for our products, our financial performance is
influenced by a number of factors which are difficult to predict and variable in nature. These include input cost volatility, the
timing of consumer purchases and wholesale deliveries which very often shift between fiscal quarters, demand forecast
accuracy, inventory availability and the evolution of our channel mix, as well as external trends in weather, traffic and
discretionary consumer spending.
A number of other factors which are difficult to predict could also affect the seasonality or variability of our financial performance.
Therefore, you should not rely on the results of a single fiscal quarter as an indication of our annual results or future
performance.
If we fail to attract enough new customers, we may not be able to increase sales.
Our success depends, in part, on our ability to attract new customers. In order to expand our customer base, we must appeal to
and attract consumers who identify with our brand and products. We have made significant investments in enhancing our brand
and attracting new customers. We expect to continue to make significant investments to promote our current products to new
customers and new products to current and new customers, including through our e-Commerce platforms and retail store
presence. Such marketing investments can be expensive and may not result in increased sales. Further, as our brand becomes
more widely known, we may not attract new customers as we have in the past. If we are unable to attract enough new
customers, we may not be able to increase our sales.
Our sales and results of operations could be adversely affected by our decision to go fur-free.
In fiscal 2022, we announced that we were going fur-free and committed to cease manufacturing with fur by no later than the
end of 2022. As a result of this decision, we may lose some of our existing customers or they could choose to buy fewer
products. We may also fail to attract enough existing or new customers to purchase our other fur-free products. Even if we
expand our product offering and manufacture products that are attractive to our customers, there is no guarantee we will be able
to fully convert our fur-product sales into fur-free product sales. If we are unable to replace fur product sales with fur-free sales, if
we are unable to sell leftover inventory with fur and/or if we are required to write down inventory as a result of this decision, our
sales and results from operations may be adversely affected.
Our business may be adversely affected by global climate trends.
A significant portion of our business is highly dependent on cold-weather seasons and patterns to generate consumer demand
for our products. Consumer demand for our products may be negatively affected to the extent global climate patterns trend
warmer, reducing typical patterns
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of cold-weather events or increasing weather volatility, which could have an adverse effect on our financial condition, results of
operations or cash flows.
Our plans to improve and expand our product offerings may not be successful, and implementation of these plans may
divert our operational, managerial and administrative resources, which could harm our competitive position and
reduce our revenue and profitability.
In addition to our global DTC expansion plans, we are growing our business by expanding our product offerings outside down-
filled jackets, including windwear, rainwear, apparel, fleece, accessories and footwear. The principal risks to our ability to
successfully carry out our plans to expand our product offering include:
•
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the success of new products and new product lines will depend on market demand and there is a risk that new
products and new product lines will not deliver expected results, which could negatively impact our future sales and
results of operations;
if our expanded product offerings fail to maintain and enhance our distinctive brand identity, our brand image may be
diminished and our sales may decrease;
implementation of these plans may divert management’s attention from other aspects of our business and place a
strain on our management, operational and financial resources, as well as our information systems; and
incorporation of novel materials or features into our products may not be accepted by our customers or may be
considered inferior to similar products offered by our competitors.
In addition, our ability to successfully carry out our plans to expand our product offerings may be affected by economic and
competitive conditions, changes in consumer spending patterns (including reductions in discretionary consumer spending as a
result of geopolitical events or general economic downturns) and changes in consumer preferences and styles. These plans
could be abandoned, could cost more than anticipated and could divert resources from other areas of our business, any of
which could negatively impact our competitive position and reduce our revenue and profitability.
Unexpected obstacles in new markets may limit our expansion opportunities and cause our business and growth to
suffer.
Our growth strategy has led to our expansion into markets outside of North America, including in developing markets. There are
varying regulatory environments and market practices in these regions, and such regulations may be unfamiliar to us and we
may experience unexpected barriers. It may take us time to penetrate or successfully operate in any new market. In connection
with our expansion efforts we may encounter obstacles, including cultural and linguistic differences, differences in regulatory
environments, economic or governmental instability, labour practices and market practices, difficulties in keeping abreast of
market, business and technical developments, and foreign customers’ tastes and preferences. In developing markets, potential
challenges include relatively higher risk of political instability, economic volatility, crime, corruption and social unrest. Such
challenges may be exacerbated in many cases by uncertainties regarding how local law is applied and enforced, and with
respect to judiciary and administrative mechanism. Furthermore, global events such as pandemics, the related governmental,
private sector and individual and collective consumer responsive actions and any subsequent waves of outbreaks of COVID-19
after the management of the initial outbreak, has and could continue to reduce traffic, result in temporary or permanent closures
of stores, offices, and factories, and could negatively impact the flow of goods. For example, in response to the ongoing COVID-
19 pandemic, local and national governments in many
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countries have implemented regional quarantines and mandated the closure of nonessential businesses, which has halted traffic
in certain markets.
We may also encounter difficulty expanding into new international markets because of limited brand recognition leading to
delayed acceptance of our outerwear by customers in these new international markets. Our failure to develop our business in
new international markets or disappointing growth or inadequate management of risks outside of existing markets could harm
our business and results of operations.
We rely on a limited number of third-party suppliers to provide high quality raw materials and are reliant on
international shipping which could be disrupted and subject to increasing costs.
Our products require high quality raw materials, including polyester, nylon, blend fabrics and down. The price of raw materials
depends on a wide variety of factors largely beyond the control of Canada Goose. A shortage, delay or interruption of supply for
any reason, including delays caused by the ongoing COVID-19 pandemic and global supply chain issues, could negatively
impact our sales and have an adverse impact on our financial results.
In addition, while our suppliers, in turn, source from a number of sub-suppliers, we rely on a very small number of direct
suppliers for certain raw materials. As a result, any disruption to these relationships could have an adverse effect on our
business. Events that adversely affect our suppliers could impair our ability to obtain inventory in the quantities and at the quality
that we require. Such events include difficulties or problems with our suppliers’ businesses, finances, labour relations, shipping,
ability to import raw materials, costs, production, insurance and reputation, as well as natural disasters, public health
emergencies or other catastrophic occurrences. Our supply of raw materials, for example, could be disrupted by the impact of
the ongoing COVID-19 pandemic, and responsive actions such as border closures, restrictions on product shipments, and travel
restrictions. A significant slowdown in the retail industry as a whole as a result of the ongoing COVID-19 pandemic, may also
result in bankruptcies or permanent closures of some of our suppliers and other vendors. Furthermore, there can be no
assurance that our suppliers will continue to provide fabrics and raw materials or provide products that are consistent with our
standards. Finally, raw materials and shipping costs have and may continue to increase as a result of inflation, recent
geopolitical uncertainty and supply chain issues. Any such increases could adversely impact our financial performance if we are
unable to offset such increases with price increases on our products.
More generally, if we need to replace an existing supplier, additional supplies or additional manufacturing capacity may not be
available when required on terms that are acceptable to us, or at all, and any new supplier may not meet our strict quality
requirements. In the event we are required to find new sources of supply, we may encounter delays in production,
inconsistencies in quality and added costs as a result of the time it takes to train our suppliers and manufacturers in our
methods, products and quality control standards. Any delays, interruption or increased costs in the supply of our raw materials
could have an adverse effect on our ability to meet customer demand for our products and result in lower sales and profitability
both in the short and long-term.
We could experience significant disruptions in supply from our current sources and any disruptions of our supply
chain could have a material adverse effect on our operating and financial results.
We generally do not enter into long-term formal written agreements with our suppliers, and typically transact business with our
suppliers on an order-by-order basis. There can be no assurance that there will not be a disruption in the supply of raw materials
and certain finished goods from current sources or, in the event of a disruption, that we would be able to locate
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alternative suppliers of materials or finished goods of comparable quality at an acceptable price, or at all. Identifying a suitable
supplier is an involved process that requires us to become satisfied with their quality control, responsiveness and service,
financial stability and labour and other ethical practices. Any delays, interruption or increased costs in the supply of fabric or
manufacture of our products, including as a result of the ongoing COVID-19 pandemic, could have an adverse effect on our
ability to meet customer demand for our products and result in lower revenue and operating income both in the short and long-
term.
In addition, while we have not been materially affected by the ongoing global supply chain disruptions in fiscal 2022, any
disruptions in our supply chain capabilities, including due to the impacts of the COVID-19 pandemic, trade restrictions, political
instability, severe weather and natural disasters, war, labour shortages, reduced freight availability and increased costs, port
disruptions and other factors, could impair our ability to distribute or manufacture products. These factors are beyond our control
and to the extent we are unable to mitigate the likelihood or potential impact of such events, there could be a material adverse
effect on our operating and financial results.
Our business and results of operations could be harmed if we are unable to accurately forecast demand for our
products.
To ensure adequate inventory supply, we forecast inventory needs, which are subject to seasonal and quarterly variations in
consumer demand. If we fail to accurately forecast demand, we may experience excess inventory levels or a shortage of
product. Our ability to forecast accurately has become increasingly important as we have expanded our DTC channel globally
and could be affected by many factors outside of our control, including an increase or decrease in consumer demand for our
products or for products of our competitors, our failure to accurately forecast consumer acceptance of new products, product
introductions by competitors, unanticipated changes in general market conditions and, therefore, consumer spending in the
sector (for example, because of unexpected effects on inventory supply and consumer demand), and weakening of economic
conditions or consumer confidence in future economic conditions. In our wholesale channel, a majority of orders delivered in a
given fiscal year are received in the prior fiscal year, enabling us to manufacture inventory relative to a defined order book. In the
DTC channel, we manufacture according to our forecasts of consumer demand. If we overestimate the demand for our products,
we could face inventory levels in excess of demand, which could result in inventory write-downs or write-offs and the sale of
excess inventory at discounted prices, which would harm our gross margins and our brand management efforts. The potential
for overestimation is expected to increase as a larger portion of our sales comes through our DTC channel, and as we expand
our product offerings. If we underestimate the demand for our products, we may not be able to produce products to meet
demand, and this could result in delays in the shipment of our products and our failure to capitalize on demand, as well as
damage to our reputation and wholesale partner relationships. In addition, failures to accurately predict the level of demand for
our products could harm our profitability and financial condition.
If we are unable to establish and protect our trademarks and other intellectual property rights, counterfeiters may
produce copies of our products and such counterfeit products could damage our brand image.
We expect that there is a high likelihood that counterfeit products or other products infringing on our intellectual property rights
will continue to emerge, seeking to benefit from the consumer demand for Canada Goose products. These counterfeit products
do not provide the functionality of our products and we believe they are of substantially lower quality, and if customers are not
able to differentiate between our products and counterfeit products, this could damage our brand image. In order to protect our
brand, we devote significant resources to the registration
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and protection of our trademarks and to anti-counterfeiting efforts worldwide. We actively pursue entities involved in the
trafficking and sale of counterfeit merchandise through legal action or other appropriate measures. In spite of our efforts,
counterfeiting still occurs and, if we are unsuccessful in challenging a third-party’s rights related to trademark, copyright or other
intellectual property rights, this could adversely affect our future sales, financial condition and results of operations. We cannot
guarantee that the actions we have taken to curb counterfeiting and protect our intellectual property will be adequate to protect
the brand and prevent counterfeiting in the future or that we will be able to identify and pursue all counterfeiters who may seek to
benefit from our brand.
Competitors have and will likely continue to attempt to imitate our products and technology and divert sales. If we are
unable to protect or preserve our intellectual property rights, brand image and proprietary rights, our business may be
harmed.
As our business has expanded, our competitors have imitated, and will likely continue to imitate, our product designs and
branding, which could harm our business and results of operations. Competitors who manufacture products seeking to imitate
our products could divert sales and dilute the value of our brand. We believe our trademarks, copyrights and other intellectual
property rights are extremely important to our success and our competitive position.
However, enforcing rights to our intellectual property may be difficult and costly, and we may not be successful in stopping
infringement of our intellectual property rights, particularly in foreign countries, which could make it easier for competitors to
capture market share. Intellectual property rights necessary to protect our products and brand may also be unavailable or limited
in certain countries. Furthermore, our efforts to enforce our trademarks, copyrights and other intellectual property rights may be
met with defenses, counterclaims and countersuits attacking the validity and enforceability of our trademark and other
intellectual property rights. Continued sales of competing products by our competitors could harm our brand and adversely
impact our business, financial condition and results of operations.
Labour-related matters, including labour disputes, may adversely affect our operations.
In fiscal 2022, 4 of our in-house manufacturing and warehouse facilities in Winnipeg voted to unionize. As of April 3, 2022,
approximately 46% of our employees are members of labour unions, comprised of active employees at 7 of our 10 operated
manufacturing and warehouse facilities (comprised of 8 manufacturing facilities, 1 warehouse facility and 1 Baffin manufacturing
facility). The exposure to unionized labour in our workforce presents an increased risk of strikes and other labour disputes, and
our ability to alter labour costs will be subject to collective bargaining, which could adversely affect our results of operations. In
addition, potential labour disputes at independent factories where our goods are produced, shipping ports, or transportation
carriers create risks for our business, particularly if a dispute results in work slowdowns, lockouts, strikes or other disruptions
during our peak manufacturing, shipping and selling seasons. Any potential labour dispute, either in our own operations or in
those of third parties, on whom we rely, could materially affect our costs, decrease our sales, harm our reputation or otherwise
negatively affect our sales, profitability or financial condition.
The majority of our workforce is composed of manufacturing employees based in the provinces of Ontario, Manitoba and
Québec, a sizeable portion of whom are paid minimum wage rates based on the applicable provincial minimum wage, as well as
a number of other benefits including variable pay components. Many jurisdictions, including certain Canadian provinces, either
have increased or plan to increase their minimum wage and other benefits requirements, which may materially increase our
manufacturing costs. Minimum wage increases such as the foregoing may not only increase the wages of our minimum wage
employees, but also the wages paid to our other hourly or salaried employees who, in recognition of their tenure, performance,
responsibilities and other similar considerations, historically received a rate of pay
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exceeding the applicable minimum wage. Further, if we fail to pay such higher wages, we could suffer increased employee
turnover. It is difficult to predict when such increases may take place and any such increase could have a material adverse effect
on our business, financial condition, results of operations and prospects.
Further, the risks to our business due to a pandemic or other public health emergency, such as the ongoing COVID-19
pandemic, include risks to employee health and safety, prolonged restrictive measures put in place in order to control the crisis
and limitations on travel, which may result in temporary shortages of staff or unavailability of certain employees or consultants
with key expertise or knowledge of our business and, impact on workforce productivity.
We rely significantly on information technology systems for our distribution systems and other critical business
functions, and are increasing our reliance on these functions as our DTC channel expands. Any failure, inadequacy, or
interruption of those systems could harm our ability to operate our business effectively.
We rely on information systems to effectively manage all aspects of our business, including merchandise planning,
manufacturing, allocation, distribution, sales and financial reporting. Our reliance on these systems, and their importance to our
business, will increase as we expand our DTC channel and global operations. We rely on a number of third parties to help us
effectively manage these systems. If information systems we rely on fail to perform as expected, our business could be
disrupted. The failure by us or our vendors to manage and operate our information technology systems as expected could
disrupt our business, result in not providing adequate product, losing sales or market share, and reputational harm, causing our
business to suffer. Any such failure or disruption could have a material adverse effect on our business.
Our information technology systems and vendors also may be vulnerable to damage or interruption from circumstances beyond
our or their control, including fire, flood, natural disasters, systems failures, network or communications failures, power outages,
public health emergencies, security breaches, cyber-attacks and terrorism. For example, we have implemented a hybrid work-
from-home policy for our corporate workforce in North America and Europe. This increase in working remotely could increase
our cyber security risk, create data accessibility concerns, and make us more susceptible to communication disruptions, any of
which could adversely impact our business operations. We maintain disaster recovery procedures intended to mitigate the risks
associated with such events, but there is no guarantee that these procedures will be adequate in any particular circumstance.
As a result, such an event could materially disrupt, and have a material adverse effect on, our business.
A portion of our sales are to wholesale partners, directly and through distributors, and we depend on them to display
and present our products to customers in our wholesale channel. Our failure to maintain and further develop our
relationships with our wholesale partners could harm our business.
A portion of our sales are made to wholesale partners, either directly or indirectly, through distributors. Our wholesale partners
service customers by stocking and displaying our products and explaining our product attributes. Our relationships with these
partners are important to the authenticity of our brand and the marketing programs we continue to deploy.
If we fail to maintain and develop relationships with our wholesale partners, they could decide to emphasize products from our
competitors, to redeploy their retail floor space to other product categories, or to take other actions that reduce their purchases
of our products. We do not receive long-term purchase commitments from our wholesale partners, and confirmed orders
received from our wholesale partners may be difficult to enforce. Factors that could affect our ability to maintain or expand our
sales to these wholesale partners include: (a) failure to accurately identify the needs of our customers; (b) lack of customer
acceptance of new
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products, product expansions or changes in products (for example, resulting from our announcement in fiscal 2022 that we
would cease manufacturing with fur by no later than end of 2022); (c) unwillingness of our wholesale partners and customers to
attribute premium value to our new or existing products or product expansions relative to competing products; (d) failure to
obtain shelf space from our wholesale partners; and (e) new, well-received product introductions by competitors. If we lose any
of our wholesale partners, or if they reduce their purchases of our existing or new products, or their number of stores or
operations are reduced, or they promote products of our competitors over ours, or they suffer financial difficulty or insolvency,
our sales and profitability could be harmed.
We cannot ensure that our wholesale partners will continue to purchase and carry our products in accordance with current
practices or carry any new products that we develop particularly in light of the ongoing COVID-19 pandemic. The recent decline
in the overall retail sector, including ongoing disruptions related to COVID-19, has been challenging for our wholesale partners.
Due to COVID-19 and the related reduction in available credit insurance, we increased the amount of risk we undertook with
respect to collecting payments from our wholesale partners. Such conditions, among other things, have resulted, and in the
future may result, in financial difficulties leading to restructurings, bankruptcies, liquidations and other unfavorable events for our
wholesale partners and may cause such partners to reduce or discontinue orders of our products or be unable to pay us for
products they have purchased from us. This has caused us to negotiate shortened payment terms and reduce credit limits in
certain cases. If the overall retail environment continues to decline or if one or more of our wholesale partners is unable or
unwilling to meet our payment terms, our business and results of operations could be harmed.
Our marketing programs, our e-Commerce initiatives and our collection, use and disclosure of transactional and
personal information about our customers are governed by an evolving set of laws and enforcement trends and
unfavorable changes in those laws or trends, or our failure to comply with existing or future laws, could substantially
harm our business and results of operations.
We collect, process, disclose, maintain and otherwise use data, including personal information about individuals, including data
available to us through online activities and other customer interactions in our business. Our current and future marketing
programs may depend on our ability to collect, maintain, disclose and otherwise use this information, and our ability to do so is
subject to evolving and increasingly demanding international, U.S., Canadian, Chinese, European and other laws, including for
example, the European Union’s General Data Privacy Regulation, the California Consumer Privacy Act, Canada’s Personal
Information Protection and Electronic Documents Act and China’s Personal Information Protection Law. These information and
privacy laws require companies to satisfy new requirements regarding the handling of personal information, including its use,
protection and the ability of persons whose data is stored to access, correct or delete such data about themselves. Failure to
comply with such requirements could result in significant penalties. We strive to comply with all applicable laws and other legal
obligations relating to privacy, data protection and customer protection, including those relating to the collection, use and
disclosure of personal information for marketing purposes. It is possible, however, that these requirements may be inconsistent
from one jurisdiction to another, may conflict with other rules, may conflict with our practices or fail to be observed by our
employees or business partners. If so, we may suffer damage to our reputation and be subject to proceedings or actions against
us by governmental entities or others. Any such proceeding or action could hurt our reputation, force us to spend significant
amounts to defend our practices, distract our management or otherwise have an adverse effect on our business.
Certain of our marketing practices rely upon the sending of commercial electronic messages, including e-mails, to communicate
with consumers. We may face risk if our use of commercial
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electronic messages is found to violate applicable laws and regulations. We post our privacy policies and practices concerning
the collection, use and disclosure of personal information on our websites. Any failure by us to comply with our posted privacy
policies or other privacy-related laws and regulations could result in proceedings which could potentially harm our business. In
addition, as information and privacy laws and anti-spam laws change, we may incur additional costs to ensure we remain in
compliance. If information and data privacy laws and anti-spam laws become more restrictive at the international, federal,
provincial or state levels, our compliance costs may increase, our ability to effectively engage customers via personalized
marketing may decrease, our investment in our e-Commerce platform may not be fully realized, our opportunities for growth may
be curtailed by our compliance burden and our potential reputational harm or liability for breaches may increase.
Data security breaches and other cyber security events could result in disruption to our operations or financial losses
and could negatively affect our reputation, credibility and business.
As with other companies, we and our service providers are subject to risks associated with data security breaches and other
cyber security events. We collect, process, maintain and use personal information relating to our customers and employees. We
also disclose personal information about consumers and employees to third party service providers, who help us with our
business operations, including the operation of our e-Commerce site and the provision of various social media tools and
websites we use as part of our marketing strategy. Any attempted or actual unauthorized disclosure of personal information
regarding our employees, customers or website visitors could harm our reputation and credibility, reduce our e-Commerce sales,
impair our ability to attract website visitors, reduce our ability to attract and retain customers and could result in litigation against
us or the imposition of significant fines or penalties.
Our online activities, including our e-Commerce websites, may also be subject to denial of service or other forms of cyber
attacks. While we have taken measures we believe are reasonable to protect against those types of attacks, those measures
may not adequately protect our online activities from such attacks. If a denial of service attack or other cyber event were to
affect our e-Commerce sites or other information technology systems, our business could be disrupted, we may lose sales or
valuable data, and our reputation, results of operations and financial condition may be adversely affected. Additionally, new and
evolving data protection legislation could impose new requirements such as shorter notification timeframes that could increase
the risks associated with data security breaches.
We have procedures and technology in place designed to safeguard our customers’ debit and credit cards and our customers’
and employees’ other personal information under our control, and we continue to devote significant resources to network
security, backup and disaster recovery, and other security measures. Nevertheless, these security measures cannot provide
absolute security or guarantee that we will be successful in preventing and responding to breaches, loss, theft, or unauthorized
access, disclosure, copying, use, or modification of personal information under our control.
As consumers are gaining more data privacy awareness, in the future there may be new foreign, federal, provincial and state
laws and legislative proposals addressing data privacy and security, as well as increased data protection obligations imposed on
merchants by credit card issuers. As a result, we may become subject to more extensive requirements to protect the personal
information that we collect, use and disclose, resulting in, for example, increased compliance costs.
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A significant portion of our business functions operate out of our headquarters in Toronto. As a result, our business is
vulnerable to disruptions due to local weather, economics and other factors.
Most of our significant business functions reside at our headquarters in Toronto, Canada. Events such as public health
emergencies, including the ongoing COVID-19 pandemic, extreme local weather, natural disasters, transportation strikes, acts of
terrorism, significant economic disruptions or unexpected damage to the facility have resulted and could result in an unexpected
disruption to our business as a whole. If a disruption of this type should occur, our ability to conduct our business could be
adversely affected or interrupted entirely and adversely affect our financial and operating results.
Our success is substantially dependent on the continued service of our senior management.
Our success is substantially dependent on the continued service of our senior management, including Dani Reiss, who is our
Chairman and Chief Executive Officer. The loss of the services of our senior management could make it more difficult to
successfully operate our business and achieve our business goals. We also may be unable to retain existing management,
technical, sales and client support personnel that are critical to our success, which could result in harm to our customer and
employee relationships, loss of key information, expertise or know-how and unanticipated recruitment and training costs.
We have not obtained key man life insurance policies on any members of our senior management team. As a result, we would
not be protected against the associated financial loss if we were to lose the services of members of our senior management
team.
Talent management, employee retention and experience are important factors in our success.
Our future success also depends on our ability to attract, develop, and retain talent with the necessary knowledge, skills and
experience and establish a positive work culture to maintain operations and ensure we are competitive in our industry.
Competition for experienced and well-qualified personnel is intense amidst a tight labour market with labour shortages and
increased wage expectations. We, or the suppliers and service providers we rely on, may not be successful in attracting, hiring
and retaining such personnel, which could impact our ability to remain competitive or operate efficiently and effectively. If we are
unable to retain, hire, attract and motivate talented employees with the appropriate skill sets, or if changes to our organizational
structure, operating results, or business model adversely affect morale or retention, we may not achieve our objectives and our
results of operations could be adversely impacted.
We rely on payment cards to receive payments, and are subject to payment-related risks.
For our DTC sales, as well as for sales to certain wholesale partners, we accept a variety of payment methods, including credit
cards, debit cards and electronic funds transfers. Accordingly, we are, and will continue to be, subject to significant and evolving
regulations and compliance requirements relating to payment card processing. This includes laws governing the collection,
processing and storage of sensitive consumer information, as well as industry requirements such as the Payment Card Industry
Data Security Standard (“PCI-DSS”). These laws and obligations may require us to implement enhanced authentication and
payment processes that could result in increased costs and liability, and reduce the ease of use of certain payment methods.
For certain payment methods, including credit and debit cards, we pay interchange and other fees, which may increase over
time. We rely on independent service providers for payment processing, including credit and debit cards. If these independent
service providers become unwilling or unable to provide these services to us or if the cost of using these
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providers increases, our business could be harmed. We are also subject to payment card association operating rules and
agreements, including PCI-DSS, certification requirements and rules governing electronic funds transfers, which could change
or be reinterpreted to make it difficult or impossible for us to comply. If we fail to comply with these rules or requirements, or if
our data security systems are breached or compromised, we may be liable for losses incurred by card issuing banks or
consumers, subject to fines and higher transaction fees, lose our ability to accept credit or debit card payments from our
consumers, or process electronic fund transfers or facilitate other types of payments. Any failure to comply could significantly
harm our brand, reputation, business, and results of operations.
Increased scrutiny from investors and others regarding our environmental, social, governance, or sustainability
responsibilities could result in additional costs or risks and adversely impact our reputation, employee retention, and
willingness of customers and suppliers to do business with us.
Investor advocacy groups, certain institutional investors, investment funds, other market participants, stockholders, current and
prospective employees, and customers have focused increasingly on the environmental, social and governance ("ESG") or
“sustainability” practices of companies, including those associated with climate change. These parties have placed increased
importance on the implications of the social cost of their investments. If our ESG practices do not meet investor or other industry
stakeholder expectations and standards, which continue to evolve, our brand, reputation and employee retention may be
negatively impacted based on an assessment of our ESG practices. Any sustainability report that we publish or other
sustainability disclosures we make may include our policies and practices on a variety of social and ethical matters, including
corporate governance, environmental compliance, employee health and safety practices, human capital management, product
quality, supply chain management, and workforce inclusion and diversity. It is possible that stakeholders may not be satisfied
with our ESG practices or the speed of their adoption. We could also incur additional costs and require additional resources to
monitor, report, and comply with various ESG practices. Further, our failure, or perceived failure, to meet the standards included
in any sustainability disclosure could negatively impact our reputation, employee retention, and the willingness of our customers
and suppliers to do business with us.
If our independent manufacturers or our suppliers fail to use ethical business practices and fail to comply with
changing laws and regulations or our applicable guidelines, our brand image could be harmed due to negative
publicity.
Our core values, which include developing the highest quality products while operating with integrity, are an important
component of our brand image, which makes our reputation sensitive to allegations of unethical or improper business practices,
whether real or perceived. We do not control our suppliers and manufacturers or their business practices. Accordingly, we
cannot guarantee their compliance with our guidelines or the law. A lack of compliance could lead to reduced sales or recalls or
damage to our brand or cause us to seek alternative suppliers, which could increase our costs and result in delayed delivery of
our products, product shortages or other disruptions of our operations.
In addition, many of our products include materials that are heavily regulated in many jurisdictions. Certain jurisdictions in which
we sell have various regulations related to manufacturing processes and the chemical content of our products, including their
component parts. Monitoring compliance by our manufacturers and suppliers is complicated, and we are reliant on their
compliance reporting in order to comply with regulations applicable to our products. This is further complicated by the fact that
expectations of ethical business practices continually evolve and may be substantially more demanding than applicable legal
requirements. Ethical business practices are also driven in part by legal developments and by
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diverse groups active in publicizing and organizing public responses to perceived ethical shortcomings. Accordingly, we cannot
predict how such regulations or expectations might develop in the future and cannot be certain that our guidelines or current
practices would satisfy all parties who are active in monitoring our products or other business practices worldwide.
Our current and future products may experience quality problems from time to time that can result in negative
publicity, litigation, product recalls and warranty claims, which could result in decreased revenue and operating
margin, and harm to our brand.
There can be no assurance we will be able to detect, prevent, or fix all defects that may affect our products. Failure to detect,
prevent, or fix defects, or the occurrence of real or perceived quality, health or safety problems or material defects in our current
and future products, could result in a variety of consequences, including a greater number of product returns than expected from
customers and our wholesale partners, litigation, product recalls, and credit, warranty or other claims, among others, which
could harm our brand, sales, profitability and financial condition. We stand behind every Canada Goose outerwear product with
a warranty against defects with reasonable use, for the expected lifetime of the product. Because of this comprehensive
warranty, quality problems could lead to increased warranty costs, and divert the attention of our manufacturing facilities. Such
problems could hurt our premium brand image, which is critical to maintaining and expanding our business. Any negative
publicity or lawsuits filed against us related to the perceived quality and safety of our products could harm our brand and
decrease demand for our products.
Our business could be adversely affected by protestors or activists.
Our products include certain animal products, including goose and duck down in all of our outerwear and coyote fur on the
hoods of some of our parkas, which has drawn the attention of animal welfare activists. As a result, we have been the target of
protestors and activists in the past. While we ended the purchase of all fur at the end of 2021 and announced that we will cease
manufacturing with fur no later than the end of 2022, we may continue to be targeted by protestors and activists in the future.
We have been, and may in the future, also be impacted by widespread protests in any country or region that we trade.
Protestors can disrupt sales at our stores, cause or prolong store closures, and lead to property damage. Protestors can also
use social media or other campaigns to sway public opinion against our products. In addition, such activism could influence laws
or regulations applicable to the jurisdictions in which we operate, including laws and regulations related to the use of animal by-
products. If any such activists are successful, our sales and results of operations may be adversely affected.
The cost of raw materials could increase our cost of goods sold and cause our results of operations and financial
condition to suffer.
The raw materials used in our supply chain include synthetic fabrics and natural products, including blend fabrics, nylon,
polyester and down. Significant price fluctuations, including as a result of inflation, or shortages in the cost of these raw
materials may increase our cost of goods sold and cause our results of operations and financial condition to suffer.
Additionally, increasing costs of labour, freight and energy could increase our and our suppliers’ cost of goods. If our suppliers
are affected by increases in their costs of labour, freight and energy, (for example, because of rising global energy prices,
increased global worker shortages impacting shipping and ports, truck driver shortages, increased congestion or other
disruptions affecting the global distribution chain) they may attempt to pass these cost increases on to us. If we pay such
increases, we may not be able to offset them through increases in our pricing, which could adversely affect our results of
operation and financial condition.
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Fluctuations in foreign currency exchange rates could harm our results of operations as well as the price of our
subordinate voting shares.
The presentation currency for our consolidated financial statements is the Canadian dollar. Because we recognize sales in U.S.
dollars, Euros, British pounds, Swiss francs, Hong Kong dollars and Chinese yuan, if any of these currencies weakens against
the Canadian dollar it would have a negative impact on our local operating results upon translation of those results into
Canadian dollars for the purposes of financial statement consolidation. Although we engage in short-term hedging transactions
for a portion of our foreign currency denominated cash flows to mitigate foreign exchange risks, depending upon changes in
future currency rates, including those fluctuations derived from the broader impact on the global economy caused by the
ongoing COVID-19 pandemic and geopolitical uncertainty, such gains or losses could have a significant, and potentially
adverse, effect on our results of operations. Foreign exchange variations have been significant in the past and current foreign
exchange rates may not be indicative of future exchange rates. Significant variations in foreign exchange rates may also make
hedging contracts ineffective for hedge accounting purposes in future periods.
Our earnings per share are reported in Canadian dollars, and accordingly may be translated into U.S. dollars by analysts or our
investors. As a result, the perceived value of an investment in our subordinate voting shares to a U.S. shareholder will fluctuate
as the U.S. dollar rises and falls against the Canadian dollar. As a result, U.S. and other shareholders seeking U.S. dollar total
returns, including increases in the share price, are subject to foreign exchange risk as the U.S. dollar fluctuates in value against
the Canadian dollar.
Political uncertainty and an increase in trade protectionism could have a material adverse effect on our business,
results of operation and financial condition.
As a prominent Canadian brand, geopolitical events that involve Canada may have an impact on our business and share price.
In addition, our brand and Canadian heritage may be detrimental to the company in the context of geopolitical disputes aimed at
Canada or actors or situations with significant actual or perceived connection to Canada. We sell a significant portion of our
products to customers outside of Canada and changes, potential changes or uncertainties in regulatory and economic
conditions or laws and policies governing foreign trade, manufacturing, and development and investment in the territories and
countries where we operate, could adversely affect our business and consolidated financial statements. Consumer sentiment in
countries outside Canada may be affected by unforeseen factors leading to harm to our brand or may impact our business. Any
potential or ongoing governmental action related to tariffs or international trade agreements has the potential to adversely impact
demand for our products, our costs, customers, suppliers and/or the Canadian, U.S. or world economy or certain sectors thereof
and, thus, to adversely impact our business.
Because of our international operations, which we are expanding, we could be adversely affected by violations of the
U.S. Foreign Corrupt Practices Act and similar worldwide anti-bribery and anti-kickback laws.
We are conducting an increasing amount of our business outside Canada as well as sourcing an increasingly significant portion
of our products from outside Canada. The U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act and other similar anti-bribery
and anti-kickback laws and regulations generally prohibit companies and their intermediaries from making improper payments
government officials for the purpose of obtaining or retaining business. While we take steps to ensure that our distributors,
consultant and personnel comply with applicable law, we cannot assure you that we will be successful in preventing our
employees or other agents from taking actions in violation of these laws or regulations. Such violations, or allegations of such
violations, could disrupt our business and result in a material adverse effect on our financial condition, results of operations and
cash flows.
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We may become involved in legal or regulatory proceedings and audits.
Our business requires compliance with many laws and regulations, including labour and employment, sales and other taxes,
customs, and consumer protection laws and ordinances that regulate retailers generally and/or govern the importation,
promotion and sale of merchandise, and the operation of stores and warehouse facilities. Failure to comply with these laws and
regulations could subject us to lawsuits and other proceedings, and could also lead to damage awards, fines and penalties. We
have in the past and may become involved in legal proceedings or audits, including government and agency investigations, and
consumer, employment, tort and other litigation. The outcome of some of these legal proceedings, audits, and other
contingencies could require us to take, or refrain from taking, actions that could harm our operations or require us to pay
substantial amounts of money, harming our financial condition. Additionally, defending against these lawsuits and proceedings
may be necessary, which could result in substantial costs and diversion of management’s attention and resources, harming our
financial condition. There can be no assurance that any pending or future legal or regulatory proceedings and audits will not
harm our business, financial condition and results of operations.
We are subject to many hazards and operational risks that can disrupt our business, some of which may not be
insured or fully covered by insurance.
Our operations are subject to many hazards and operational risks inherent to our business, including: general business risks,
product liability, false or misleading advertising claims, product recall and damage to third parties, our infrastructure or properties
caused by fires, floods and other natural disasters, power losses, telecommunications failures, terrorist attacks, public health
emergencies (such as the COVID-19 pandemic), human errors, political instability, social and labour unrest or war and similar
events.
Our insurance coverage may exclude or may be inadequate to cover our liabilities related to such hazards or operational risks.
In addition, we may not be able to maintain adequate insurance in the future at rates we consider reasonable and commercially
justifiable, and insurance may not continue to be available on terms as favorable as our current arrangements. The occurrence
of a significant uninsured claim, or a claim in excess of the insurance coverage limits maintained by us could harm our business,
results of operations and financial condition.
Furthermore, our inability to successfully recover should we experience a disaster or other business continuity problem could
cause material financial loss, loss of human capital, regulatory actions, reputational harm, or legal liability.
We may be subject to in-store and workplace health and safety liability, claims and penalties.
We are committed to protecting the health and well-being of our customers and employees in all of our stores and workplaces.
We have workplace and in-store health and safety programs in place and have established policies and procedures aimed at
ensuring compliance with applicable legislative requirements within our stores. Failure to comply with established policies and
procedures or applicable legislative requirements could result in increased workplace or in-store injury-related liability and
penalties. Any workplace or in-store injuries could lead to claims or litigation being brought against our company, which could
adversely affect the reputation of our company and could have a material adverse effect on our business, operating results and
financial condition. Although we maintain insurance policies we deem sufficient to address those situations, there is no
guarantee a particular claim would be accepted by the insurer or that the insurance coverage would be sufficient.
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Any failure to maintain effective internal control over financial reporting could have a material adverse effect on our
ability to produce accurate and timely financial statements, which could harm our operating results, financial
condition, and cash flows, our ability to operate our business and our reputation.
The process of designing and implementing effective internal controls is a continuous effort that requires us to anticipate and
react to changes in our business and to expend resources to maintain a system of internal controls that is adequate to satisfy
our reporting obligations as a public company. The measures we take may not be sufficient to satisfy our obligations as a public
company and if we are unable to establish or maintain appropriate internal financial reporting controls and procedures, it could
cause us to fail to meet our reporting obligations on a timely basis, result in material misstatements in our consolidated financial
statements and harm our results of operations.
We cannot provide assurances that material weaknesses or significant deficiencies will not occur in the future and that we will
be able to remediate such weaknesses or deficiencies in a timely manner, which could have a material adverse effect on our
ability to produce accurate and timely financial statements, which could harm our operating results, financial condition, and cash
flows, our ability to operate our business and our reputation.
If we identify any material weakness in the future, it could negatively impact the company’s ability to prepare its future financial
statements in conformity with IFRS. If the company were unable to prepare its future financial statements in conformity with
IFRS, we may be unable to report our financial results accurately, which could increase operating costs, trigger an event of
default under our credit agreements and harm our business, including our investors’ perception of our business, our share price
and our ability to finance our operations.
Failure to maintain adequate financial and management processes and controls could lead to errors in our financial
reporting, which could harm our business and cause a decline in our share price.
Reporting obligations as a public company and our anticipated growth have placed and are likely to continue to place a
considerable strain on our financial and management systems, processes and controls, as well as on our personnel. In addition,
we are required to document and test our internal controls over financial reporting pursuant to Section 404 of the Sarbanes-
Oxley Act so that our management can certify the effectiveness of our internal controls. If any material weaknesses in our
internal controls are identified in the future, we could be subject to regulatory scrutiny and a loss of public confidence, which
could harm our business and cause a decline in our share price. In addition, if we do not maintain adequate financial and
management personnel, processes and controls, we may not be able to accurately report our financial performance on a timely
basis, which could cause a decline in our share price and harm our ability to raise capital. Failure to accurately report our
financial performance on a timely basis could also jeopardize our continued listing on the Toronto Stock Exchange (“TSX”), the
New York Stock Exchange (“NYSE”) or any other exchange on which our subordinate voting shares may be listed. Delisting of
our subordinate voting shares from any exchange would reduce the liquidity of the market for our subordinate voting shares,
which would reduce the price of our subordinate voting shares and increase the volatility of our share price.
We do not expect that our disclosure controls and procedures and internal controls over financial reporting will prevent all error
or fraud. A control system, no matter how well-designed and implemented, can provide only reasonable, not absolute,
assurance that the control system’s objectives will be met. Further, the design of a control system must reflect the fact that there
are resource constraints, and the benefits of controls must be considered relative to their costs. Due to the inherent limitations in
all control systems, no evaluation of controls can provide absolute assurance that all control issues within an organization are
detected. Due to the
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inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and may not be detected in
a timely manner or at all. If we cannot provide reliable financial reports or prevent fraud, our reputation and operating results
could be materially adversely affected, which could also cause investors to lose confidence in our reported financial information,
which in turn could result in a reduction in the trading price of the subordinate voting shares.
Risks Related to Our Subordinate Voting Shares
The dual-class structure contained in our articles has the effect of concentrating voting control and the ability to
influence corporate matters with Bain Capital and our Chairman and Chief Executive Officer, who held our shares prior
to our initial public offering.
Our multiple voting shares have 10 votes per share and our subordinate voting shares have 1 vote per share. As of April 3,
2022, shareholders who hold multiple voting shares (Bain Capital and our Chairman and Chief Executive Officer (including their
respective affiliates)), together hold approximately 90.4% of the voting power of our outstanding voting shares and therefore
have significant influence over our management and affairs and over all matters requiring shareholder approval, including the
election of directors and significant corporate transactions.
In addition, because of the 10-to-1 voting ratio between our multiple voting shares and subordinate voting shares, the holders of
our multiple voting shares will control a majority of the combined voting power of our voting shares even where the multiple
voting shares represent a substantially reduced percentage of our total outstanding shares. The concentrated voting control of
holders of our multiple voting shares limits the ability of holders of our subordinate voting shares to influence corporate matters
for the foreseeable future, including the election of directors as well as with respect to decisions regarding amending of our
share capital, creating and issuing additional classes of shares, making significant acquisitions, selling significant assets or parts
of our business, merging with other companies and undertaking other significant transactions. As a result, holders of multiple
voting shares will have the ability to influence or control many matters affecting us and actions may be taken that holders of our
subordinate voting shares may not view as beneficial. The market price of our subordinate voting shares could be adversely
affected due to the significant influence and voting power of the holders of multiple voting shares. Additionally, the significant
voting interest of holders of multiple voting shares may discourage transactions involving a change of control, including
transactions in which an investor, as a holder of the subordinate voting shares, might otherwise receive a premium for the
subordinate voting shares over the then-current market price, or discourage competing proposals if a going private transaction is
proposed by one or more holders of multiple voting shares.
Future transfers by holders of multiple voting shares, other than permitted transfers to such holders’ respective affiliates or direct
family members or to other permitted holders, will result in those shares automatically converting to subordinate voting shares,
which will have the effect, over time, of increasing the relative voting power of those holders of multiple voting shares who retain
their multiple voting shares.
Bain Capital continues to have significant influence over us in the future, including control over decisions that require
the approval of shareholders, which could limit shareholders’ ability to influence the outcome of matters submitted to
shareholders for a vote.
We are currently controlled by Bain Capital. As of April 3, 2022, Bain Capital beneficially owned approximately 60.5% of our
outstanding multiple voting shares, or approximately 54.7% of the combined voting power of our multiple voting and subordinate
voting shares outstanding. In
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addition, our Chairman and Chief Executive Officer beneficially owns approximately 39.5% of our outstanding multiple voting
shares, or approximately 35.7% of the combined voting power of our outstanding voting shares. As long as Bain Capital owns or
controls at least a majority of our outstanding voting power, it will have the ability to exercise substantial control over all
corporate actions requiring shareholder approval, irrespective of how our other shareholders may vote, including the election
and removal of directors and the size of our board of directors, any amendment of our notice of articles and articles, or the
approval of any merger or other significant corporate transaction, including a sale of substantially all of our assets. Even if its
ownership falls below 50% of the voting power of our outstanding voting shares, Bain Capital will continue to be able to strongly
influence or effectively control our decisions. Bain Capital’s multiple voting shares convert automatically to subordinate voting
shares at the time that Bain Capital and its affiliates no longer beneficially own at least 15% of the outstanding subordinate
voting shares and multiple voting shares on a non-diluted basis. Even once Bain Capital’s multiple voting shares convert into
subordinate voting shares we may continue to be a controlled company so long as an entity controlled by our Chairman and
Chief Executive Officer continues to hold multiple voting shares.
Additionally, Bain Capital’s interests may not align with the interests of our other shareholders. Bain Capital is in the business of
making investments in companies and may acquire and hold interests in businesses that compete directly or indirectly with us.
Bain Capital may also pursue acquisition opportunities that may be complementary to our business, and, as a result, those
acquisition opportunities may not be available to us.
We are a controlled company within the meaning of the NYSE listing rules and, as a result, will qualify for, and intend to
rely on, exemptions from certain corporate governance requirements. Our shareholders will not have the same
protections afforded to shareholders of companies that are subject to such requirements.
We are a controlled company within the meaning of the corporate governance standards of the NYSE. Under these rules, a
company of which more than 50% of the voting power for the election of directors is held by an individual, group or another
company is a controlled company and may elect not to comply with certain corporate governance requirements, including the
requirements that:
• we have a compensation committee that is composed entirely of independent directors; and
• we have a nominating and governance committee that is composed entirely of independent directors.
As a foreign private issuer, we are exempt from certain U.S. securities law disclosure requirements that apply to a
domestic U.S. issuer, which may limit the information publicly available to our shareholders.
As a foreign private issuer we are not required to comply with all of the periodic disclosure and current reporting requirements of
the Securities Exchange Act of 1934, as amended (“Exchange Act”) and therefore there may be less publicly available
information about us than if we were a U.S. domestic issuer. For example, we are not subject to the proxy rules in the United
States and disclosure with respect to our annual meetings and any special meeting of shareholders will be governed by
Canadian requirements. In addition, our officers, directors and principal shareholders are exempt from the reporting and short-
swing profit recovery provisions of Section 16 of the Exchange Act and the rules thereunder. Furthermore, as a foreign private
issuer, we may take advantage of certain provisions in the NYSE listing rules that allow us to follow Canadian law for certain
governance matters.
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Our articles, and certain Canadian legislation contain provisions that may have the effect of delaying or preventing a
change in control.
Certain provisions of our articles, together or separately, could discourage potential acquisition proposals, delay or prevent a
change in control and limit the price that certain investors may be willing to pay for our subordinate voting shares. For instance,
our articles contain provisions that establish certain advance notice procedures for nomination of candidates for election as
directors at shareholders’ meetings. A non-Canadian must file an application for review with the Minister responsible for the
Investment Canada Act and obtain approval of the Minister prior to acquiring control of a “Canadian business” within the
meaning of the Investment Canada Act, where prescribed financial thresholds are exceeded. Furthermore, acquisitions of our
subordinate voting shares and multiple voting shares may be reviewed pursuant to the Competition Act (Canada). This
legislation permits the Commissioner of Competition, or Commissioner, to review any acquisition or establishment, directly or
indirectly, including through the acquisition of shares, of control over or of a significant interest in us. Otherwise, there are no
limitations either under the laws of Canada or British Columbia, or in our articles on the rights of non-Canadians to hold or vote
our subordinate voting shares and multiple voting shares. Any of these provisions may discourage a potential acquirer from
proposing or completing a transaction that may have otherwise presented a premium to our shareholders.
Because we are a corporation incorporated in British Columbia and some of our directors and officers are resident in
Canada, it may be difficult for investors in the United States to enforce civil liabilities against us based solely upon the
federal securities laws of the United States. Similarly, it may be difficult for Canadian investors to enforce civil
liabilities against our directors and officers residing outside of Canada.
We are a corporation incorporated under the laws of British Columbia with our principal place of business in Toronto, Canada.
Some of our directors and officers and the auditors or other experts named herein are residents of Canada and all or a
substantial portion of our assets and those of such persons are located outside the United States. Consequently, it may be
difficult for U.S. investors to effect service of process within the United States upon us or our directors or officers or such
auditors who are not residents of the United States, or to realize in the United States upon judgments of courts of the United
States predicated upon civil liabilities under the Securities Act. Investors should not assume that Canadian courts: (1) would
enforce judgments of U.S. courts obtained in actions against us or such persons predicated upon the civil liability provisions of
the U.S. federal securities laws or the securities or blue sky laws of any state within the United States or (2) would enforce, in
original actions, liabilities against us or such persons predicated upon the U.S. federal securities laws or any such state
securities or blue sky laws.
Similarly, some of our directors and officers are residents of countries other than Canada and all or a substantial portion of the
assets of such persons are located outside Canada. As a result, it may be difficult for Canadian investors to initiate a lawsuit
within Canada against these non-Canadian residents. In addition, it may not be possible for Canadian investors to collect from
these non-Canadian residents judgments obtained in courts in Canada predicated on the civil liability provisions of securities
legislation of certain of the provinces and territories of Canada. It may also be difficult for Canadian investors to succeed in a
lawsuit in the United States, based solely on violations of Canadian securities laws.
Changes in tax laws and regulations or trade rules may impact our effective tax rate and may adversely affect our
business, financial condition and operating results.
Changes in tax laws in any of the multiple jurisdictions in which we operate, or adverse outcomes from tax audits that we may
be subject to in any of the jurisdictions in which we operate, could result in an unfavorable change in our effective tax rate, which
could adversely
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affect our business, financial condition and operating results. For example, the current U.S. policy has introduced greater
uncertainty with respect to tax and trade policies, tariffs and government regulations affecting trade between the United States
and other countries. Major developments in tax policy or trade relations could have a material adverse effect on our growth
opportunities, business and results of operations.
There could be adverse tax consequence for our shareholders in the United States if we are a passive foreign
investment company.
Under United States federal income tax laws, if a company is, or for any past period was, a passive foreign investment company
(“PFIC”) it could have adverse United States federal income tax consequences to U.S. shareholders even if the company is no
longer a PFIC. The determination of whether we are a PFIC is a factual determination made annually based on all the facts and
circumstances and thus is subject to change, and the principles and methodology used in determining whether a company is a
PFIC are subject to interpretation. We do not believe that we currently are or have been a PFIC, and we do not expect to be a
PFIC in the future, but we cannot assure you that we will not be a PFIC in the future. United States holders of our subordinate
voting shares are urged to consult their tax advisors concerning United States federal income tax consequences of holding our
subordinate voting shares if we are considered to be a PFIC.
If we are a PFIC, U.S. holders would be subject to adverse U.S. federal income tax consequences, such as ineligibility for any
preferred tax rates on capital gains or on actual or deemed dividends, interest charges on certain taxes treated as deferred, and
additional reporting requirements under U.S. federal income tax laws or regulations. Whether or not U.S. holders make a timely
qualified electing fund (“QEF”) election or mark-to-market election may affect the U.S. federal income tax consequences to U.S.
holders with respect to the acquisition, ownership and disposition of our subordinate voting shares and certain distributions such
U.S. holders may receive. Investors should consult their own tax advisors regarding all aspects of the application of the PFIC
rules to our subordinate voting shares.
Canada Goose Holdings Inc. is a holding company with no operations of its own and, as such, it depends on its
subsidiary for cash to fund its operations and expenses, including future dividend payments, if any.
As a holding company, our principal source of cash flow is distributions from our main operating subsidiary, Canada Goose Inc.
Therefore, our ability to fund and conduct our business, service our debt and pay dividends, if any, in the future will depend on
the ability of our subsidiary to generate sufficient cash flow to make upstream cash distributions to us. Our subsidiary is a
separate legal entity, and although it is wholly-owned and controlled by us, it has no obligation to make any funds available to
us, whether in the form of loans, dividends or otherwise. The ability of our subsidiary to distribute cash to us will also be subject
to, among other things, restrictions that may be contained in our subsidiary agreements (as entered into from time to time),
availability of sufficient funds in such subsidiary and applicable laws and regulatory restrictions. Claims of any creditors of our
subsidiary generally will have priority as to the assets of such subsidiary over our claims and claims of our creditors and
shareholders. To the extent the ability of our subsidiary to distribute dividends or other payments to us is limited in any way, our
ability to fund and conduct our business, service our debt and pay dividends, if any, could be harmed.
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If securities or industry analysts cease publishing research or reports about us, our business or our market, or if they
change their recommendations regarding our subordinate voting shares adversely, the price and trading volume of our
subordinate voting shares could decline.
The trading market for our subordinate voting shares is influenced by the research and reports that industry or securities
analysts publish about us, our business, our market or our competitors. If any of the analysts who cover us or may cover us in
the future change their recommendation regarding our subordinate voting shares adversely, or provide more favorable relative
recommendations about our competitors, the price of our subordinate voting shares may decline. If any analyst who covers us or
may cover us in the future were to cease coverage of our company or fail to regularly publish reports on us, we could lose
visibility in the financial markets, which in turn could cause the price or trading volume of our subordinate voting shares to
decline.
Our constating documents permit us to issue an unlimited number of subordinate voting shares and multiple voting
shares without additional shareholder approval.
We may, from time to time, issue additional subordinate voting shares in the future. Subject to the requirements of the NYSE
and the TSX, we will not be required to obtain the approval of shareholders for the issuance of additional subordinate voting
shares. Although the rules of the TSX generally prohibit us from issuing additional multiple voting shares, there may be certain
circumstances where additional multiple voting shares may be issued, including upon receiving shareholder approval. Any
further issuances of subordinate voting shares or multiple voting shares will result in immediate dilution to existing shareholders
and may have an adverse effect on the value of their shareholdings. Additionally, any further issuances of multiple voting shares
may significantly lessen the combined voting power of our subordinate voting shares due to the 10-to-1 voting ratio between our
multiple voting shares and subordinate voting shares.
ITEM 4. INFORMATION ON THE COMPANY
A. History and Overview
Founded in 1957 in a small warehouse in Toronto, Canada, Canada Goose is a lifestyle brand and a leading manufacturer of
outerwear and apparel. Every collection is informed by the rugged demands of the Arctic, ensuring a legacy of functionality is
embedded in every product from parkas and rainwear to apparel and accessories. Canada Goose is inspired by relentless
innovation and uncompromised craftsmanship, recognized as a leader for its Made in Canada commitment.
Across all channels, Canada Goose is sold in 64 countries as of April 3, 2022. During our Fall / Winter 2021 season, we sold
through over 1,800 wholesale points of distribution.
In December 2013, we partnered with Bain Capital through a sale of a 70% equity interest in our business (the “Acquisition”). In
connection with such sale, Canada Goose Holdings Inc. was incorporated under the Business Corporations Act (British
Columbia) (the “BCBCA”) on November 21, 2013. The initial public offering of our subordinate voting shares in the United States
and Canada was completed on March 21, 2017.
In November 2018, we acquired the business of Baffin Inc. (“Baffin”), a Canadian designer and manufacturer of performance
outdoor and industrial footwear. Field-tested and trusted in extreme cold weather conditions, Baffin products are predominantly
sold through distributors and retailers in Canada and the United States. As a wholly-owned subsidiary, Baffin is managed and
operated on a stand-alone basis, with distinct products, sales channels, and customers.
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In 2020, Canada Goose announced HUMANATURE, its purpose platform that unites its sustainability and values-based
initiatives.
Our principal office is located at 250 Bowie Avenue, Toronto, Ontario, Canada, M6E 4Y2 and our telephone number is (416)
780-9850. Our registered office is located at Suite 1700, Park Place, 666 Burrard Street, Vancouver, British Columbia, Canada,
V6C 2X8. Our website address is www.canadagoose.com. Information contained on, or accessible through, our website is not a
part of this Annual Report and the inclusion of our website address in this Annual Report is an inactive textual reference. The
SEC maintains a website at www.sec.gov that contains reports, proxy and information statements, and other information
regarding registrants that make electronic filings with the SEC using its EDGAR system. Corporation Service Company, located
at 251 Little Falls Drive, Wilmington, Delaware, is the company’s agent for service of process in the United States.
B. Growth Strategies
Our long-term growth strategy is based on the following four pillars:
Drive DTC mix higher. Since opening our first e-Commerce site in Canada in August of 2014, annual DTC revenue has grown
to $740.4m in fiscal 2022, which represents 67.4% of total revenue. DTC allows us to consistently reach consumers how and
where they want to shop, through complementary digital and retail experiences, while building deeper relationships and realizing
higher margins. We intend to continue expanding our retail stores and e-Commerce operations globally, while also growing
revenue from established distribution.
Increase penetration globally. While maintaining a focus in Canada, we plan to continue driving a higher percentage of total
revenue internationally. We believe that we have large long-term opportunities in the United States, EMEA and Asia Pacific. We
have significantly advanced the size of our business in these regions in recent years, and we plan to build on this momentum
through further market development and distribution expansion. As of April 4, 2022, we completed a joint venture in Japan with
our long-term partner, Sazaby League, Ltd., to expand our business in Japan. The joint venture entity, Canada Goose Japan,
will be the exclusive distributor of our products in Japan through a national e-Commerce site and retail and wholesale points of
distribution across the country. In addition, to expand our business in Korea, we have entered into a new distribution agreement
with Lotte GFR (“Lotte”) pursuant to which Lotte shall be the exclusive distributor of our products through the e-Commerce, retail
and wholesale channels in Korea. In fiscal 2022, 80.0% of our revenue was generated outside of Canada and 52.4% outside of
North America.
Enhance product offering. As a product-led, function-first brand we will continue to evolve and expand our offering across
styles, uses and climates. Giving people new ways to experience Canada Goose drives higher penetration and expands our
geographic appeal. While continuing to grow our outerwear business, we are building out adjacent offerings including rainwear,
windwear, knitwear, fleece, footwear and accessories.
Expand margins. As we scale our business, we plan to continue leveraging our brand and business model to drive higher
margins. As our DTC mix further increases, we expect to capture incremental gross margin on a consolidated basis and realize
higher operating margins. We also believe that we have a significant degree of pricing power with our products and we plan to
continue optimizing our pricing to capture their full value with consumers.
Sourcing and Manufacturing
Uncompromised craftsmanship begins with sourcing the right raw materials. We use premium fabrics and finishings that are built
to last.
-33-
In fiscal 2022, we achieved certification under the Responsible Down Standard (“RDS”). The RDS is an international, voluntary
program that monitors the chain of custody for certified materials and ensures that RDS down standards are maintained
throughout the entire supply chain. The RDS respects the Five Freedoms of animal welfare, prohibits live-plucking or force-
feeding in the supply chain, and stipulates that all down is a by-product of the poultry industry.
As of April 3, 2022, we operate eight Canada Goose manufacturing facilities in Toronto, Winnipeg and Greater Montreal, one
warehouse facility in Winnipeg and one Baffin manufacturing facility in Stoney Creek, Ontario. We also work with 12 Canadian
subcontractors and 14 international manufacturing partners who offer specialized expertise, which provides us with flexibility to
scale our production and effectively offer a broader range of product categories. We have been recognized by the Government
of Canada for supporting the apparel manufacturing industry in Canada.
Intellectual Property
We own the trademarks used in connection with the marketing, distribution and sale of all of our products in the United States,
Canada and in the other countries in which our products are sold. Our major trademarks include the CANADA GOOSE word
mark and the ARCTIC PROGRAM & DESIGN trademark (our disc logo consisting of the colour-inverse design of the North Pole
and Arctic Ocean). In addition to the registrations in Canada and the United States, our word mark and design are registered in
other jurisdictions which cover approximately 65 countries. Furthermore, in certain jurisdictions we register as trademarks
certain elements of our products, such as fabric, warmth categorization and style names such as our Snow Mantra parka.
We enforce our trademarks and we have taken several measures to protect our customers from counterfeiting activities. Since
2011, we have sewn a unique hologram, designed exclusively for us, into every jacket and accessory as proof of authenticity.
Additionally, our website has a tool for potential online customers to verify the integrity of third party retailers that purport to sell
our products. We are also active in enforcing rights on a global basis to our trademarks and taking action against counterfeiters,
online and in physical stores.
Seasonality
Our business is seasonal in nature. See Item 5.A - “Operating and Financial Review and Prospects” - “Management’s
Discussion and Analysis of Financial Results” - “Factors Affecting our Performance” - “Seasonality” and Item 3.D - “Risk Factors”
- “Risks Related to our Business” for a discussion.
Government Regulation
In Canada and in the other jurisdictions in which we operate, we are subject to labour and employment laws, laws governing
advertising, privacy and data security laws, safety regulations and other laws, including consumer protection regulations that
apply to retailers and/or the promotion and sale of merchandise and the operation of stores and warehouse facilities. Our
products sold outside of Canada are subject to tariffs, treaties and various trade agreements as well as laws affecting the
importation of consumer goods. We monitor changes in these laws, regulations, treaties and agreements, and believe that we
are in material compliance with applicable laws.
-34-
C. Organizational Structure
The following chart reflects our organizational structure (including the jurisdiction of formation or incorporation of the various
entities) as of May 19, 2022.
D. Property, Plants and Equipment
We maintain leased facilities for our corporate headquarters and to conduct our principal manufacturing and retail activities,
which we believe are in good condition and working order.
As of April 3, 2022, we lease 61 properties globally, which is comprised of (i) 41 permanent and two temporary directly operated
retail stores around the world, (ii) eight offices (two in Switzerland, three in Greater China, one in the United States and two in
Canada, being our current office, showroom and manufacturing facility (the “Bowie Facility”) and our future head office location),
(iii) eight additional manufacturing facilities in Canada (in addition to the Bowie Facility and including one manufacturing facility
for Baffin), (iv) one warehouse facility in Canada and (v) one distribution centre in the United States. Our manufacturing and
warehouse properties range in size from 50,000 to 170,000 square feet. We also occupy inventory space in the warehouses of
several third party logistics providers in all of our primary regions.
-35-
ITEM 4A. UNRESOLVED STAFF COMMENTS
None.
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS
See below for Management’s Discussion & Analysis of Financial Conditions and Results of Operations.
-36-
CANADA GOOSE HOLDINGS INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
For the fourth quarter and year ended April 3, 2022
The following Management’s Discussion and Analysis (“MD&A”) for Canada Goose Holdings Inc. (“us,” “we,” “our,” “Canada
Goose” or the “Company”) is dated May 18, 2022 and provides information concerning our results of operations and financial
condition for the fourth quarter and year ended April 3, 2022 (“fiscal 2022”). You should read this MD&A together with our
audited consolidated financial statements and the related notes for the year ended April 3, 2022 (“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 this Annual Report on Form 20-F.
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, political and economic disruption caused by the novel
coronavirus pandemic (“COVID-19”) and recent and ongoing geopolitical events;
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.
-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 and geopolitical events, which may
further affect general economic and operating conditions;
additional potential closures or retail traffic disruptions impacting our retail stores and the retail stores of our
wholesale partners as a result of COVID-19;
• 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;
an economic downturn and general economic conditions (for example, inflation and rising interest rates) may further
affect discretionary consumer spending;
• we may not be able to satisfy changing consumer preferences;
•
•
•
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;
• we may not be able to protect or preserve our brand image and proprietary rights;
•
•
•
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
-38-
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 Annual Financial Statements are prepared in accordance with International Financial Reporting Standards (“IFRS”) as
issued by the International Accounting Standards Board (“IASB”), and are presented in millions of Canadian dollars, except
where otherwise indicated. Certain financial measures contained in this MD&A are non-IFRS financial measures and are
discussed further under “Non-IFRS Financial Measures and Other Specified Financial Measures” below.
The Annual Financial Statements and the accompanying notes have been prepared using the accounting policies described in
note 2 to the Annual Financial Statements. The Company adopted a change in accounting policy on the treatment of
implementation costs related to Software as a Service (“SaaS”) arrangements as described in note 4 to the Annual Financial
Statements. See “Changes in Accounting Policies” for a description of the impact from adopting the agenda decision.
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. This MD&A and the accompanying Annual Financial Statements are presented in
millions of Canadian dollars.
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 for a 52-week fiscal year. 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, and the additional week was added to the third
quarter ended January 2, 2022.
All references to “fiscal 2019” are to the Company’s fiscal year ended March 31, 2019; to “fiscal 2020” are to the Company’s
fiscal year ended March 29, 2020; “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. Depreciation and amortization
for amounts not included in costs of goods sold, which were previously presented in a separate line item, are reflected in the
presentation of selling, general & administrative (“SG&A”) expenses.
-39-
SUMMARY OF FINANCIAL PERFORMANCE
The following table summarizes results of operations for the years ended April 3, 2022, March 28, 2021 and March 29, 2020 and
the fourth quarters ended April 3, 2022 and March 28, 2021, and expresses the percentage relationship to revenues of certain
financial statement captions. See “Results of Operations” for additional details and for the comparison discussions between the
years ended April 3, 2022 and March 28, 2021.
For the comparison discussions between the years ended March 28, 2021 and March 29, 2020, please refer to Item 5.
“Operating and Financial Review and Prospects” of our Annual Report on Form 20-F for the year ended March 28, 2021, filed
with the SEC on May 13, 2021, which is hereby incorporated herein by reference.
For the year ended
Fourth quarter ended
CAD $ millions (except
per share data)
Statement of Operations
data:
Revenue
Gross profit
Gross margin
Operating income
Net income (loss)
Earnings (loss) per share
Basic
Diluted
(1)
Non-IFRS Financial
Measures:
Adjusted EBIT
Adjusted EBIT margin
Adjusted net income
Adjusted net income per
basic share
Adjusted net income per
diluted share
$
$
$
$
CAD $ millions
Financial Position:
Cash
Net working capital
Total assets
Total non-current liabilities
Shareholders' equity
(1)
April 3,
2022 March 28, 2021 March 29, 2020
(2)
(2)
April 3,
2022 March 28, 2021
(2)
1,098.4
733.6
66.8 %
156.7
94.6
903.7
554.0
61.3 %
117.0
70.3
958.1
593.3
61.9 %
187.1
148.0
223.1
154.1
69.1 %
0.9
(9.1)
0.87
0.87
$
$
0.64
0.63
$
$
1.35
1.33
$
$
(0.09)
(0.09)
$
$
174.6
15.9 %
119.4
1.10
1.09
$
$
132.6
14.7 %
86.2
0.78
0.78
$
$
202.4
21.1 %
143.5
1.31
1.29
$
$
12.5
5.6 %
4.1
0.04
0.04
$
$
208.8
138.6
66.4 %
7.2
2.5
0.02
0.02
4.8
2.3 %
0.7
0.01
0.01
April 3,
2022
287.7
255.4
1,340.6
631.2
427.9
March 28, 2021
(2)
March 29, 2020
(2)
477.9
202.1
1,478.5
638.8
577.6
31.7
327.1
1,090.7
384.5
497.3
(1)
(2)
See “Non-IFRS Financial Measures and Other Specified Financial Measures” for a description of these measures and a
reconciliation to the nearest IFRS measure.
The Company adopted a change in accounting policy on the treatment of implementation costs related to Software as a
Service (“SaaS”) arrangements. See “Changes in Accounting Policies” for a description of the impact from adopting the
agenda decision and the impact of retrospective application.
-40-
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 April 3, 2022, our DTC segment
includes sales to customers through our 56 national e-Commerce markets and 41 directly operated permanent 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 segments, 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.
• 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 may be delayed due to current global conditions.
• COVID-19 pandemic. COVID-19 continues to impact the global economy and public health officials have imposed
restrictions and recommended precautions to mitigate the spread of the virus. These measures have resulted in temporary
closures of our retail locations as well as reduced traffic and store productivity, similarly impacting our wholesale partners.
Store operations have largely resumed over fiscal 2022 across our global store network, however 5 of our 41 stores continue
to remain closed globally and retail store traffic remains below pre-pandemic levels as at April 3, 2022. As a result of slower
than expected return of international retail traffic and limited time remaining on existing leases, the Company recorded $1.6m
of impairment losses on fixed assets and $6.1m of impairment losses on right-of-use assets in respect of two retail stores in
the DTC operating segment for the year ended April 3, 2022. The impairment losses were recorded as part of SG&A
expenses.
Global supply chain disruptions continue from the ongoing challenges related to COVID-19, however these disruptions have
not materially impacted our ability to fulfill demand and maintain sufficient inventory levels. While such costs have not been
material to results of operations for the year ended April 3, 2022, we continue to anticipate and monitor escalating costs
based both on freight constraints and required speed to stage inventory or deliver to consumers. All of our manufacturing
facilities were operating throughout the fourth quarter and year ended April 3, 2022 at lower than pre-pandemic output levels
to ensure appropriate distancing measures were in place. We expect to return to more normal levels of production as
restrictions and recommended precautions are lifted.
We received rent concessions in the form of abatements and deferrals and rent concessions of $0.6m were recognized in
the statement of income for the year ended April 3, 2022 (for the year ended March 28, 2021 - $4.1m).
Future developments relating to COVID-19 are highly uncertain and out of our control. Restrictions and recommended
precautions related to the Omicron variant have been weighing on and may continue to weigh on ongoing demand
improvement. Prolonged disruptions due to the pandemic, including the emergence of the new COVID-19 variants and
mutations, may negatively impact our operations and result in temporary closures of our retail stores and manufacturing
facilities, as well as our wholesale partners, lower retail store traffic, and impacts on our supply chain.
• 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
-41-
and other disruptions. To the extent that such disruptions persist, we expect that operations and traffic at our retail stores
may be impacted. We remain concerned about the conflict in Ukraine and impact on human life for those affected. In this
quarter we announced that we have suspended all wholesale and e-Commerce sales to Russia, which represented less
than 1% of total annual revenue in fiscal 2022.
• New Products. We intend to continue investing in innovation and the development and introduction of new products across
styles, uses, and climates. This includes Canada Goose footwear and Baffin branded footwear through Baffin’s own distinct
sales channels. 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.
• 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. We generated 82.4%, 86.8% and 85.7% of our annual wholesale revenue in the
combined second and third fiscal quarters of fiscal 2022, fiscal 2021, and fiscal 2020, respectively. Additionally, we
generated 85.0%, 89.3% and 79.2% of our annual DTC revenue in the combined third and fourth fiscal quarters of fiscal
2022, fiscal 2021, and fiscal 2020, respectively. 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 in the first and fourth quarters,
respectively. As a result of our seasonality, changes that impact gross margin and adjusted EBIT among others can have a
disproportionate impact on the quarterly results when they are recorded in our off-peak revenue periods. The year ended
April 3, 2022 is a 53-week year and as a result an additional week in our peak period was added to the third fiscal quarter.
This resulted in further accentuation of quarterly seasonal trends. See “Basis of Presentation”.
(1)
(1)
(1)
Adjusted EBIT is a non-IFRS measure. See “Non-IFRS Financial Measures and Other Specified 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 Mainland China Facilities (as defined
below). 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 as a result of the United
Kingdom’s exit from the European Union (“Brexit”). We continue to build flexibility within our supply chain and leverage
partners and technical resources to utilize duty savings under various Free Trade Agreements. 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 2022, 2021, and 2020, we generated 72.5%, 67.9%, and
62.3%, 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
-42-
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 the Mainland China Facilities and U.S. dollar denominated
principal and interest amounts payable on our Revolving Facility and the Term Loan Facility (as defined below). The
Company has entered into foreign exchange cross-currency swap and forward contracts to hedge a portion of the exposure
to foreign currency exchange and interest rate 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 year ended April 3,
2022 and for the year ended March 28, 2021 are summarized below:
Foreign currency exchange rate to $1.00 CAD
Fiscal 2022
Average Rate
Currency
Q1
Q2
Q3
Q4
2022
USD/CAD
EUR/CAD
GBP/CAD
CHF/CAD
CNY/CAD
HKD/CAD
1.2280
1.4804
1.7170
1.3485
0.1902
0.1581
1.2601
1.4852
1.7367
1.3723
0.1948
0.1620
1.2600
1.4409
1.6991
1.3669
0.1971
0.1618
1.2663
1.4218
1.6995
1.3707
0.1995
0.1622
1.2536
1.4571
1.7131
1.3646
0.1954
0.1610
Foreign currency exchange rate to $1.00 CAD
Fiscal 2021
Average Rate
Currency
Q1
Q2
Q3
Q4
2021
USD/CAD
EUR/CAD
GBP/CAD
CHF/CAD
CNY/CAD
HKD/CAD
1.3859
1.5256
1.7203
1.4378
0.1955
0.1788
1.3316
1.5579
1.7212
1.4486
0.1926
0.1718
1.3030
1.5537
1.7207
1.4417
0.1967
0.1681
1.2666
1.5267
1.7461
1.4003
0.1955
0.1633
1.3218
1.5410
1.7271
1.4321
0.1951
0.1705
Source: Bank of Canada
Closing Rate
April 3,
2022
1.2512
1.3816
1.6399
1.3514
0.1966
0.1597
Closing Rate
March 28,
2021
1.2580
1.4831
1.7345
1.3384
0.1923
0.1619
-43-
Components of Our Results of Operations
Revenue
DTC revenue consists of sales through our e-Commerce operations and retail stores. DTC revenue is recognized upon delivery
of the goods to the customer and when consideration is received, net of an estimated provision for sales returns.
Wholesale revenue comprises sales to third party resellers, which includes retailers and distributors of our products. 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.
Other revenue comprises sales not directly allocated to the DTC or Wholesale segments, including sales to employees and
comparative period sales of personal protective equipment (“PPE”) to federal, provincial, and local health authorities.
Gross Profit
Gross profit is our revenue less cost of sales. Cost of sales comprises the cost of manufacturing our products and goods
purchased from other manufacturers, 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. Product
development costs, primarily employee salaries and benefits, included in inventories and intangible assets are being recognized
in cost of sales accordingly. Beginning in fiscal 2021, incurred product development costs, primarily employee salaries and
benefits, are recognized in SG&A expenses. 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, and the allocation of overhead. Gross margin measures our gross profit as a percentage of revenue.
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, as well as depreciation and amortization. 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, a portion of our
Revolving Facility, the Term Loan Facility, the Mainland China Facilities, 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 previous to fiscal 2021, 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
-44-
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. Beginning in fiscal 2021, incurred product development costs, primarily employee salaries and
benefits, are recognized in SG&A expenses.
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. Operating margin measures our operating income as a percentage of
revenue.
Net Interest and Other Finance Costs
Net interest, finance and other costs represents interest expense on our borrowings including the Revolving Facility, the Term
Loan Facility, the Mainland China Facilities, and lease liabilities, as well as standby fees, net of interest income. In addition,
corporate restructuring costs have been 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.
-45-
RESULTS OF OPERATIONS
For the year ended April 3, 2022 compared to the year ended March 28, 2021
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)
Statement of Income data:
Revenue
Cost of sales
Gross profit
Gross margin
SG&A expenses
SG&A expenses as % of revenue
Operating income
Operating margin
Net interest, finance and other costs
Income before income taxes
Income tax expense
Effective tax rate
Net income
Other comprehensive loss
Comprehensive income
Earnings per share
Basic
Diluted
Weighted average number of shares outstanding
Basic
Diluted
Non-IFRS Financial Measures:
Adjusted EBIT
Adjusted EBIT margin
Adjusted net income
Adjusted net income per basic share
Adjusted net income per diluted share
(1)
$
$
$
$
April 3,
2022
1,098.4
364.8
733.6
66.8 %
576.9
52.5 %
156.7
14.3 %
39.0
117.7
23.1
19.6 %
94.6
(12.0)
82.6
0.87
0.87
$
$
For the year ended
March 28, 2021
(2)
$ Change
% Change
903.7
349.7
554.0
61.3 %
437.0
48.4 %
117.0
12.9 %
30.9
86.1
15.8
18.4 %
70.3
(5.3)
65.0
0.64
0.63
194.7
(15.1)
179.6
(139.9)
39.7
(8.1)
31.6
(7.3)
24.3
(6.7)
17.6
0.23
0.24
42.0
33.2
0.32
0.31
21.5 %
(4.3) %
32.4 %
550 bps
(32.0) %
(410) bps
33.9 %
140 bps
(26.2) %
36.7 %
(46.2) %
(120) bps
34.6 %
(126.4) %
27.1 %
35.9 %
38.1 %
31.7 %
120 bps
38.5 %
41.0 %
39.7 %
108,296,802
109,154,721
110,261,600
111,112,173
174.6
15.9 %
119.4
1.10
1.09
$
$
132.6
14.7 %
86.2
0.78
0.78
(1)
(2)
See “Non-IFRS Financial Measures and Other Specified Financial Measures” for a description of these measures and a
reconciliation to the nearest IFRS measure.
The Company adopted a change in accounting policy on the treatment of implementation costs related to Software as a
Service (“SaaS”) arrangements. See “Changes in Accounting Policies” for a description of the impact from adopting the
agenda decision and the impact of retrospective application.
-46-
Revenue
Revenue for the year ended April 3, 2022 increased by $194.7m, or 21.5%, to $1,098.4m from $903.7m for the year ended
March 28, 2021. Excluding $47.2m of temporary PPE sales in the comparative period, revenue increased by $241.9m or 28.2%.
On a constant currency basis, revenue increased by 23.2% for the year ended April 3, 2022 compared to the year ended
March 28, 2021. Revenue generated from our DTC channel represented 67.4% of total revenue for the year ended April 3, 2022
compared to 58.3% for the year ended March 28, 2021.
(1)
CAD $ millions
DTC
Wholesale
Other
Total revenue
For the year ended
April 3,
2022
740.4
348.5
9.5
1,098.4
March 28,
2021 As reported
213.2
26.3
(44.8)
194.7
527.2
322.2
54.3
903.7
Foreign
exchange
impact
7.0
8.2
—
15.2
$ Change
In constant
(1)
currency
220.2
34.5
(44.8)
209.9
As reported
40.4 %
8.2 %
(82.5)%
21.5 %
% Change
In constant
currency
41.8 %
10.7 %
(82.5)%
23.2 %
(1)
Constant currency revenue is a non-IFRS financial measure. See “Non-IFRS Financial Measures and Other Specified
Financial Measures” for a description of this measure.
Impact of 53-Week Year on Revenue
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 for a 52-week fiscal year. The additional week in a 53-week fiscal year is added to the third
quarter. Fiscal 2022 was our first 53-week fiscal year, ending on April 3, 2022, and the additional week was added to the third
quarter ended January 2, 2022. The additional week in the third quarter in fiscal 2022, which is during our peak season, had a
significant impact on revenue in the third and fourth quarter of fiscal 2022, as in the comparative period, the additional week was
included in the fourth quarter, and the final week in the fourth quarter was included in the subsequent fiscal year. The additional
week included in the reported results for the third quarter generated $40.9m in revenue and the final week in the fourth quarter
generated $5.5m in revenue.
To explain the impact of the additional week, and to facilitate comparison with the results for the year ended March 28, 2021
over a similar calendar period, the below presents revenue for the year ended April 3, 2022 on the basis of excluding the final
week of the fourth quarter ended April 3, 2022 (“53rd Week”).
For the year ended
Change
April 3,
2022
740.4
348.5
9.5
1,098.4
53rd Week
(4.7)
(0.7)
(0.1)
(5.5)
April 3, 2022
excluding 53rd
Week
735.7
347.8
9.4
1,092.9
March 28,
2021
527.2
322.2
54.3
903.7
$ Change
208.5
25.6
(44.9)
189.2
% Change
39.5 %
7.9 %
(82.7)%
20.9 %
CAD $ millions
DTC
Wholesale
Other
Total revenue
DTC
Revenue from our DTC segment for the year ended April 3, 2022 was $740.4m compared to $527.2m for the year ended March
28, 2021. The increase of $213.2m or 40.4% was attributable to higher revenue from existing retail stores, complemented by e-
Commerce growth of 15.9% and new retail expansion of the retail network. Excluding the 53rd Week, the increase in revenue
was $208.5m or 39.5%.
-47-
Wholesale
Revenue from our Wholesale segment for the year ended April 3, 2022 was $348.5m compared to $322.2m for the year ended
March 28, 2021. The increase of $26.3m or 8.2% was attributable to an increase in orders globally relative to the comparative
period.
Other
Revenue from our Other segment for the year ended April 3, 2022 was $9.5m compared to $54.3m for the year ended March
28, 2021. The decrease of $44.8m or (82.5)% was mainly attributable to $47.2m of PPE sales in the comparative period, which
were temporarily manufactured in support of COVID-19 response efforts.
Revenue by geography
For the year ended
CAD $ millions
Canada
United States
Asia Pacific
EMEA
Total revenue
(1)
April 3,
2022
219.2
303.7
328.6
246.9
1,098.4
March 28,
2021 As reported
1.5
77.6
64.6
51.0
194.7
217.7
226.1
264.0
195.9
903.7
Foreign
exchange
impact
—
6.9
0.5
7.8
15.2
$ Change
In constant
(2)
currency
1.5
84.5
65.1
58.8
209.9
As reported
0.7 %
34.3 %
24.5 %
26.0 %
21.5 %
% Change
In constant
(2)
currency
0.7 %
37.4 %
24.7 %
30.0 %
23.2 %
(1)
(2)
EMEA comprises Europe, the Middle East, Africa, and Latin America.
Constant currency revenue is a non-IFRS financial measure. See “Non-IFRS Financial Measures and Other Specified
Financial Measures” for a description of this measure.
Revenue increased in all regions during the year ended April 3, 2022 compared to the comparative period resulting from an
increase in both DTC and wholesale revenue. Revenue in Canada grew by 28.6% excluding the $47.2m of PPE sales made in
the comparative period. Including PPE, revenue in Canada increased by 0.7%. The increase in revenue in all regions was
attributable to higher revenues from existing retail stores, e-Commerce growth, retail store expansion, and wholesale growth.
Gross Profit
Gross profit and gross margin for the year ended April 3, 2022 were $733.6m and 66.8%, respectively, compared to $554.0m
and 61.3%, respectively, for the year ended March 28, 2021. The increase in gross profit of $179.6m was attributable to higher
revenue as noted above. Gross profit in the comparative period included the impact of $47.2m of non-recurring PPE sales,
$13.5m of COVID-19 related government payroll subsidies, and $4.3m of manufacturing overhead costs during a period when
production ceased due to COVID-19. Excluding the impact of these items, gross margin was 63.7% in the comparative period.
Gross margin in the current period was favourably impacted by an increased proportion of DTC revenue from the comparative
period, a lower proportion of sales to international distributors, and incremental benefits from pricing, which were partially offset
by unfavourable impacts from product mix due to higher sales in non-parka categories, typically with lower margins.
-48-
April 3,
2022
For the year ended
March 28,
2021
Gross profit Gross margin
76.0 %
47.8 %
43.2 %
563.0
166.5
4.1
733.6
66.8 %
Gross profit
(loss) Gross margin
76.3 %
402.4
47.3 %
152.4
(0.8)
(1.5)%
554.0
61.3 %
$ Change
160.6
14.1
4.9
179.6
Change in bps
(30) bps
50 bps
—
550 bps
CAD $ millions
DTC
Wholesale
Other
Total gross profit
DTC
Gross profit in our DTC segment was $563.0m for the year ended April 3, 2022 compared to $402.4m for the year ended March
28, 2021. The increase of $160.6m in gross profit was attributable to higher revenues. On a reported basis, including the benefit
of government payroll subsidies in the prior period of 80 bps, gross margin declined by 30 bps compared to the comparative
period. Hence, gross margin of 76.0% for the year ended April 3, 2022 represented an underlying increase of 50 bps when
excluding non-recurring subsidies. During the year ended April 3, 2022, gross margin was favourably impacted by incremental
benefits from pricing (+190 bps) which were partially offset by the increase in sales volumes in non-parka categories (-100 bps)
and unfavourable region mix (-30 bps) from a higher proportion of sales in North America and EMEA.
Wholesale
Gross profit in our Wholesale segment was $166.5m for the year ended April 3, 2022 compared to $152.4m for the year ended
March 28, 2021. The increase in gross profit of $14.1m was attributable to higher revenues. The gross margin was 47.8% for the
year ended April 3, 2022, an increase of 50 bps compared to 47.3% in the comparative period. Excluding the prior year benefits
from COVID-19 related government payroll subsidies (-230 bps), the gross margin in the comparative period was 45.0%. During
the year ended April 3, 2022, the increase in gross margin was driven by incremental benefits from pricing (+380 bps) and by a
higher proportion of sales to our wholesale partners compared to international distributors (+200 bps), which were partially offset
by unfavourable impacts from product mix due to higher sales in non-parka categories (-310 bps).
Other
Gross profit in our Other segment was $4.1m for the year ended April 3, 2022 compared to gross loss of $0.8m for the year
ended March 28, 2021, an increase of $4.9m. Gross profit in the prior year included $4.3m in overhead costs resulting from the
temporary closure of our manufacturing facilities due to COVID-19 and $1.5m in gross profit related to the sale of PPE. The
balance of the gross profit increase versus the comparative period is due to higher employee sales.
SG&A Expenses
SG&A expenses were $576.9m for the year ended April 3, 2022 compared to $437.0m for the year ended March 28, 2021. The
increase in SG&A expenses of $139.9m or 32.0% was attributable to $47.1m in higher costs related to new stores including the
amortization associated with leased premises accounted for as right-of-use assets, and the reopening of existing retail stores,
$19.8m of incremental investment in marketing to assist with brand awareness, the launch of footwear and support our growth
through our digital sales channels, $16.8m of incremental personnel costs, $11.1m in strategic initiatives including continuing
-49-
support of Canada Goose footwear, $6.4m related to e-Commerce volumes and infrastructure, and the loss of $13.6m of
COVID-19 government payroll subsidies. As a result of slower than expected return of international retail traffic and limited time
remaining on leases, we recorded $7.7m of impairment losses in respect of two retail stores.
CAD $ millions
DTC
Wholesale
Other
Total SG&A expenses
April 3,
2022
% of segment
revenue
31.1 %
15.9 %
—
52.5 %
Reported
229.9
55.3
291.7
576.9
For the year ended
March 28,
2021
% of segment
revenue
32.2 %
14.9 %
—
48.4 %
Reported
169.5
48.1
219.4
437.0
$
Change
(60.4)
(7.2)
(72.3)
(139.9)
% Change
(35.6)%
(15.0)%
(33.0)%
(32.0)%
Included in SG&A Expenses were Depreciation and Amortization expenses of $81.1m for the year ended April 3, 2022
compared to $62.6m for the year ended March 28, 2021, an increase of $18.5m or 29.6%. Of this increase, $16.8m was driven
by continued retail expansion.
DTC
SG&A expenses in our DTC segment for the year ended April 3, 2022 were $229.9m, or 31.1% of segment revenue, compared
to $169.5m, or 32.2% of segment revenue, for the year ended March 28, 2021. The increase of $60.4m or 35.6% was
attributable to $47.1m of higher operating costs from a larger store network, the reopening of existing retail stores and the
associated personnel costs. Additionally there were $6.4m of higher costs related to e-Commerce volumes and infrastructure.
The comparative period also benefited from $3.2m of COVID-19 related government payroll subsidies which did not recur. Pre-
store opening costs and COVID-19 related temporary store closure costs of $3.2m and $0.2m, respectively, were recognized in
the year ended April 3, 2022 compared to pre-store opening costs and COVID-19 related temporary store closure costs of
$5.2m and $7.6m, respectively, in the comparative period.
Included in SG&A Expenses were Depreciation and Amortization expenses of $70.3m for the year ended April 3, 2022
compared to $53.7m for the year ended March 28, 2021, an increase of $16.6m or 30.9%, which was largely driven by
continued retail expansion. We recorded $1.6m of impairment losses on fixed assets and $6.1m of impairment losses on right-
of-use assets as described above.
Wholesale
SG&A expenses in our Wholesale segment for the year ended April 3, 2022 were $55.3m compared to $48.1m for the year
ended March 28, 2021. The increase of $7.2m or 15.0% was attributable to $3.2m of higher freight costs driven by incremental
volume, $2.1m of service fees, and $2.6m of incremental warranty costs. The comparative period also benefited from $1.4m of
COVID-19 related government payroll subsidies which did not recur.
Other
SG&A expenses in our Other segment, which include unallocated corporate expenses, were $291.7m for the year ended April 3,
2022 compared to $219.4m for the year ended March 28, 2021. The increase of $72.3m or 33.0% was attributable to $19.2m of
incremental investment in marketing and $11.1m in strategic initiatives, $18.9m of incremental personnel costs due to headcount
growth offset by $4.8m of lower performance-based compensation. The increase
-50-
was partially offset by $6.3m of favourable foreign exchange fluctuations related to working capital denominated in currencies
other than Canadian dollars and the Term Loan Facility, net of hedge impacts. The comparable period also benefited from the
$3.0m release of a non-cash sales contract provision as a result of the expiration of the statute of limitations in the respective
jurisdiction and $9.0m of government payroll subsidies which did not recur.
Operating Income and Margin
Operating income and operating margin were $156.7m and 14.3% for the year ended April 3, 2022 compared to $117.0m and
12.9%, respectively, for the year ended March 28, 2021. The increase in operating income of $39.7m and operating margin of
+140 bps was attributable to higher gross profit, partially offset by higher operating costs.
April 3,
2022
For the year ended
March 28,
2021
Operating
income
(loss)
333.1
111.2
(287.6)
156.7
Operating
margin
Operating
income (loss)
Operating
margin
$ Change
Change in bps
45.0 %
31.9 %
—
14.3 %
232.9
104.3
(220.2)
117.0
44.2 %
32.4 %
—
12.9 %
100.2
6.9
(67.4)
39.7
80 bps
(50) bps
—
140 bps
CAD $ millions
Segment:
DTC
Wholesale
Other
Total operating income
DTC
DTC segment operating income and operating margin were $333.1m and 45.0% for the year ended April 3, 2022 compared to
$232.9m and 44.2% for the year ended March 28, 2021. Excluding impairment costs the operating margin was 46.0%. The
increase in operating income of $100.2m and operating margin of +80 bps, respectively, were attributable to improved sales
volumes from reduced COVID-19 impacts globally. This was partially offset by higher operating and personnel costs, as well as
increased depreciation and amortization due to incremental new stores and increased overall store activity relative to the
comparative period, and impairment losses. Pre-store opening costs and COVID-19 related temporary store closure costs of
$3.2m and $0.2m, respectively, were recognized in the year ended April 3, 2022 compared to pre-store opening costs and
COVID-19 related temporary store closure costs of $5.2m and $7.6m, respectively, in the comparative period.
Wholesale
Wholesale segment operating income and operating margin were $111.2m and 31.9% for the year ended April 3, 2022
compared to $104.3m and 32.4% for the year ended March 28, 2021. The increase in operating income of $6.9m was
attributable to a higher segment revenue and gross profit, partially offset by higher SG&A expenses as discussed above.
Other
Other segment operating loss was $287.6m for the year ended April 3, 2022 compared to $220.2m for the year ended March 28,
2021. The increase in operating loss of $67.4m was attributable to $72.3m 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 period.
-51-
Net Interest, Finance and Other Costs
Net interest, finance and other costs were $39.0m for the year ended April 3, 2022 compared to $30.9m for the year ended
March 28, 2021. The increase of $8.1m and 26.2% 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 $3.1m on the Term
Loan Facility due to higher gross borrowings from the comparative period. The increase in net interest, finance and other costs
was partially offset by lower interest charges of $1.3m on the Revolving Facility due to lower gross borrowings, corporate
restructuring costs of $1.7m incurred in the comparative period, and $1.1m attributable to the acceleration of unamortized costs
in connection with the Refinancing Amendment that took place in the comparative period.
Income Taxes
Income tax expense was $23.1m for the year ended April 3, 2022 compared to $15.8m for the year ended March 28, 2021. For
the year ended April 3, 2022, the effective and statutory tax rates were 19.6% and 25.4%, respectively, compared to 18.4% and
25.4% for the year ended March 28, 2021, 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 as well as the derecognition of deferred tax assets
associated with tax relief from Swiss Tax Reform and non-capital losses in fiscal 2022.
Net Income
Net income for the year ended April 3, 2022 was $94.6m compared to $70.3m for the year ended March 28, 2021, driven by the
factors described above.
-52-
For the fourth quarter ended April 3, 2022 compared to the fourth quarter ended March 28, 2021
The following table summarizes results of operations and expresses the percentage relationship to revenues of certain financial
statement captions.
CAD $ millions
(except share and per share data)
Statement of (Loss) Income data:
Revenue
Cost of sales
Gross profit
Gross margin
SG&A expenses
SG&A expenses as % of revenue
Operating income
Operating margin
Net interest, finance and other costs
Loss before income taxes
Income tax expense (recovery)
Effective tax rate
Net (loss) income
Other comprehensive loss
Comprehensive loss
(Loss) earnings per share
Basic
Diluted
Weighted average number of shares outstanding
Basic
Diluted
(1)
Non-IFRS Financial Measures:
Adjusted EBIT
(2)
Adjusted EBIT margin
Adjusted net income
Adjusted net income per basic share
Adjusted net income per diluted share
Fourth quarter ended
March 28, 2021
(3)
$ Change
April 3,
2022
223.1
69.0
154.1
69.1 %
153.2
68.7 %
0.9
0.4 %
7.0
(6.1)
3.0
(49.2)%
(9.1)
(2.3)
(11.4)
208.8
70.2
138.6
66.4 %
131.4
62.9 %
7.2
3.4 %
8.2
(1.0)
(3.5)
350.0 %
2.5
(8.0)
(5.5)
%
Change
6.8 %
1.7 %
11.2 %
270 bps
(16.6) %
(580) bps
(87.5) %
(300) bps
14.6 %
(510.0) %
(185.7) %
(39,920) bps
(464.0) %
71.3 %
(107.3) %
(550.0) %
(550.0) %
160.4 %
330 bps
485.7 %
300.0 %
300.0 %
14.3
1.2
15.5
(21.8)
(6.3)
1.2
(5.1)
(6.5)
(11.6)
5.7
(5.9)
(0.11)
(0.11)
7.7
3.4
0.03
0.03
$
$
$
$
(0.09)
(0.09)
$
$
0.02
0.02
$
$
106,133,970
106,133,970
110,367,711
111,364,712
12.5
5.6 %
4.1
0.04
0.04
$
$
4.8
2.3 %
0.7
0.01
0.01
$
$
(1)
(2)
(3)
Subordinate voting shares issuable on exercise of stock options are not treated as dilutive if including them would decrease
the loss per share. Accordingly, 564,433 potentially dilutive shares have been excluded from the calculation of diluted loss
per share for the fourth quarter ended April 3, 2022.
See “Non-IFRS Financial Measures and Other Specified Financial Measures” for a description of these measures and a
reconciliation to the nearest IFRS measure.
The Company adopted a change in accounting policy on the treatment of implementation costs related to Software as a
Service (“SaaS”) arrangements. See “Changes in Accounting Policies” for a description of the impact from adopting the
agenda decision and the impact of retrospective application.
-53-
Revenue
Revenue for the fourth quarter ended April 3, 2022 was $223.1m, an increase of $14.3m, or 6.8%, from $208.8m for the fourth
quarter ended March 28, 2021. Revenue generated from our DTC channel represented 83.1% of total revenue for the fourth
quarter ended April 3, 2022 compared to 82.2% for the fourth quarter ended March 28, 2021. On a constant currency basis,
revenue increased by 7.2% for the fourth quarter ended April 3, 2022 compared to the fourth quarter ended March 28, 2021.
(1)
Fourth quarter ended
CAD $ millions
DTC
Wholesale
Other
Total revenue
April 3,
2022
185.4
35.1
2.6
223.1
March 28,
2021 As reported
13.8
1.2
(0.7)
14.3
171.6
33.9
3.3
208.8
Foreign
exchange
impact
(0.5)
1.2
—
0.7
$ Change
In constant
(1)
currency
13.3
2.4
(0.7)
15.0
As reported
8.0 %
3.5 %
(21.2)%
6.8 %
% Change
In constant
(1)
currency
7.8 %
7.1 %
(21.2)%
7.2 %
(1)
Constant currency revenue is a non-IFRS financial measure. See “Non-IFRS Financial Measures and Other Specified
Financial Measures” for a description of these measures.
Impact of 53-Week Year on Revenue
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 for a 52-week fiscal year. The additional week in a 53-week fiscal year is added to the third
quarter. Fiscal 2022 was our first 53-week fiscal year, ending on April 3, 2022, and the additional week was added to the third
quarter ended January 2, 2022. The additional week in the third quarter in fiscal 2022, which is during our peak season, had a
significant impact on revenue in the third and fourth quarter of fiscal 2022, as in the comparative period, the additional week was
included in the fourth quarter, and the final week in the fourth quarter was included in the subsequent fiscal year. The additional
week which was previously reported in the third quarter generated $40.9m in revenue and the final week in the fourth quarter
generated $5.5m in revenue.
To explain the impact of the additional week, and to facilitate comparison with the results for the fourth quarter ended March 28,
2021 over a similar calendar period, the below presents revenue for the fourth quarter ended April 3, 2022 on the basis of
excluding the 53rd Week and including the last week of the third quarter ended January 2, 2022 (“14th Week”).
Fourth quarter ended
Change
April 3,
2022
185.4
35.1
2.6
223.1
14th Week
38.6
2.1
0.2
40.9
53rd Week
(4.7)
(0.7)
(0.1)
(5.5)
April 3, 2022 including
14th Week, excluding
53rd Week
219.3
36.5
2.7
258.5
March 28,
2021
171.6
33.9
3.3
208.8
$ Change
47.7
2.6
(0.6)
49.7
% Change
27.8 %
7.7 %
(18.2)%
23.8 %
CAD $ millions
DTC
Wholesale
Other
Total revenue
DTC
Revenue from our DTC segment was $185.4m for the fourth quarter ended April 3, 2022 compared to $171.6m for the fourth
quarter ended March 28, 2021. The increase of $13.8m or 8.0% was attributable to higher revenue from existing stores and new
retail expansion partially offset with a decrease in e-Commerce revenue of 12.3%. Excluding the 53-week, and including
-54-
the last week of Q3, revenue increased by $33.9m resulting in growth of 27.8% for DTC, with e-Commerce growing at 1.2%.
Wholesale
Revenue from our Wholesale segment was $35.1m for the fourth quarter ended April 3, 2022 compared to $33.9m for the fourth
quarter ended March 28, 2021. The increase of $1.2m or 3.5% was attributable to higher order values. Excluding the 53-week,
and including the last week of Q3, revenue increased by $1.4m, resulting in growth of 7.7%.
Other
Revenue from our Other segment was $2.6m for the fourth quarter ended April 3, 2022 compared to $3.3m for the fourth quarter
ended March 28, 2021. The decrease of $0.7m or (21.2)% was attributable to a decrease in employee sales.
Revenue by geography
CAD $ millions
Canada
United States
Asia Pacific
EMEA
Total revenue
(1)
Fourth quarter ended
April 3,
2022
40.2
70.5
70.6
41.8
223.1
March 28,
2021 As reported
1.0
39.2
14.6
55.9
(7.1)
77.7
5.8
36.0
14.3
208.8
Foreign
exchange
impact
—
0.6
(1.8)
1.9
0.7
$ Change
In constant
(2)
currency
1.0
15.2
(8.9)
7.7
15.0
As reported
2.6 %
26.1 %
(9.1)%
16.1 %
6.8 %
% Change
In constant
(2)
currency
2.6 %
27.2 %
(11.5)%
21.4 %
7.2 %
(1)
(2)
EMEA comprises Europe, the Middle East, Africa, and Latin America.
Constant currency revenue is a non-IFRS financial measure. See “Non-IFRS Financial Measures and Other Specified
Financial Measures” for a description of these measures.
Revenue increased in Canada, the United States and EMEA for the fourth quarter ended April 3, 2022 compared to the
comparative quarter resulting from an increase in DTC revenue. Asia Pacific decreased due to lower DTC revenue.
Gross Profit
Gross profit and gross margin for the fourth quarter ended April 3, 2022 were $154.1m and 69.1%, respectively, compared to
$138.6m and 66.4%, respectively, for the fourth quarter ended March 28, 2021. The increase in gross profit of $15.5m was
attributable to higher revenue as noted above. Gross margin in the current quarter was favourably impacted by incremental
benefits from pricing partially offset by unfavourable impacts from product mix due to higher sales in non-parka categories,
typically with lower margins.
-55-
April 3,
2022
Gross profit Gross margin
76.1 %
33.6 %
46.2 %
141.1
11.8
1.2
154.1
69.1 %
CAD $ millions
DTC
Wholesale
Other
Total gross profit
DTC
Fourth quarter ended
March 28,
2021
Gross profit Gross margin
74.1 %
31.9 %
18.2 %
127.2
10.8
0.6
138.6
66.4 %
$ Change
13.9
1.0
0.6
15.5
Change in bps
200 bps
170 bps
—
270 bps
Gross profit in our DTC segment was $141.1m for the fourth quarter ended April 3, 2022 compared to $127.2m for the fourth
quarter ended March 28, 2021. The gross margin was 76.1% for the fourth quarter ended April 3, 2022, an increase of +200 bps
compared to 74.1% in the comparative quarter. During the fourth quarter ended April 3, 2022, gross margin was favourably
impacted by incremental impacts from pricing (+180 bps).
Wholesale
Gross profit in our Wholesale segment was $11.8m for the fourth quarter ended April 3, 2022 compared to $10.8m for the fourth
quarter ended March 28, 2021. The increase of $1.0m in gross profit was attributable to lower revenues in 2021. The gross
margin was 33.6% for the fourth quarter ended April 3, 2022, an increase of +170 bps compared to 31.9% in the comparative
quarter. The gross margin in the comparative quarter included COVID-19 related government payroll benefits (+90 bps),
excluding this impact, gross margin was 32.8% in the comparative year. During the fourth quarter ended April 3, 2022, gross
margin was favourably impacted by the higher proportion of sales to our wholesale partners compared to international
distributors (+110 bps).
Other
Gross profit in our Other segment was $1.2m respectively, for the fourth quarter ended April 3, 2022 compared to gross profit of
$0.6m for the fourth quarter ended March 28, 2021, an increase of $0.6m from employee sales with higher margins.
SG&A Expenses
SG&A expenses were $153.2m for the fourth quarter ended April 3, 2022 compared to $131.4m for the fourth quarter ended
March 28, 2021. The increase of $21.8m or 16.6% was attributable to $10.6m higher costs related to incremental new stores
and the reopening of existing retail stores, $4.2m of unfavourable foreign exchange fluctuations related to working capital
denominated in currencies other than Canadian dollars and the Term Loan Facility, net of hedge impacts and $4.8m in strategic
initiatives, including digital capabilities and ongoing support of Canada Goose footwear. The increase was partially offset by
$6.2m of reduced marketing expenditures due to a timing shift in activities. As a result of slower than expected return of
international retail traffic and limited time remaining on existing leases, we recorded $7.7m of impairment losses in respect of
two retail stores in the DTC operating segment in the current quarter.
-56-
CAD $ millions
DTC
Wholesale
Other
Total SG&A expenses
April 3,
2022
% of segment
revenue
37.4 %
35.9 %
—
68.7 %
Reported
69.4
12.6
71.2
153.2
Fourth quarter ended
March 28,
2021
% of segment
revenue
30.6 %
40.7 %
—
Reported
52.5
13.8
65.1
131.4
62.9 %
$ Change
(16.9)
1.2
(6.1)
(21.8)
% Change
(32.2)%
8.7 %
(9.4)%
(16.6)%
Depreciation and amortization, included above, was $21.6m for the fourth quarter ended April 3, 2022 compared to $17.4m for
the fourth quarter ended March 28, 2021, an increase of $4.2m of which $3.8m was attributable to continued retail expansion.
DTC
SG&A expenses in our DTC segment for the fourth quarter ended April 3, 2022 were $69.4m, or 37.4% of segment revenue,
compared to $52.5m, or 30.6% of segment revenue, for the fourth quarter ended March 28, 2021. The increase of $16.9m or
32.2% was attributable to $18.3m of higher operating costs due to incremental new stores and the reopening of existing retail
stores including personnel costs. Additionally, there were $1.1m of higher costs related to e-Commerce volumes and to support
our e-Commerce platform. These increases were partially offset by a $2.2m reduction in warranty costs. The comparative
quarter also benefited from $0.8m of COVID-19 related government payroll subsidies which did not recur. Pre-store opening
costs and COVID-19 related temporary store closure costs of less than $0.1m and $nil, respectively, were recognized in the
fourth quarter ended April 3, 2022 compared to pre-store opening costs and COVID-19 related temporary store closure costs of
$0.3m and $0.3m, respectively, in the comparative quarter.
Depreciation and amortization, included above, was $19.0m for the fourth quarter ended April 3, 2022 compared to $15.3m for
the fourth quarter ended March 28, 2021, an increase of $3.7m, which was largely attributable to continued retail expansion.
We also recorded $7.7m of impairment losses as described above.
Wholesale
SG&A expenses in our Wholesale segment for the fourth quarter ended April 3, 2022 were $12.6m, or 35.9% of segment
revenue, compared to $13.8m, or 40.7% of segment revenue, for the fourth quarter ended March 28, 2021. The decrease of
$1.2m or 8.7% was attributable to $3.3m of lower warranty costs partially offset by $1.0m of higher freight costs, $0.5m of higher
marketing costs and $0.3m of higher service fees.
Other
SG&A expenses in our Other segment, which include unallocated corporate expenses, were $71.2m for the fourth quarter
ended April 3, 2022 compared to $65.1m for the fourth quarter ended March 28, 2021. The increase of $6.1m or 9.4% was
attributable $5.0m in strategic initiatives, $4.1m unfavourable foreign exchange fluctuations related to working capital
denominated in currencies other than Canadian dollars and the Term Loan Facility, net of hedge impacts and $3.1m increase
driven by transaction related legal costs. The increase was partially offset by $6.6m of reduced marketing expenditures due to
timing of activities.
-57-
Operating Income and Margin
Operating income and operating margin were $0.9m and 0.4% for the fourth quarter ended April 3, 2022 compared to operating
income and operating margin of $7.2m and 3.4% the fourth quarter ended March 28, 2021. The decrease in operating income of
$6.3m and operating margin of 300 bps were attributable to higher operating and impairment costs noted above, partially offset
by higher gross profit.
April 3,
2022
Operating
margin
Fourth quarter ended
March 28,
2021
Operating
margin
Operating
income (loss)
Operating
income (loss)
$ Change Change in bps
71.7
(0.8)
(70.0)
0.9
38.7 %
(2.3)%
—
0.4 %
74.7
(3.0)
(64.5)
7.2
43.5 %
(8.8)%
—
3.4 %
(3.0)
2.2
(5.5)
(6.3)
(480)bps
650 bps
—
(300)bps
CAD $ millions
Segment:
DTC
Wholesale
Other
Total operating income
DTC
DTC segment operating income was $71.7m for the fourth quarter ended April 3, 2022 compared to $74.7m for the fourth
quarter ended March 28, 2021. Despite improved sales volumes, operating income and operating margin decreased by $3.0m
and 480 bps, respectively. Excluding impairment losses as described above, operating income was $79.4m and operating
margin was 42.8%. Pre-store opening costs and COVID-19 related temporary store closure costs of less than $0.1m and $nil ,
respectively, were recognized in the fourth quarter ended April 3, 2022 compared to pre-store opening costs and COVID-19
related temporary store closure costs of $0.4m and $0.7m, respectively, in the comparative quarter.
Wholesale
Wholesale segment operating loss and operating margin were $0.8m and (2.3)% for the fourth quarter ended April 3, 2022
compared to $3.0m and (8.8)% for the fourth quarter ended March 28, 2021. The decrease in operating loss of $2.2m and
increase in operating margin of 650 bps were attributable to a higher segment revenue and gross profit, as well as lower SG&A
expenses as discussed above.
Other
Other segment operating loss was $70.0m for the fourth quarter ended April 3, 2022 compared to $64.5m for the fourth quarter
ended March 28, 2021. The increase in operating loss of $5.5m was attributable to higher SG&A expenses as discussed above.
Net Interest, Finance and Other Costs
Net interest, finance and other costs were $7.0m for the fourth quarter ended April 3, 2022 compared to $8.2m for the fourth
quarter ended March 28, 2021. The decrease of $1.2m or 14.6% was driven by lower interest charges of $1.0m on the Term
Loan Facility due to a lower average interest rate on borrowings in the comparative quarter.
-58-
Income Taxes
Income tax expense was $3.0m for the fourth quarter ended April 3, 2022 compared to income tax recovery of $3.5m for the
fourth quarter ended March 28, 2021. For the fourth quarter ended April 3, 2022, the effective and statutory tax rates were
(49.20)% and 25.4%, respectively, compared to 350.0% and 25.4% for the fourth quarter ended March 28, 2021. 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. Also, the reduction in deferred tax assets related to the Swiss Tax Reform and non-capital losses contributed to net tax
expense during a quarter of overall loss while in the prior year, there were less non-deductible expenses, creating a positive rate
recovery.
Net Loss (Income)
Net loss for the fourth quarter ended April 3, 2022 was $9.1m compared to net income of $2.5m for the fourth quarter ended
March 28, 2021, driven by the factors described above.
Quarterly Financial Information
CAD $ millions (except per
share data)
(2)
Revenue
DTC
Wholesale
Other
Total
% of fiscal year revenue
Net (loss) income
(Loss) earnings per share
Basic
Diluted
(1)
Adjusted EBIT
Adjusted net income (loss)
per diluted share
(1)
Fiscal 2022
Fiscal 2021
Fourth
Quarter
Third
Quarter
Second
Quarter
First
Quarter
Fourth
Quarter
Third
Quarter
Second
Quarter First Quarter
185.4
35.1
2.6
223.1
20.3 %
(9.1)
443.9
138.2
4.0
586.1
53.4 %
151.3
82.0
149.1
1.8
232.9
21.2 %
9.9
$
$
(0.09)
(0.09)
12.5
1.42
1.40
206.0
$
$
$
$
0.09
0.09
17.4
29.1
26.1
1.1
56.3
5.1 %
(57.5)
(0.52)
(0.52)
(61.3)
0.04
$
1.41
$
0.13
$
(0.46)
171.6
33.9
3.3
208.8
23.1 %
2.5
299.1
161.1
13.8
474.0
52.5 %
107.0
46.2
118.5
30.1
194.8
21.6 %
10.6
$
$
0.02
0.02
4.8
0.97
0.96
157.9
$
$
$
$
0.10
0.10
16.0
10.4
8.7
7.0
26.1
2.9 %
(49.8)
(0.45)
(0.45)
(46.1)
0.01
$
1.01
$
0.11
$
(0.35)
$
$
$
$
$
$
(1)
(2)
See “Non-IFRS Financial Measures and Other Specified Financial Measures” for a description of these measures and a
reconciliation to the nearest IFRS measure for the current and comparative period.
The Company adopted a change in accounting policy on the treatment of implementation costs related to Software as a
Service (“SaaS”) arrangements. See “Changes in Accounting Policies” for a description of the impact from adopting the
agenda decision and the impact of retrospective application.
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 negative or reduced in the fourth quarter as we invest ahead of our peak season.
-59-
Revenue
Over the last eight quarters, revenue has been impacted by the following:
•
the extra week in fiscal 2022 which has been added to the third quarter, as this fiscal year is our first 53-week year;
• COVID-19 beginning in the fourth quarter of fiscal 2020;
•
•
•
•
•
•
•
•
•
•
timing of store openings;
launch and expansion of international e-Commerce sites;
timing and extent of SG&A, including demand generation activities;
increased manufacturing flexibility with higher 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;
shift in geographic mix of sales to increase sales outside of Canada;
fluctuation of foreign currencies relative to the Canadian dollar;
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 the Baffin acquisition, and amendments to long-term
debt agreements; and
-60-
•
the proportion of taxable income in non-Canadian jurisdictions and changes to rates and tax legislation in those
jurisdictions.
NON-IFRS FINANCIAL MEASURES AND OTHER SPECIFIED FINANCIAL MEASURES
The Company uses certain financial measures that are “non-IFRS financial measures”, including adjusted EBIT, adjusted
EBITDA, adjusted net income, constant currency revenue, net debt, net working capital, and free operating cash flow, as well as
certain financial measures that are “non-IFRS ratios”, including adjusted EBIT margin, adjusted net income per basic and diluted
share, net debt leverage, and net working capital turnover, in each case in this document and other documents. These financial
measures are employed by the Company to measure its operating and economic performance and to assist in business
decision-making, as well as providing key performance information to senior management. The Company believes that, in
addition to conventional measures prepared in accordance with IFRS, certain investors and analysts use this information to
evaluate the Company’s operating and financial performance. These financial measures are not defined under IFRS nor do they
replace or supersede any standardized measure under IFRS. Other companies in our industry may calculate these measures
differently than we do, limiting their usefulness as comparative measures.
For the year ended
Fourth quarter ended
CAD $ millions (except per share data)
Adjusted EBIT
Adjusted EBIT margin
Adjusted EBITDA
Adjusted net income
Adjusted net income per basic share
Adjusted net income per diluted share
Free operating cash flow
April 3,
2022 March 28, 2021
(1)
April 3,
2022 March 28, 2021
(1)
174.6
15.9 %
268.1
119.4
1.10
1.09
67.5
$
$
132.6
14.7 %
202.0
86.2
0.78
0.78
222.9
$
$
12.5
5.6 %
38.3
4.1
0.04
0.04
(49.5)
$
$
$
$
4.8
2.3 %
25.3
0.7
0.01
0.01
22.8
(1)
The Company adopted a change in accounting policy on the treatment of implementation costs related to Software as a
Service (“SaaS”) arrangements. See “Changes in Accounting Policies” for a description of the impact from adopting the
agenda decision and the impact of retrospective application.
CAD $ millions
Net debt
Net working capital
April 3,
2022
(333.8)
255.4
March 28,
2021
(154.2)
202.1
Adjusted EBIT, adjusted EBIT margin, adjusted EBITDA, adjusted net income, and adjusted net income per basic and diluted
share
These 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 COVID-19, that we believe are not otherwise 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.
-61-
For the years ended April 3, 2022 and March 28, 2021, we believe that identifying certain costs directly resulting from the impact
of COVID-19 and excluding these amounts from our calculation of the non-IFRS financial 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 year ended April 3, 2022, 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 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 cash less total borrowings and lease liabilities, 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 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 year.
-62-
The tables below reconcile net income to adjusted EBIT, adjusted EBITDA and adjusted net income 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.
CAD $ millions
Net income (loss)
Add (deduct) the impact of:
Income tax expense (recovery)
Net interest, finance and other costs
Operating Income
Unrealized foreign exchange loss (gain) on Term
Loan Facility (a)
Share-based compensation (b)
Net temporary store closure costs (c)
Net excess overhead costs from temporary closure
of manufacturing facilities (c)
Pre-store opening costs (d)
Transition of logistics agencies (g)
Costs of the Baffin acquisition (h)
Non-cash provision release (i)
Joint Venture transaction costs (j)
Impairment losses (k)
Other (n)
Total adjustments
Adjusted EBIT
Adjusted EBIT margin
For the year ended
March 28,
(1)
2021
70.3
April 3,
2022
94.6
Fourth quarter ended
April 3,
2022
(9.1)
March 28, 2021
2.5
(1)
23.1
39.0
156.7
2.7
0.2
0.2
—
3.2
0.1
—
—
0.7
7.7
3.1
17.9
174.6
15.8
30.9
117.0
(1.7)
0.5
7.5
4.3
5.2
2.2
1.0
(3.0)
—
—
(0.4)
15.6
132.6
3.0
7.0
0.9
1.1
—
—
—
0.1
—
—
—
0.7
7.7
2.0
11.6
12.5
15.9 %
14.7 %
5.6 %
(3.5)
8.2
7.2
(3.1)
0.2
0.7
—
0.4
—
—
—
—
—
(0.6)
(2.4)
4.8
2.3 %
(1)
The Company adopted a change in accounting policy on the treatment of implementation costs related to Software as a
Service (“SaaS”) arrangements. See “Changes in Accounting Policies” for a description of the impact from adopting the
agenda decision and the impact of retrospective application.
-63-
CAD $ millions
Net income (loss)
Add (deduct) the impact of:
Income tax expense (recovery)
Net interest, finance and other costs
Operating Income
Unrealized foreign exchange loss (gain) on Term Loan
Facility (a)
Share-based compensation (b)
Net temporary store closure costs (c)
Net excess overhead costs from temporary closure of
manufacturing facilities (c)
Pre-store opening costs (d)
Transition of logistics agencies (g)
Costs of the Baffin acquisition (h)
Non-cash provision release (i)
Joint Venture transaction costs (j)
Impairment losses (k)
Other (n)
Depreciation and amortization (o)
Temporary store closure costs - depreciation (e)
Pre-store opening costs - depreciation (f)
Adjusted EBITDA
For the year ended
March 28,
(1)
2021
70.3
April 3,
2022
94.6
23.1
39.0
156.7
2.7
0.2
0.2
—
3.2
0.1
—
—
0.7
7.7
3.1
95.8
(0.2)
(2.1)
268.1
15.8
30.9
117.0
(1.7)
0.5
7.5
4.3
5.2
2.2
1.0
(3.0)
—
—
(0.4)
77.4
(5.0)
(3.0)
202.0
Fourth quarter ended
March 28,
(1)
2021
April 3,
2022
(9.1)
3.0
7.0
0.9
1.1
—
—
—
0.1
—
—
—
0.7
7.7
2.0
25.8
—
—
38.3
2.5
(3.5)
8.2
7.2
(3.1)
0.2
0.7
—
0.4
—
—
—
—
—
(0.6)
21.0
(0.4)
(0.1)
25.3
(1)
The Company adopted a change in accounting policy on the treatment of implementation costs related to Software as a
Service (“SaaS”) arrangements. See “Changes in Accounting Policies” for a description of the impact from adopting the
agenda decision and the impact of retrospective application.
-64-
CAD $ millions
Net income (loss)
Add (deduct) the impact of:
Unrealized foreign exchange loss (gain) on
Term Loan Facility (a)
Share-based compensation (b)
Net temporary store closure costs (c) (e)
Net excess overhead costs from temporary
closure of manufacturing facilities (c)
Pre-store opening costs (d) (f)
Transition of logistics agencies (g)
Costs of the Baffin acquisition (h)
Non-cash provision release (i)
Joint Venture transaction costs (j)
Impairment losses (k)
Deferred tax adjustment (l)
Acceleration of unamortized costs on Term
Loan Facility Repricing (m)
Restructuring expense (c)
Other (n)
Total adjustments
Tax effect of adjustments
Adjusted net income
For the year ended
Fourth quarter ended
April 3,
2022
94.6
2.7
0.2
0.2
—
3.6
0.1
—
—
0.7
7.7
4.5
9.5
—
3.1
32.3
(7.5)
119.4
March 28, 2021
(1)
70.3
(1.7)
0.5
9.0
4.3
6.0
2.2
1.0
(3.0)
—
—
—
1.1
1.7
(0.2)
20.9
(5.0)
86.2
April 3,
2022
(9.1)
1.1
—
—
—
0.1
—
—
—
0.7
7.7
4.5
—
—
2.0
16.1
(2.9)
4.1
March 28, 2021
(1)
2.5
(3.1)
0.2
0.9
—
0.6
—
—
—
—
—
—
—
—
(0.6)
(2.0)
0.2
0.7
(1)
The Company adopted a change in accounting policy on the treatment of implementation costs related to Software as a
Service (“SaaS”) arrangements. See “Changes in Accounting Policies” for a description of the impact from adopting the
agenda decision and the impact of retrospective application.
(a) Unrealized gains and losses on the translation of the Term Loan Facility from USD to CAD, net of the effect of derivative
transactions entered into to hedge a portion of the exposure to foreign currency exchange risk.
(b) Non-cash based compensation expense on stock options issued prior to the Company’s initial public offering (“IPO”) under
the Legacy Plan and cash payroll taxes paid of $nil and $0.1m in the fourth quarter and year ended April 3, 2022,
respectively, (fourth quarter and year ended March 28, 2021 - $0.2m and $0.2m, respectively) on gains earned by option
holders (compensation) when stock options are exercised.
(c) Net temporary store closure costs of $nil and $0.2m were incurred in the fourth quarter and year ended April 3, 2022,
respectively. These were comprised of temporary store costs of $nil and $0.4m, partially offset by government subsidies of
$nil and $0.2m in Europe in the fourth quarter and year ended April 3, 2022, respectively. Globally, government subsidies of
-65-
$0.4m and $27.5m were recognized in the fourth quarter and year ended March 28, 2021, respectively. Government
subsidies were recorded as a reduction to excess overhead costs from temporary closure of manufacturing facilities ($nil
and $1.3m), temporary store closure costs ($0.4m and $1.8m), and restructuring expense ($nil and $0.4m), for the fourth
quarter and year ended March 28, 2021, respectively. The benefit of $0.4m and $24.0m of government subsidies therefore
remained in adjusted EBIT as a reduction to the associated wage costs for the fourth quarter and year ended March 28,
2021, respectively.
(d) Costs incurred during pre-opening periods for new retail stores, including depreciation on right-of-use assets.
(e) Includes $nil and less than $0.1m of interest expense on lease liabilities for temporary store closures for the fourth quarter
and year ended April 3, 2022, respectively (fourth quarter and year ended March 28, 2021 - $0.1m and $1.5m, respectively).
(f) Pre-store opening costs incurred in (d) above as well as less than $0.1m and $0.4m of interest expense on lease liabilities
for new retail stores during pre-opening periods in the fourth quarter and year ended April 3, 2022, respectively (fourth
quarter and year ended March 28, 2021 - $0.2m and $0.8m, respectively).
(g) Costs incurred for the transition of logistics, warehousing, and freight forwarding agencies to enhance our global distribution
structure.
(h) Costs in connection with the Baffin acquisition and the impact of gross margin that would otherwise have been recognized
on inventory recorded at net realizable value less costs to sell.
(i) Release of a non-cash sales contract provision as a result of the expiration of the statute of limitations in the respective
jurisdiction in the year ended March 28, 2021.
(j) Acquisition and transactions costs related to the Japanese joint venture recognized in the year ended April 3, 2022.
(k) Impairment losses for non-financial retail assets recorded as the result of the annual impairment assessment for the year
ended April 3, 2022.
(l) Deferred tax adjustment recorded as the result of Swiss tax reform in Canada Goose International AG in the year ended
April 3, 2022.
(m) Non-cash unamortized costs accelerated in connection with the Repricing Amendment on April 9, 2021 during the year
ended April 3, 2022 and the amendments to the Term Loan Facility on October 7, 2020 and May 10, 2019 for the year ended
March 28, 2021.
(n) Costs for legal proceeding fees including for the defense of class action lawsuits and rent abatements received.
(o) Adjusted EBITDA is calculated as adjusted EBIT plus depreciation and amortization as determined in accordance with IFRS,
less the depreciation impact for both temporary store closures (e) and pre-store opening costs (f). Depreciation and
amortization includes depreciation on right-of-use assets under IFRS 16, Leases.
-66-
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
Financial Condition
The following table represents our net working capital
position as at April 3, 2022 and March 28, 2021:
(1)
CAD $ millions
Current assets
Deduct: Cash
Current assets, net of cash
Current liabilities
Deduct the impact of:
Short-term borrowings
Current portion of lease liabilities
Current liabilities, net of short-term borrowings
and current portion of lease liabilities
Net working capital
April 3,
2022
762.3
(287.7)
474.6
281.5
(3.8)
(58.5)
219.2
255.4
March 28,
2021
896.9
(477.9)
419.0
262.1
—
(45.2)
216.9
202.1
$ Change
(134.6)
190.2
55.6
19.4
(3.8)
(13.3)
2.3
53.3
% Change
(15.0)%
(39.8)%
13.3 %
7.4 %
— %
29.4 %
1.1 %
26.4 %
(1)
See “Non-IFRS Financial Measures and Other Specified Financial Measures” for a description of these measures.
As at April 3, 2022, we had $255.4m of net working capital compared to $202.1m of net working capital as at March 28, 2021.
The $53.3m increase, or 26.4%, was attributable to a $51.0m increase in inventory. Net working capital turnover
was 25.3% in
the year ended April 3, 2022.
(1)
-67-
Cash Flows
The following table summarizes the Company’s consolidated statement of cash flows for the year ended April 3, 2022 compared
to the year ended March 28, 2021, and for the fourth quarter ended April 3, 2022 compared to the fourth quarter ended March
28, 2021.
CAD $ millions
Total cash provided by (used
in):
Operating activities
Investing activities
Financing activities
Effects of foreign currency
exchange rate changes on
cash
(Decrease) increase in cash
Cash, beginning of period
Cash, end of period
Free operating cash flow
(1)
For the year ended
March 28,
(2)
2021
April 3,
2022
$ Change
Fourth quarter ended
March 28,
(2)
2021
April 3,
2022
$ Change
151.6
(37.2)
(298.2)
(6.4)
(190.2)
477.9
287.7
67.5
288.6
(26.9)
197.0
(12.5)
446.2
31.7
477.9
222.9
(137.0)
(10.3)
(495.2)
6.1
(636.4)
446.2
(190.2)
(155.4)
(21.6)
(13.8)
(80.5)
(4.5)
(120.4)
408.1
287.7
(49.5)
42.6
(8.8)
(17.3)
(7.6)
8.9
469.0
477.9
22.8
(64.2)
(5.0)
(63.2)
3.1
(129.3)
(60.9)
(190.2)
(72.3)
(1)
(2)
See “Non-IFRS Financial Measures and Other Specified Financial Measures” for a description of this measure - and “Free
operating cash flow” for a reconciliation to the nearest IFRS measure.
The Company adopted a change in accounting policy on the treatment of implementation costs related to Software as a
Service (“SaaS”) arrangements. See “Changes in Accounting Policies” for a description of the impact from adopting the
agenda decision and the impact of retrospective application.
Cash Requirements
Our primary need for liquidity is to fund net working capital, capital expenditures, debt services, and general corporate
requirements of our business. Our primary source of liquidity to meet our cash requirements is cash generated from operating
activities over our annual operating cycle. We also utilize the Mainland China Facilities, the Revolving Facility, and the Trade
accounts receivable factoring program to provide short-term liquidity and to have funds available for net working capital. Our
ability to fund our operations, invest in planned capital expenditures, meet debt obligations, and repay or refinance indebtedness
depends on our future operating performance and cash flows, which are subject, but not limited to, prevailing economic,
financial, and business conditions, some of which are beyond our control. Cash generated from operating activities is
significantly impacted by the seasonality of our business. Historically, cash flows from operating activities have been highest in
the third and fourth fiscal quarters of the fiscal year due to revenue from the DTC segment and the collection of receivables from
wholesale revenue earlier in the year.
-68-
Cash flows from operating activities
Cash flows from operating activities were $151.6m for the year ended April 3, 2022 compared to $288.6m for the year ended
March 28, 2021. The decrease in cash from operating activities of $137.0m was largely driven by $127.7m of increased
inventory production as our manufacturing facilities exclusively produced PPE in the comparative period.
Cash flows used in operating activities was $21.6m for the fourth quarter ended April 3, 2022 compared to cash flows from
operating activities of $42.6m for the fourth quarter ended March 28, 2021. The decrease in cash from operating activities of
$64.2m was driven by $14.9m of lower receivables, $25.4m of increased inventory production, and $27.2m of accounts payable
and accrued liabilities driven by higher accrued expenses.
Cash flows used in investing activities
Cash flows used in investing activities were $37.2m for the year ended April 3, 2022 compared to $26.9m for the year ended
March 28, 2021. The increase in cash flows used in investing activities of $10.3m was primarily due to the investment program
behind our strategic initiatives, including higher costs incurred for retail store construction.
Cash flows used in investing activities were $13.8m for the fourth quarter ended April 3, 2022 compared to cash flows used in
investing activities of $8.8m for the fourth quarter ended March 28, 2021. The increase in cash flows used in investing activities
of $5.0m was due to the investment program behind our strategic initiatives as described above.
Cash flows (used in) from financing activities
Cash flows used in financing activities were $298.2m for the year ended April 3, 2022 compared to cash flows from financing
activities of $197.0m for the year ended March 28, 2021. The increase in cash flows from financing activities of $495.2m was
driven by higher borrowings on the Term Loan Facility in the comparative period and the payments for the purchase of
subordinate voting shares related to the Normal Course Issuer Bid (“NCIB”) as described below.
Cash flows used in financing activities were $80.5m for the fourth quarter ended April 3, 2022 compared to $17.3m for the fourth
quarter ended March 28, 2021. The increase in cash flows used in financing activities of $63.2m was largely driven by $65.9m of
payments for the purchase of subordinate voting shares related to the NCIB as described above.
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Free operating cash flow
(1)
The table below reconciles the cash flows from (used in) operating and investing activities, principal payments on lease liabilities
to free operating cash flow.
CAD $ millions
Total cash from
(used in):
Operating activities
Investing activities
Deduct the impact of:
Principal payments on lease
liabilities
Free operating cash flow
(1)
For the year ended
March 28,
(2)
2021
April 3,
2022
$ Change
Fourth quarter ended
March 28,
(2)
2021
April 3,
2022
$ Change
151.6
(37.2)
(46.9)
67.5
288.6
(26.9)
(38.8)
222.9
(137.0)
(10.3)
(8.1)
(155.4)
(21.6)
(13.8)
(14.1)
(49.5)
42.6
(8.8)
(11.0)
22.8
(64.2)
(5.0)
(3.1)
(72.3)
(1)
(2)
See “Non-IFRS Financial Measures and Other Specified Financial Measures” for a description of this measure.
The Company adopted a change in accounting policy on the treatment of implementation costs related to Software as a
Service (“SaaS”) arrangements. See “Changes in Accounting Policies” for a description of the impact from adopting the
agenda decision and the impact of retrospective application.
Free operating cash flow decreased to $67.5m for the year ended April 3, 2022 from $222.9m for the year ended March 28,
2021 due to lower cash flows from operating and investing activities as described above, and higher principal paid on lease
liabilities.
Free operating cash flow decreased to $(49.5)m for the fourth quarter ended April 3, 2022 from $22.8m for the fourth quarter
ended March 28, 2021 due to the factors described above.
Indebtedness
The following table presents our net debt
as of April 3, 2022 and March 28, 2021.
(1)
CAD $ millions
Cash
Mainland China Facilities
Revolving Facility
Term Loan Facility
Lease liabilities
Net debt
(1)
April 3,
2022
287.7
—
—
(370.8)
(250.7)
(333.8)
March 28,
2021
477.9
—
—
(377.3)
(254.8)
(154.2)
$ Change
(190.2)
—
—
6.5
4.1
(179.6)
(1)
See “Non-IFRS Financial Measures and Other Specified Financial Measures” for a description of this measure.
As at April 3, 2022, net debt was $333.8m compared to $154.2m as at March 28, 2021. The increase of $179.6m was driven by
a lower cash position of $190.2m partially offset by an increase in the borrowings of the Term Loan Facility by $6.5m due to the
Refinancing Amendment and an increase of $4.1m in lease liabilities. Net debt leverage as at April 3, 2022 was 1.2 times
adjusted EBITDA.
(1)
-70-
Revolving Facility
The Company has an agreement with a syndicate of lenders for a senior secured asset-based credit facility (“Revolving 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 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 April 3, 2022, the Company had repaid all principle amounts owing on the revolving facility (March 28, 2021 - $nil). As at
April 3, 2022, interest and administrative fees for $0.5m remain outstanding. Deferred financing charges in the amounts of
$0.9m (March 28, 2021 - $1.7m), were included in other long-term liabilities. As at and during the year ended April 3, 2022, the
Company was in compliance with all covenants.
The Company had unused borrowing capacity available under the Revolving Facility of $191.8m as at April 3, 2022 (March 28,
2021 - $181.2m).
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. As
the facility was not renewed, deferred financing costs of $0.4m were written off to the statement of income.
As at April 3, 2022, the Company had letters of credit outstanding under the Revolving Facility of $4.6m (March 28, 2021 -
$5.0m).
Term Loan Facility
The Company has a senior secured loan agreement (“Term Loan Facility”) 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 income. In connection with the Repricing Amendment, the Company incurred transaction costs of
$0.9m 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 terms from the existing Term Loan Facility: 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 Facility 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
-71-
Loan Facility. The Term Loan Facility contains financial and non-financial covenants which could impact the Company’s ability to
draw funds. As at and during the year ended April 3, 2022, the Company was in compliance with all covenants.
As the Term Loan Facility is denominated in U.S. dollars, the Company remeasures the outstanding balance in Canadian dollars
at each balance sheet date. As at April 3, 2022, we had $370.8m (US$296.3m) aggregate principal amount outstanding under
the Term Loan Facility (March 28, 2021 - $377.3m). The difference in amounts in these periods is the result of the change in the
CAD:USD exchange rate. As at March 28, 2021, prior to the Refinancing Amendment, the aggregate principal amount owing
was $377.3m.
Mainland China Facilities
A subsidiary of the Company in Mainland China has two uncommitted loan facilities in the aggregate amount of RMB 310.0m
("Mainland China Facilities"). The term of each draw on the loans 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 on each facility is equal to loan
prime rate of 1 year, plus 0.15% per annum, and payable at one, three or six months, depending on the term of each draw.
Proceeds drawn on the Mainland China Facilities are being used to support working capital requirements and build up of
inventory for peak season sales. As at April 3, 2022, the Company had no amounts owing on the Mainland China Facilities
(March 28, 2021 - $nil).
Short-term Borrowings
As at April 3, 2022, the Company has short-term borrowings in the amount of $3.8m. Short-term borrowings are the quarterly
principal repayments on the term loan of $3.8m (March 28, 2021 - $nil). Short-term borrowings are all due within the next 12
months.
Lease Liabilities
The Company had $250.7m (March 28, 2021 - $254.8m) of lease liabilities as at April 3, 2022, of which $58.5m (March 28, 2021
- $45.2m) are due within one year. Lease liabilities represent the discounted amount of future payments under leases for right-
of-use assets.
Normal Course Issuer Bid (“NCIB”)
The Company has initiated a NCIB in relation to its subordinate voting shares. The Company is authorized to make purchases
under the NCIB from August 20, 2021 to August 19, 2022, in accordance with the requirements of the Toronto Stock Exchange
(the “TSX”). The Board of Directors of the Company has authorized the Company to repurchase up to 5,943,239 subordinate
voting shares, representing approximately 10.0% of the issued and outstanding subordinate voting shares as at August 6, 2021.
Purchases will be made by means of open market transactions on both the TSX and the New York Stock Exchange (the
“NYSE”), or alternative trading systems, if eligible, or by such other means as a securities regulatory authority may permit.
Under the NCIB, the Company will be allowed to purchase daily, through the facilities of the TSX, a maximum of 256,010
subordinate voting shares, representing 25% of the average daily trading volume, as calculated per the TSX rules for the six-
month period starting on February 1, 2021 to July 31, 2021. Repurchased subordinate voting shares will be cancelled. A copy of
the Company's notice of intention to commence a normal course issuer bid through the facilities of the TSX may be obtained,
without charge, by contacting the Company. The Company believes that the purchase of its subordinate voting shares under the
NCIB is an appropriate and desirable use of available excess cash.
-72-
Further, the Board of Directors has authorized the Company to initiate an automatic share purchase plan ("ASPP") under which
a designated broker may purchase subordinate voting shares under the NCIB during the regularly scheduled quarterly trading
blackout period. The repurchases made under the ASPP will be made in accordance with certain purchasing parameters and
will continue until the earlier of the date in which the Company has acquired the maximum limit of subordinate voting shares
pursuant to the ASPP or upon the date of expiry of the NCIB.
For the year ended April 3, 2022, the Company purchased 5,636,763 subordinate voting shares for cancellation for total cash
consideration of $253.2m. The amount to purchase the subordinate voting shares has been charged to share capital, with the
remaining $241.3m charged to retained earnings.
For the fourth quarter ended April 3, 2022, the Company purchased 1,771,627 subordinate voting shares for cancellation for
total cash consideration of $65.9m. The amount to purchase the subordinate voting shares has been charged to share capital,
with the remaining $62.0m charged to retained earnings.
Capital Management
The Company manages its capital and capital structure, which 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. We 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.
(1)
(1)
See “Non-IFRS Financial Measures and Other Specified Financial Measures” for a description of these measures.
Contractual Obligations
The following table summarizes certain of our significant contractual obligations and other obligations as at April 3, 2022:
CAD $ millions
Accounts payable and accrued liabilities
Term Loan Facility
Interest commitments relating to borrowings
Foreign exchange forward contracts
Lease obligations
Pension obligation
(1)
Total contractual obligations
2023
176.2
3.8
17.2
0.9
65.8
—
263.9
2024
—
3.8
16.7
—
54.6
—
75.1
2025
—
3.8
16.7
—
50.5
—
71.0
2026
—
3.8
16.7
2.7
39.6
—
62.8
2027
—
3.8
16.7
—
33.3
—
53.8
Thereafter
—
351.8
8.4
—
79.9
2.2
442.3
Total
176.2
370.8
92.4
3.6
323.7
2.2
968.9
(1)
Interest commitments are calculated based on the loan balance and the interest rate payable on the term loan of 4.51% as at
April 3, 2022.
As at April 3, 2022, 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.
-73-
Off-Balance Sheet Arrangements
The Company uses off-balance sheet arrangements including letters of credit and guarantees in connection with certain
obligations, including leases. The Company in Europe also entered into 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. Refer to the “Credit risk” section of this MD&A for additional details on the Trade accounts receivable
factoring program. Other than those items disclosed here and elsewhere in this MD&A and our financial statements, we did not
have any material off-balance sheet arrangements or commitments as at April 3, 2022.
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 shall immediately reimburse the issuing bank for amounts drawn on issued letters of
guarantees. As at April 3, 2022, the Company had $5.4m outstanding in connection to the letters of guarantee.
In addition, during the fourth quarter ended April 3, 2022, a subsidiary of the Company in Mainland China entered into letters of
guarantee in the amount of $9.3m. Amounts will be used to support retail operations through letters of guarantee, standby letters
of credit, performance bonds, counter guarantees, counter standby letters of credit, or similar credits.
Outstanding Share Capital
Canada Goose is a publicly traded company and the subordinate voting shares are listed on the New York Stock Exchange
(NYSE: GOOS) and on the Toronto Stock Exchange (TSX: GOOS). As at May 13, 2022, there were 54,190,432 subordinate
voting shares issued and outstanding, and 51,004,076 multiple voting shares issued and outstanding.
As at May 13, 2022, there were 2,719,189 options and 215,248 restricted share units outstanding under the Company’s equity
incentive plans, of which 1,034,458 options were vested as of such date. Each option is exercisable for one subordinate voting
share. We expect that vested restricted share units will be paid at settlement through the issuance of one subordinate voting
share per restricted share unit.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are exposed to certain market risks arising from transactions in the normal course of our business. Such risk is principally
associated with credit risk, foreign exchange risk and interest rate risk.
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
-74-
revenue with a specific customer. The Company has an agreement with a third party who has insured the risk of loss for up to
90% of accounts receivable from certain designated customers subject to a total deductible of $0.1m, to a maximum of $30.0m
per year. As at April 3, 2022, accounts receivable totaling approximately $8.1m (March 28, 2021 - $5.7m) were insured subject
to the policy cap. 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.
Customer deposits are received in advance from certain customers for seasonal orders to further mitigate credit risk, and
applied to reduce accounts receivable when goods are shipped. As at April 3, 2022, customer deposits of $0.2m (March 28,
2021 - $1.6m) were included in accounts payable and accrued liabilities.
The aging of trade receivables was as follows:
CAD $ millions
Trade accounts receivable
Credit card receivables
Other receivables
April 3, 2022
Trade accounts receivable
Credit card receivables
Government grant receivable
Other receivables
March 28, 2021
Total
$
22.0
2.5
19.3
43.8
21.9
2.1
4.4
14.3
42.7
Current
$
14.4
2.5
9.5
26.4
9.0
2.1
4.4
14.3
29.8
< 30 days
$
2.8
—
—
2.8
31-60 days
$
2.1
—
—
2.1
5.4
—
—
—
5.4
1.4
—
—
—
1.4
Past due
> 61 days
$
2.7
—
9.8
12.5
6.1
—
—
—
6.1
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.
Accepted currencies include euros, British pounds sterling, and Swiss francs. The Company is charged a fee of the applicable
EURIBOR or LIBOR reference rate plus 1.15% per annum, based on the number of days between the purchase date and the
invoice due date, which is lower than the Company’s average borrowing rate under its revolving facility. The program is utilized
to provide sufficient liquidity to support its international operating cash needs. Upon transfer of the receivables, the Company
receives cash proceeds and continues to service the receivables on behalf of the third-party financial institution. The program
meets the derecognition requirements in accordance with IFRS 9, Financial Instruments as the Company transfers substantially
all the risks and rewards of ownership upon the sale of a receivable. These proceeds are classified as cash flows from operating
activities in the statement of cash flows.
For the year ended April 3, 2022, the Company received cash proceeds from the sale of trade accounts receivable with carrying
values of $26.6m which were derecognized from the Company’s statement of financial position (March 28, 2021 - $16.9m). Fees
of less than $0.1m were incurred during the year ended April 3, 2022 (March 28, 2021 - less than $0.1m) and included in net
interest, finance and other costs in the statement of income. As at April 3, 2022, the outstanding amount of trade accounts
receivable derecognized from the Company’s
-75-
statement of financial position, but which the Company continued to service, was $2.0m (March 28, 2021 - $nil).
Foreign exchange risk
Foreign exchange risk in operating cash flows
Our Annual Financial Statements are expressed in Canadian dollars, but a substantial portion of the Company’s revenues,
purchases, and expenses are denominated in foreign currencies, primarily U.S. dollars, euros, British pounds sterling, Swiss
francs, Chinese yuan, and Hong Kong dollars. Furthermore, as our business in Greater China grows, transactions in Chinese
yuan and Hong Kong dollar are expected to increase. Net monetary assets denominated in currencies other than Canadian
dollars that are held in entities with Canadian dollar functional currency are translated into Canadian dollars at the foreign
currency exchange rate in effect at the balance sheet date. 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. As a result, we are exposed to foreign currency translation gains and losses. Appreciating foreign currencies
relative to the Canadian dollar, to the extent they are not hedged, will positively impact operating income and net income by
increasing our revenue, while depreciating foreign currencies relative to the Canadian dollar will have the opposite impact.
We are also exposed to fluctuations in the prices of U.S. dollar denominated purchases as a result of changes in U.S. dollar
exchange rates. A depreciating Canadian dollar relative to the U.S. dollar will negatively impact operating income and net
income by increasing our costs of raw materials, while an appreciating Canadian dollar relative to the U.S. dollar will have the
opposite impact.
The Company has entered into forward foreign exchange contracts to reduce the foreign exchange risk to fluctuations in the
U.S. dollar, euro, British pound sterling, Swiss franc, Chinese yuan, Hong Kong dollar, and Swedish krona exchange rates for
revenues and purchases. 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. During the second quarter ended September 26, 2021, the Company initiated the operating hedge program for the fiscal
year ending April 2, 2023.
The Company recognized the following unrealized losses in the fair value of derivatives designated as cash flow hedges in other
comprehensive income:
CAD $ millions
Forward foreign
exchange contracts
designated as cash
flow hedges
April 3,
2022
Net loss Tax expense
$
$
For the year ended
March 28,
2021
Net loss Tax expense
$
$
April 3,
2022
Net loss Tax expense
$
$
Fourth quarter ended
March 28,
2021
Net loss Tax expense
$
$
(4.5)
(0.1)
(0.3)
(1.1)
(0.2)
(0.4)
(1.5)
(0.6)
-76-
The Company reclassified the following losses and gains from other comprehensive income on derivatives designated as cash
flow hedges to locations in the consolidated financial statements described below:
CAD $ millions
Loss (gain) from other comprehensive income
Forward foreign exchange contracts designated as
cash flow hedges
Revenue
SG&A expenses
Inventory
For the year ended
March 28,
2021
$
April 3,
2022
$
Fourth quarter ended
March 28,
2021
$
April 3,
2022
$
3.9
(0.4)
(0.9)
3.3
(0.2)
(0.9)
1.9
(0.2)
(0.1)
3.3
(2.1)
(0.7)
For the fourth quarter and year ended April 3, 2022, unrealized gains of $4.3m and $4.7m, respectively (fourth quarter and year
ended March 28, 2021 - unrealized gains of $1.5m and $6.4m, respectively) on forward exchange contracts that were not
treated as hedges were recognized in SG&A expenses in the statement of income.
Foreign currency contracts outstanding as at April 3, 2022 related to operating cash flows were:
(in millions)
Forward contract to purchase Canadian dollars
Forward contract to sell Canadian dollars
Forward contract to purchase euros
Forward contract to sell euros
Foreign exchange risk on borrowings
US$
€
US$
€
CNY
£
CHF
CHF
£
Aggregate Amounts
57.4
66.0
35.6
34.5
293.3
29.9
2.1
8.3
3.9
Currency
U.S. dollars
euros
U.S. dollars
euros
Chinese yuan
British pounds sterling
Swiss francs
Swiss francs
British pounds sterling
Amounts available for borrowing under part of our Revolving Facility are denominated in U.S. dollars. As at April 3, 2022, there
were no principal amounts owing under the Revolving Facility.
Amounts available for borrowing under the Term Loan Facility are denominated in U.S. dollars. Based on our outstanding
balances of $370.8m (US$296.3m) under the Term Loan Facility as at April 3, 2022, a $0.01 depreciation in the value of the
Canadian dollar compared to the U.S. dollar would have resulted in a decrease in our pre-tax income of $3.0m solely as a result
of that exchange rate fluctuation’s effect on the debt.
-77-
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 Facility denominated in U.S. dollars. 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 Facility.
The Company recognized the following unrealized gains and losses in the fair value of derivatives designed as hedging
instruments in other comprehensive income:
April 3,
2022
Net gain Tax expense
$
$
For the year ended
March 28,
2021
Tax (expense)
recovery
$
Net (loss)
gain
$
April 3,
2022
Fourth quarter ended
March 28,
2021
Net gain Tax expense
$
$
Net gain Tax expense
$
$
13.2
(4.5)
(0.9)
(0.5)
11.5
(3.9)
3.9
(1.3)
—
—
0.2
0.1
—
—
—
—
CAD $ millions
Swaps designated as
cash flow hedges
Euro-denominated
cross-currency swap
designated as a net
investment hedge
The Company reclassified the following losses from other comprehensive income on derivatives designated as hedging
instruments to SG&A expenses:
CAD $ millions
Loss from other comprehensive
income
Swaps designated as cash flow
hedges
April 3,
2022
$
0.9
For the year ended
March 28,
2021
April 3,
2022
Fourth quarter ended
March 28,
2021
$
5.6
$
0.2
$
0.3
For the fourth quarter and year ended April 3, 2022, unrealized losses of $4.9m and $4.6m, respectively (fourth quarter and year
ended March 28, 2021 - unrealized losses of $5.3m and $21.7m, respectively) 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 income.
Interest rate risk
We are exposed to interest rate risk related to the effect of interest rate changes on borrowings outstanding under the Revolving
Facility, the Term Loan Facility, and the Mainland China Facilities. Based on the weighted average amount of outstanding
borrowings on the Mainland China Facilities during the year ended April 3, 2022, a 1.00% increase in the average interest rate
on our borrowings would have increased interest expense by $0.1m (year ended March 28, 2021 - $0.1m). Correspondingly, a
1.00% increase in the average interest rate would have increased interest expense on the Term Loan Facility by $3.7m (year
ended March 28, 2021 - $2.6m).
-78-
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 was 4.45%. The interest rate swaps were designated at inception and accounted for as
cash flow hedges.
Interest rate risk on the Term Loan Facility is partially mitigated by cross-currency 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 our borrowings at that time.
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 year ended April 3, 2022, the Company
incurred expenses with related parties of $1.7m (March 28, 2021 - $1.2m, March 29, 2020 - $1.7m) from companies related to
certain shareholders. Net balances owing to related parties as at April 3, 2022 were $0.3m (March 28, 2021 - $0.3m).
A lease liability due to the previous controlling shareholder of the acquired Baffin Inc. business (the “Baffin Vendor”) for leased
premises was $3.8m as at April 3, 2022 (March 28, 2021 - $4.6m). During the year ended April 3, 2022, 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 $1.4m (March 28, 2021 - $1.2m, March 29, 2020 - $1.4m). No amounts were owing to Baffin entities as at
April 3, 2022 and March 28, 2021.
For a discussion of additional related party transactions see Item 7B. — “Major Shareholders and Related Party Transactions”
— “Related Party Transactions”.
Terms and conditions of transactions with related parties
Transactions with related parties are conducted on terms pursuant to an approved agreement, or are approved by the Board of
Directors of the Company.
Key management compensation
Key management consists of the Board of Directors, the Chairman and Chief Executive Officer and the executives who report
directly to the Chairman and Chief Executive Officer.
CAD $ millions
Short term employee benefits
Long term employee benefits
Share-based compensation
Compensation expense
April 3,
2022
12.5
0.1
11.5
24.1
March 28,
2021
13.2
0.1
8.6
21.9
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CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Our Annual Financial Statements have been prepared in accordance with IFRS as issued by the IASB. The preparation of our
financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities,
revenues and expenses. We base our estimates on historical experience and on various other assumptions that we believe are
reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions.
While our significant accounting policies are more fully described in the notes to our Annual Financial Statements, we believe
that the following accounting policies and estimates are critical to our business operations and understanding our financial
results.
The following are the accounting policies subject to judgments and key sources of estimation uncertainty that we believe could
have the most significant impact on the amounts recognized in the Annual Financial Statements.
Revenue recognition. Revenue comprises DTC, Wholesale, and Other segment revenues. Revenue is measured at the amount
of consideration to which the Company expects to be entitled in exchange for the sale of goods in the ordinary course of the
Company’s activities. Revenue is presented net of sales tax, estimated returns, sales allowances, and discounts. The Company
recognizes revenue when the Company has agreed terms with its customers, the contractual rights and payment terms have
been identified, the contract has commercial substance, it is probable that consideration will be collected by the Company, and
when control of the goods is transferred to the customer have been met.
It is the Company’s policy to sell merchandise through the DTC segment with a limited right to return, typically within 30 days.
Accumulated experience is used to estimate and provide for such returns.
Inventories. Inventories are carried at the lower of cost and net realizable value which requires us to use estimates related to
fluctuations in obsolescence, shrinkage, future retail prices, seasonality and costs necessary to sell the inventory.
We periodically review our inventories and make provisions as necessary to appropriately value obsolete or damaged raw
materials and finished goods. In addition, as part of inventory valuations, we accrue for inventory shrinkage for lost or stolen
items based on historical trends from actual physical inventory counts.
Leases. We exercise judgment when contracts are entered into that may give rise to a right-of-use asset that would be
accounted for as a lease. Judgment is required in determining the appropriate lease term on a lease by lease basis. We
consider all facts and circumstances that create an economic incentive to exercise a renewal option or to not exercise a
termination option at inception and over the term of the lease, including investments in major leaseholds, operating
performance, and changed circumstances. The periods covered by renewal or termination options are only included in the lease
term if we are reasonably certain to exercise that option. Changes in the economic environment or changes in the retail industry
may impact the assessment of the lease term.
We determine the present value of future lease payments by estimating the incremental borrowing rate specific to each leased
asset or portfolio of leased assets. We determine the incremental borrowing rate of each leased asset or portfolio of leased
assets by incorporating our creditworthiness, the security, term, and value of the underlying leased asset, and the economic
environment in which the leased asset operates. The incremental borrowing rates are subject to change mainly due to
macroeconomic changes in the environment.
-80-
Impairment of non-financial assets (goodwill, intangible assets, right-of- use assets and property, plant and equipment). We are
required to use judgment in determining the grouping of assets to identify their cash generating units (“CGU”) for the purposes of
testing fixed assets for impairment. Judgment is further required to determine appropriate groupings of CGUs for the level at
which goodwill and intangible assets are tested for impairment. For the purpose of goodwill impairment testing, CGUs are
grouped at the lowest level at which goodwill is monitored for internal management purposes. For the purpose of intangible
assets’ impairment testing, intangible assets are assessed at the CGU level. In addition, judgment is used to determine whether
a triggering event has occurred requiring an impairment test to be completed.
In determining the recoverable amount of a CGU or a group of CGUs, various estimates are employed. We determine value-in-
use by using estimates including projected future revenues, earnings, working capital, and capital investment consistent with
strategic plans presented to the board of directors of the Company. Discount rates are consistent with external industry
information reflecting the risk associated with the specific cash flows.
Income and other taxes. Current and deferred income taxes are recognized in the consolidated statements of income and
comprehensive income, except when it relates to a business combination, or items recognized in equity or in other
comprehensive income. Application of judgment is required regarding the classification of transactions and in assessing
probable outcomes of claimed deductions including expectations about future operating results, the timing and reversal of
temporary differences and possible audits of income tax and other tax filings by the tax authorities in the various jurisdictions in
which the Company operates.
Warranty. The critical assumptions and estimates used in determining the warranty provision at the balance sheet date are:
number of jackets expected to require repair or replacement; proportion to be repaired versus replaced; period in which the
warranty claim is expected to occur; cost of repair; cost of jacket replacement; and risk-free rate used to discount the provision
to present value. We review our inputs to this estimate on a quarterly basis to ensure the provision reflects the most current
information regarding our products.
CHANGES IN ACCOUNTING POLICIES
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.
-81-
Standards issued and adopted
Configuration or Customization Costs in a Cloud Computing Arrangement
In April 2021, the International Financial Reporting Interpretations Committee (“IFRIC”) finalized an agenda decision within the
scope of IAS 38, Intangible Assets which clarified the accounting of configuration and customization costs in cloud computing
arrangements often referred to as Software as a Service ("SaaS") arrangements. As a result of the decision, costs that do not
meet the capitalization criteria for intangible assets are required to be expensed as incurred.
The adoption of the agenda decision was recognized as a change in accounting policy in accordance with IAS 8, Accounting
Policies, Changes in Accounting Estimates and Errors. The Company amended the existing accounting policies related to
implementation costs on SaaS arrangements as at April 1, 2019. The Company assessed the impact of the interpretation and
identified $25.4m of costs recognized as intangible assets within ERP and computer software related to SaaS arrangements that
were no longer eligible for capitalization and amortization in accordance with the agenda decision. As a result, these costs were
written off as at April 1, 2019 as these costs would have been required to be expensed in the period incurred.
In accordance with IAS 8, retrospective application is required for accounting policy changes and comparative financial
information was restated in these consolidated financial statements. The following tables outline the impacts of the restatements
on the comparative periods:
Condensed Comprehensive Income Information
Increase (decrease)
March 28, 2021
March 29, 2020
As previously
reported
$
437.1
15.8
70.2
Adjustments
$
(0.1)
—
0.1
Restated
$
437.0
15.8
70.3
As previously
reported
$
401.2
12.0
151.7
Adjustments
$
5.0
(1.3)
(3.7)
Restated
$
406.2
10.7
148.0
(12.6)
0.3
(12.3)
9.4
(0.3)
9.1
SG&A expenses
Income tax expense
Net income
Cumulative translation
adjustment
Condensed Financial Position Information
Increase (decrease)
As previously
reported
$
Adjustments
$
Restated
$
As previously
reported
$
Adjustments
$
Restated
$
March 28, 2021
March 29, 2020
Deferred income taxes
(asset)
Intangible assets
Deferred income taxes
(liability)
Shareholders' equity
46.9
155.0
21.6
600.1
1.5
(30.2)
(6.2)
(22.5)
48.4
124.8
15.4
577.6
40.8
161.7
15.1
520.2
1.0
(30.6)
(6.7)
(22.9)
41.8
131.1
8.4
497.3
-82-
As previously
reported
$
Adjustments
$
Restated
$
April 1, 2019
Deferred income taxes
(asset)
Intangible assets
Deferred income taxes
(liability)
Shareholders' equity
12.2
155.6
16.7
399.1
1.0
(25.4)
(5.5)
(18.9)
13.2
130.2
11.2
380.2
Condensed Cash Flow Information
Increase (decrease)
March 28, 2021
March 29, 2020
As previously
reported
$
70.2
Adjustments
$
0.1
Restated
$
70.3
As previously
reported
$
151.7
Adjustments
$
(3.7)
Restated
$
148.0
84.6
15.8
102.5
(5.1)
(7.2)
—
2.0
5.1
77.4
15.8
104.5
—
63.1
12.0
(130.6)
(17.0)
(6.0)
(1.3)
—
11.0
57.1
10.7
(130.6)
(6.0)
Net income
Depreciation and
amortization
Income tax expense
Changes in non-cash
items
Investment in
intangible assets
Leases - COVID-19 Rent Concessions
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. 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 $0.4m and $0.6m were recognized in the statement of income in the fourth and four
quarters ended April 3, 2022, respectively.
Interest Rate Benchmark Reform
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 amendments introduce a practical
expedient for modifications required by the Interbank Offer Rate (“IBOR”) reform. The amendments relate to the modification of
financial instruments where the basis for determining the contractual cash flows changes as a result of the IBOR reform,
-83-
allowing for prospective application of the alternative rate. A similar practical expedient exists for lessee accounting under IFRS
16. It also relates to the application of hedge accounting, which is not discontinued solely because of the IBOR reform. Hedging
relationships, including formal designation and documentation, must be amended to reflect modifications to the hedged item,
however, the practical expedient allows the hedge relationship to continue, although additional ineffectiveness may be required.
The amendments were effective for annual reporting periods beginning on or after January 1, 2021. A broader market-wide
initiative is underway to transition the various IBOR based on rates in use to alternative reference rates. The Company’s term
loan facility at a net book value of $370.0m, will be impacted by the IBOR reform. As such, the reformed IFRS guidance has
been adopted, however, accounting under the adopted standard will take place once IBOR related arrangements are modified,
which constitutes as an accounting event. As no accounting events have occurred to date, the Company has determined there
is no financial reporting impact as of April 3, 2022. The Company is in discussions with its lenders and is currently determining if
any modifications will meet the requirements for the application of the practical expedient.
SUBSEQUENT EVENTS
Joint Venture
On April 4, 2022, the Company along with its long-standing distribution partner Sazaby League, Ltd. formed a joint venture,
Canada Goose Japan, to capture synergies in their business arrangement. The Company contributed $2.5m for 50% of the legal
entity comprising the joint venture, and controls the joint venture from the date of its inception. Sazaby contributed cash as well
as certain assets and liabilities in exchange for its 50% share.
The acquisition will be accounted for as a business combination, with the Company consolidating 100% of the results of the joint
venture from the date of the acquisition. Given the timing of the transaction and measurement uncertainty with final purchase
agreement consideration adjustments, the purchase price allocation is yet to be finalized and a preliminary purchase price
allocation will be disclosed in the Company’s first quarter 2023 condensed consolidated interim financial statements.
There were $0.7m in transaction related costs included in the SG&A expenses in the consolidated statement of income and
comprehensive income for the year ended April 3, 2022.
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INTERNAL CONTROL OVER FINANCIAL REPORTING
Disclosure Controls and Procedures
Management, including the CEO and CFO, has evaluated the effectiveness of our disclosure controls and procedures (as
defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act). Based on that evaluation, the CEO and CFO concluded
that such disclosure controls and procedures were effective as at April 3, 2022 to provide reasonable assurance that the
information required to be disclosed by the Company in reports it files is recorded, processed, summarized and reported, within
the appropriate time periods and is accumulated and communicated to management, as appropriate to allow timely decisions
regarding required disclosure.
Management’s Annual Report on Internal Control Over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control
over financial reporting is a process designed by, or under the supervision of, the CEO and the CFO and effected by the Board
of Directors, management and other personnel to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance with International Financial Reporting
Standards. The Company’s internal control over financial reporting includes policies and procedures that:
• Pertain to the maintenance of records that accurately and fairly reflect, in reasonable detail, the transactions and
dispositions of assets of the Company;
• Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements
in accordance with IFRS and that the receipts and expenditures of the Company are made only in accordance with
authorizations of management and directors; and
• Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of
the assets of the Company that could have a material effect on the consolidated financial statements.
Management of the Company, under the supervision and with the participation of the CEO and CFO, conducted an evaluation of
the effectiveness of the Company’s internal control over financial reporting as of April 3, 2022, using the criteria set forth by the
Committee of Sponsoring Organizations of the Treadway Commission in Internal Control - Integrated Framework (2013)
(“COSO 2013”). Based on evaluation performed, management concluded that, as of April 3, 2022, the Company’s internal
control over financial reporting was effective.
Deloitte LLP, our independent registered public accounting firm, has audited the effectiveness of our internal control over
financial reporting as of April 3, 2022.
Limitations of Controls and Procedures
There has been no change in the Company’s internal control over financial reporting during the year ended April 3, 2022 that
has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
Due to its inherent limitations, internal control over financial reporting may not prevent or detect all misstatements.
Management's projections of any evaluation of the effectiveness of internal control over financial reporting as to future periods
are subject to the risks that controls may become inadequate because of changes in conditions, or that the degree of
compliance with the policies or procedures may deteriorate.
-85-
ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
A. Directors and Senior Management
The following table sets forth certain information relating to our directors and executive officers as of May 5, 2022. Other than for
Pat Sherlock and Penny Brook, whose business address is 135 Baarerstrasse, 6300 Zug, Switzerland, and Paul Cadman,
whose business address is Shop No.6, UG/F, Sunrise House, 27 Old Bailey Street, Central, Hong Kong, the business address
for our directors and officers is c/o Canada Goose Holdings Inc., 250 Bowie Ave, Toronto, Ontario, Canada M6E 4Y2.
Name
Dani Reiss
Jonathan Sinclair
Pat Sherlock
Ana Mihaljevic
Penny Brook
Kara MacKillop
Paul Cadman
David Forrest
Carrie Baker
John Moran
Michael (Woody) Blackford
Paul Hubner
Joshua Bekenstein
Jodi Butts
Maureen Chiquet
Ryan Cotton
John Davison
Stephen Gunn
Jean-Marc Huët
Michael D. Armstrong
Belinda Wong
Age
48
60
48
41
45
46
64
42
46
59
53
61
63
49
59
43
63
67
53
49
51
Position
Chairman and Chief Executive Officer and Director
Executive Vice President and Chief Financial Officer
President, Canada Goose International AG & EMEA
President, North America and Executive Vice President, Sales Operations &
Planning
Chief Marketing and Experience Officer
Chief of Staff and Executive Vice President, People & Culture
President, Asia-Pacific
General Counsel
President
Chief Operating Officer
Chief Product Officer
President and Chief Executive Officer, Baffin Limited
Director
Director
Lead Director
Director
Director
Director
Director
Director
Director
Dani Reiss C.M., OOnt (Member of the Order of Canada and the Order of Ontario), Chairman and Chief Executive Officer and
Director
The grandson of our founder, Mr. Reiss joined the company in 1997 and worked in almost every area of the company and
successfully developed our international sales channels prior to assuming the role of President and Chief Executive Officer of
the company in 2001. In March 2022, he was named the Chairman and Chief Executive Officer of the company. Mr. Reiss
received a Bachelor of Arts from University of Toronto. Mr. Reiss is the Chairman of our board of directors and brings leadership
and operational experience to our board of directors as our Chairman and Chief Executive Officer.
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Jonathan Sinclair, Executive Vice President and Chief Financial Officer
Mr. Sinclair joined the company in June 2018 as Executive Vice President and Chief Financial Officer. Prior to joining the
company, Mr. Sinclair served as Chief Financial Officer and Executive Vice President of Business Operations at Jimmy Choo
PLC from June 2014 to May 2018, Chief Operating Officer at Vertu from June 2013 to June 2014, Chief Operating Officer at
Jimmy Choo from December 2008 to May 2013, and Group Finance Director at Pentland Brands Plc from November 2003 to
December 2008. He brings more than 20 years of global financial and operational experience to his role. Mr. Sinclair received a
Bachelor of Arts from Loughborough University of Technology.
Pat Sherlock, President, Canada Goose International AG & EMEA
Mr. Sherlock joined the company in November 2012 as the Director of Canadian Sales and was named Senior Director of Sales
in May 2014, Vice President of Sales Canada in May 2015, Senior Vice President of Global Wholesale in April 2016, President
of Canada Goose International AG in April 2018, overseeing all operations in Europe, the Middle East, Asia and South America
and in May, 2021, President, Canada Goose International AG & EMEA. Prior to joining the company, Mr. Sherlock served as the
National Sales Manager of New Balance Canada Inc., from January 2008 to November 2012 and Managing Director, Central
Eastern Canada for Lothar Heinrich Agencies Ltd. (Warsteiner) from December 2006 to January 2008. He spent 10 years at
InBev (Labatt), from 1997 to 2007 most recently as National Field Sales Manager. Mr. Sherlock received a Bachelor of Business
Administration and Management from University of Winnipeg.
Ana Mihaljevic, President, North America and Executive Vice President, Sales Operations & Planning
Ms. Mihaljevic joined the company in April 2015 as Vice President of Planning and became Vice President of Planning and
Sales Operations in April 2016, Senior Vice President of Planning and Sales Operations in April 2017, Chief Commercial Officer
in April 2019 and President, North America and Executive Vice President, Sales Operations & Planning in March 2022. Prior to
joining the company, Ms. Mihaljevic served as the Director of Business Planning at Marc Jacobs International, a designer
apparel company, from March 2013 to March 2015, the Director of Sales and Planning at Jones Apparel Group, a women’s
apparel company, from May 2011 to March 2013, and as an Account Executive at Ralph Lauren from April 2008 to May 2011.
Ms. Mihaljevic received a Bachelor in Commerce from Queen’s University.
Penny Brook, Chief Marketing and Experience Officer
Ms. Brook joined the company in 2014 as European Marketing Director. She initially served as General Manager and Vice
President of International Marketing for the company and was named Chief Marketing Officer in January 2018 and Chief
Marketing and Experience Officer in March 2022. Prior to joining the company, Ms. Brook served in progressively senior
marketing roles across a wide range of industries including luxury, fashion, consumer electronics and fast-moving consumer
goods, at companies such as Mulberry Group plc, Clarks and Philips Electronics. Ms. Brook received a Bachelor of Arts from
Kingston University in London.
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Kara MacKillop, Chief of Staff and Executive Vice President, People and Culture
Ms. MacKillop joined the company in September 2014 as the Vice President of Human Resources. She was promoted to Senior
Vice President of Human Resources in 2016, Executive Vice President, People and Culture in April 2018 and Chief of Staff and
Executive Vice President, People and Culture in June 2020. Prior to joining our team, Ms. MacKillop served as the Director of
Human Resources for Red Bull Canada, a company that produces and sells energy drinks, from September 2010 to September
2014, and as Director of Human Resources for Indigo Books and Music from August 2003 until September 2010. Ms. MacKillop
received a Bachelor of Science from the University of Western Ontario.
Paul Cadman, President, Asia-Pacific
Mr. Cadman joined the company in August 2021 as President, Asia-Pacific. Prior to joining our company, Mr. Cadman founded
PMC Global Hong Kong Ltd., a strategic management and business consultancy focused on the luxury goods industry.
Previously, Mr. Cadman served as the Regional Asia-Pacific Chief Executive Officer at Salvatore Ferragamo for 11 years where
he led the brand through its expansion in the Asia-Pacific region and key business achievements, and has also held leadership
roles at Bvlgari and Asprey & Garrard.
David Forrest, General Counsel
Mr. Forrest joined the company in May 2014 as Director, Legal and was named Senior Director, Legal in May 2015, Vice
President, Legal in October 2016, Senior Vice President, General Counsel in April 2017 and General Counsel in March 2022.
Prior to joining the company, Mr. Forrest served as the General Counsel and Corporate Secretary of Thomas Cook North
America from May 2012 to May 2014, prior to which he practiced law at Osler, Hoskin & Harcourt LLP, from August 2006 until
May 2012. Mr. Forrest received a Bachelor of Laws (with distinction) from Western University in 2006 and a Honours Bachelor of
Arts, Applied Economics from Queen’s University in 2002.
Carrie Baker, President
Ms. Baker joined the company in May 2012 as the Vice President of Communications and was named Chief of Staff and Senior
Vice President in January 2017, Executive Vice President, Chief of Staff in April 2018, President, North America in June 2020
and President in March 2022. Prior to joining the company Ms. Baker spent 12 years at High Road Communications, a North
American communications agency, from May 2000 to April 2012, serving most recently as Senior Vice President. Ms. Baker
received a Bachelor of Arts from the University of Western Ontario.
John Moran, Chief Operating Officer
Mr. Moran joined the company in November 2014 as Vice President of Manufacturing and was named Senior Vice President,
Manufacturing and Supply Chain in January 2017, Executive Vice President, Manufacturing and Supply Chain in April 2018 and
Chief Operating Officer in March 2022. Prior to joining the company, Mr. Moran served as Chief Operating Officer at Smith &
Vandiver Corp. in 2014 and as Vice President, Operations from October 2003 to March 2011 and later Chief Operating Officer
from April 2011 to April 2013 at Robert Talbott Inc. in Monterey, California, a renowned producer of men’s and women’s luxury
apparel. Throughout his time with Robert Talbott Inc., Mr. Moran’s responsibilities ranged from strategic planning and business
development to sales, sourcing, manufacturing, distribution and finance. Prior to his time with
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Robert Talbott Inc., Mr. Moran was employed full-time with Gitman Brothers Shirt Company, based in Ashland, Pennsylvania,
from 1984 to October 2003 holding positions of varying levels of responsibility in manufacturing, distribution and finance. At the
time of his departure in October 2003 he held the position of Chief Operating Officer.
Michael (Woody) Blackford, Chief Product Officer
Mr. Blackford joined the company in November 2019 as Executive Vice President, Design and Merchandising and was named
Executive Vice President, Product in March 2020 and Chief Product Officer in March 2022. Prior to joining the company, Mr.
Blackford spent 14 years at Columbia Sportswear Company, most recently serving as Vice President of Global Design &
Innovation. Prior to that, he held a number of roles in product and sales at Sierra Designs. Throughout his career, Mr. Blackford
has developed expertise in design leadership, product development and technical innovation. Mr. Blackford received a Bachelor
of Business Administration and Economics from St. Francis Xavier University.
Paul Hubner, President and Chief Executive Officer, Baffin Limited
Mr. Hubner is the founder of Baffin, an industry-leading designer and manufacturer of performance outdoor and industrial
footwear, and currently serves as President and Chief Executive Officer. With more than 30 years of footwear construction and
design expertise and senior management experience, he has led the expansion and growth of the brand since 1997. Prior to
founding Baffin, Mr. Hubner worked at Deloitte as a Certified Management Accountant. He graduated from McMaster University
with a Bachelor of Commerce Degree.
Joshua Bekenstein, Director
Mr. Bekenstein has served as a member of our board of directors since December 2013. He is a Managing Director of Bain
Capital. Prior to joining Bain Capital, in 1984, Mr. Bekenstein spent two years at Bain & Company, Inc., where he was involved
with companies in a variety of industries. Mr. Bekenstein serves as a director of BRP Inc., Dollarama Inc. and Bright Horizons
Family Solutions Inc. He previously served as a member of the board of directors of The Gymboree Corporation, Burlington
Stores, Inc., Waters Corporation and The Michaels Companies, Inc. Mr. Bekenstein received a Bachelor of Arts from Yale
University and a Master of Business Administration from Harvard Business School. Mr. Bekenstein provides strong executive
and business operations skills to our board of directors and valuable experience gained from previous and current board
service.
Jodi Butts, Director
Ms. Butts has served as a member of our board of directors since November 2017. She is currently a Senior Governance
Consultant with WATSON Advisors Inc. and serves as a board member of Tilray Inc., Dot Health Inc., and chairs the board of
directors of Pharmala Inc. and The Walrus Foundation. She also holds several board advisory roles, including with Bayshore
Home Healthcare and the Canadian Centre for the Purpose of the Corporation. She received a Bachelor of Laws from the
University of Toronto where she also received her Master of Arts in Canadian History.
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Maureen Chiquet, Lead Director
Ms. Chiquet has served as a member of our board of directors since August 2017 and was appointed the Lead Director in
February 2022. Ms. Chiquet began her career in marketing at L’Oreal Paris in 1985, started working at The Gap in 1988, where
she helped launch and build the Old Navy brand, and served as President of Banana Republic in 2002 prior to becoming Chief
Operating Officer and President of U.S. Operations of Chanel in 2003. In 2007, Ms. Chiquet became Chanel’s first Global Chief
Executive Officer. She left Chanel in 2016. Ms. Chiquet served as a Trustee to the New York Academy of Art. Ms. Chiquet also
served as a Trustee to the Yale Corporation and was a fellow of Yale University, where she received a Bachelor of Arts in
literature. She serves as a non-executive director of the board of MatchesFashion, the chairwoman of the board of Golden
Goose as well as on the board of directors of Credo. Ms. Chiquet provides strong executive, product, marketing and business
operations skills to the board of directors.
Ryan Cotton, Director
Mr. Cotton has served as a member of our board of directors since December 2013. He joined Bain Capital in 2003, and is
currently a Managing Director. Prior to joining Bain Capital, Mr. Cotton was a consultant at Bain & Company from 2001 to 2003.
Mr. Cotton serves as a director of Blue Nile, Maesa, Varsity Brands, Virgin Australia, Virgin Voyages, and City Year New York.
He previously served as a member of the board of directors of Advantage Solutions, Inc., Apple Leisure Group, International
Market Centers, Inc., Daymon Worldwide, TOMS Shoes, Sundial Brands and The Michaels Companies, Inc. Mr. Cotton received
a bachelor’s degree from Princeton University and a Master of Business Administration from the Stanford Graduate School of
Business. Mr. Cotton provides strong executive and business operations skills to our board of directors and valuable experience
gained from previous and current board service.
John Davison, Director
Mr. Davison has served as a member of our board of directors since May 2017. Mr. Davison is currently the President and Chief
Executive Officer of Four Seasons Holdings Inc. (“Four Seasons”), the luxury hotel and resort management company, where he
oversees all aspects of the company’s global portfolio of hotels, resorts and branded residences. Initially joining Four Seasons
as Senior Vice President, Project Financing in 2002, Mr. Davison later served as Executive Vice President and Chief Financial
Officer from 2005 to 2019. Prior to joining Four Seasons, Mr. Davison spent four years as a member of the Audit and Business
Investigations Practices at KPMG in Toronto, followed by 14 years at IMAX Corporation from 1987 to 2001, ultimately holding
the position of President, Chief Operating Officer and Chief Financial Officer. Currently he also serves on the boards of IMAX
China Holding, Inc., Four Seasons and FreshBooks. Mr. Davison has been a Chartered Professional Accountant since 1986,
and a Chartered Business Valuator since 1988. He received a Bachelor of Commerce from the University of Toronto. Mr.
Davison provides strong executive and business operations skills to our board of directors.
Stephen Gunn, Director
Mr. Gunn has served as a member of our board of directors since February 2017. He previously served as a Co-Chair of Sleep
Country Canada Inc. (“Sleep Country”). He co-founded Sleep Country in 1994 and served as its Chair and Chief Executive
Officer from 1997 to 2014. Prior to founding Sleep Country, Mr. Gunn was a management consultant with McKinsey & Company
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from 1981 to 1987 and then co-founded and was President of Kenrick Capital, a private equity firm. Mr. Gunn serves as the
Chair of the board of directors of Dollarama Inc. Mr. Gunn is also the Chair of the audit committee of Recipe Unlimited
Corporation (formerly Cara Operations Limited), and served as a director of Golf Town Canada Inc. from 2008 to 2019. He
received a Bachelor of Electrical Engineering from Queens University and a Master of Business Administration from the
University of Western Ontario. Mr. Gunn provides strong executive and business operations skills to our board of directors and
valuable experience gained from previous and current board service.
Jean-Marc Huët, Director
Mr. Huët has served as a member of our board of directors since February 2017. He serves as the Chairman of Heineken N.V.,
the Chairman of Vermaat, a catering business owned by Bridgepoint Capital, and as a board member of Picnic, a grocery
delivery company in Europe. Mr. Huët served as a member of the advisory board of Bridgepoint Capital from January 2019 to
December 2021, a director of Formula One from 2012 to January 2017, and an Executive Director and Chief Financial Officer of
Unilever N.V. from 2010 to 2015. Mr. Huët was also formerly Executive Vice President and Chief Financial Officer of Bristol-
Myers Squibb Company from 2008 to 2009 and Chief Financial Officer of Royal Numico N.V. from 2003 to 2007. Prior to that, he
worked at Goldman Sachs. He received a A.B. from Dartmouth College and an M.B.A. from INSEAD. Mr. Huët provides strong
executive, consumer and financial expertise to our board of directors and valuable experience gained from previous and current
board service.
Michael D. Armstrong, Director
Mr. Armstrong has served as a member of our board of directors since January 2021. He is a global media expert as well as a
business development and operations executive. He is currently Executive Vice President, Worldwide Television Licensing &
Operations at ViacomCBS, Global Distribution Group, and has spent most of his career developing and launching revenue
generating brands around the world. Mr. Armstrong previously served as General Manager of BET Networks, and was Executive
Vice President and General Manager, Revenue and Emerging Brands at Viacom International Media Networks. He is on the
board of the Greater Los Angeles Zoo Association and INSPIRATO, and is a member of the Board of Trustees at his alma mater
Hampton University. Mr. Armstrong previously chaired the boards of Dance Theatre of Harlem and the National Association for
Multi-Ethnicity in Communications (NAMIC). He is also a member of the International Academy of Television Arts & Sciences
and received an MBA at the University of Chicago Booth School of Business. Mr. Armstrong provides strong executive and
business operations skills to our board of directors.
Belinda Wong, Director
Ms. Wong has served as a member of our board of directors since March 2022. She is currently the Chairman of Starbucks
China, where she is responsible for delivering a holistic, long-term strategy for Starbucks China. She is also a member of the
Starbucks global executive leadership team, contributing more than 20 years of field knowledge and leadership in the Asia
Pacific region. She serves as an Independent Non-Executive Director for Hysan Development Company and Television
Broadcasts Limited. Ms. Wong also serves on the Faculty Advisory Board for her alma mater, the University of British
Columbia’s Sauder School of Business, where she received a Bachelor of Commerce degree with a major in finance. Ms. Wong
provides strong executive and business operation skills to our board of directors.
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B. Compensation
Board of Director Compensation
Only the company’s independent directors, Messrs. Armstrong, Davison, Gunn and Huët and Mmes. Chiquet, Butts and Wong
received compensation in respect of fiscal 2022 for their service on our board of directors. Messrs. Reiss, Bekenstein and
Cotton do not receive any compensation as directors of the company. Mr. Reiss’ compensation for serving as Chairman and
Chief Executive Officer is included with that of the other named executive officers. Canada Goose does not compensate
representatives of Bain Capital for their service on our board. The following table sets forth information concerning the
compensation paid by the company to Messrs. Davison, Armstrong, Gunn and Huët and Mmes. Chiquet, Butts and Wong in
respect of fiscal 2022:
Name
John Davison
Stephen Gunn
Jean-Marc Huët
Maureen Chiquet
Jodi Butts
Michael D. Armstrong
Belinda Wong
(5)
(4)
Fees Earned or Paid in
(1)
Cash ($)
Stock Awards ($)
(2)
Option Awards ($)
(3)
125,360
125,360
125,360
126,927
115,436
125,882
3,978
30,095
30,095
30,095
30,095
30,095
34,939
—
90,302
90,302
90,302
90,302
90,302
104,752
—
Total ($)
245,757
245,757
245,757
247,324
235,833
265,573
3,978
(1) Compensation paid in U.S. dollars converted at an exchange rate of US$1.00 to $1.25 which is an average rate
determined in accordance with the company's policies based on exchange rates available as at the applicable payment
dates for the fiscal year.
(2) Amount shown reflects the grant date fair value of restricted share unit (“RSU”) awards granted to Messrs. Davison, Gunn,
Huët and Armstrong and Mmes. Chiquet and Butts in fiscal 2022. The value was determined in accordance with IFRS 2
“Share-based Payment”.
(3) Amount shown reflects the grant date fair value of options to purchase subordinate voting shares granted to Messrs.
Davison, Gunn, Huët and Armstrong and Mmes. Chiquet and Butts in fiscal 2022. The value was determined in
accordance with IFRS 2 “Share-based Payment”.
(4) Mr. Armstrong joined our board of directors in January 2021, which was after our fiscal 2021 annual equity grant.
Accordingly, amounts shown reflect a prorated amount of RSU and option awards granted for his service in fiscal 2021,
as well as RSU and option awards granted for his service in fiscal 2022.
(5) Ms. Wong joined our board of directors in March 2022 and was paid a prorated fee of US$3,173 for her service on our
board of directors during fiscal 2022.
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As compensation for service on our board of directors, the Company pays each of its independent directors US$75,000 per year
(the “Board Retainer”). In addition, independent directors who serve as members of committees of our board of directors are
paid an additional US$12,500 per year for their committee service. In February 2022, the Vision Committee was dissolved and
Messrs. Armstrong and Huët and Ms. Chiquet were each paid a prorated fee of US$10,416.67 for their service on the Vision
Committee in fiscal 2022. Following the formation of the Environmental and Social Committee in February 2022, Mr. Huët and
Ms. Butts were each paid a prorated fee of US$2,083 for their service on such committee in fiscal 2022. Mr. Armstrong, who as
Chair of the Environmental and Social Committee is entitled to an annualized amount of US$15,000, was paid a prorated fee of
US$2,500 during fiscal 2022 for his service as Chair of the Environmental and Social Committee. Mr. Davison is paid
US$25,000 per year for his service as the Chair of the Audit Committee. Ms. Butts is paid US$15,000 per year for her service as
the Chair of the Nominating & Governance Committee. Ms. Chiquet, who as Lead Director of our board of directors is entitled to
an annualized amount of US$20,000, was paid a prorated fee of US$3,333 for her service as Lead Director during fiscal 2022.
On June 2, 2021, (i) each of Messrs. Davison, Gunn and Huët and Mmes. Butts and Chiquet was granted an award of 6,287
options to purchase our subordinate voting shares (“Options”) under the Omnibus Plan and (ii) Mr. Armstrong was granted an
award of 7,293 Options under the Omnibus Plan. The Options are subject to time-based vesting of one-fourth on each of the
first, second, third and fourth anniversaries of the grant date. The Options have an exercise price of $48.93 per share and expire
on June 2, 2031.
On June 2, 2021, (i) each of Messrs. Davison, Gunn and Huët and Mmes. Butts and Chiquet was granted an award of 615
RSUs under the Omnibus Plan and (ii) Mr. Armstrong was granted an award of 714 RSUs under the Omnibus Plan. The RSUs
are subject to time-based vesting of one-third on each of the first, second and third anniversaries of the grant date.
Executive Compensation
Components of Executive Compensation
Each year, the compensation committee of our board of directors is responsible for determining our executive compensation
framework, which consisted of the following elements for fiscal 2022: (i) base salary; (ii) annual bonus; (iii) equity-based long-
term incentives; and (iv) employee benefits and other compensation.
Named Executive Officers
The following tables and discussion relate to the compensation paid to or earned by our Chairman and Chief Executive Officer,
Dani Reiss; our Executive Vice President and Chief Financial Officer, Jonathan Sinclair; and our three most highly compensated
executive officers (other than Messrs. Reiss and Sinclair) who were serving as executive officers on the last day of fiscal 2022.
They are Michael (Woody) Blackford, our Chief Product Officer; Pat Sherlock, our President, Canada Goose International AG &
EMEA; and Penny Brook, our Chief Marketing and Experience Officer. Messrs. Reiss, Sinclair, Blackford and Sherlock and Ms.
Brook are referred to collectively in this Annual Report as our named executive officers.
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The following table sets forth information about certain compensation awarded to, earned by, or paid to our named executive
officers in respect of fiscal 2022:
(6)
Name and principal position
Dani Reiss, Chairman and Chief
Executive Officer
Jonathan Sinclair, Executive Vice
President and Chief Financial
Officer
Michael (Woody) Blackford, Chief
Product Officer
Pat Sherlock, President, Canada
Goose International AG & EMEA
Penny Brook, Chief Marketing and
Experience Officer
(7)
(7)
Salary ($)
(1)
1,253,654
Bonus ($)
(2)
2,243,520
Stock awards
(3)
($)
Option awards
(4)
($)
compensation ($)
All other
(5)
3,133,017
3,690,009
783,097
373,589
375,522
584,257
Total compensation
($)
10,406,197
2,206,960
85,997
90,495
662,500
288,080
264,098
390,007
11,691
1,616,376
437,485
95,899
174,695
258,008
233,801
1,199,888
454,582
239,499
181,742
268,393
95,875
1,240,091
(1)
(2)
(3)
(4)
(5)
(6)
(7)
Amounts shown are inclusive of salary for the 53rd week of fiscal 2022. Fiscal 2022 is the first 53-week fiscal year,
ending on April 3, 2022.
Amounts shown reflect the bonuses earned by our named executive officers, in respect of fiscal 2022.
Amounts shown reflect the grant date fair value of RSU awards granted to Messrs. Reiss, Sinclair, Blackford and
Sherlock and Ms. Brook in fiscal 2022. The value was determined in accordance with IFRS 2 “Share-based Payment”.
Amounts shown reflect the grant date fair value of Options granted to Messrs. Reiss, Sinclair, Blackford and Sherlock
and Ms. Brook in fiscal 2022. The values were determined in accordance with IFRS 2 “Share-based Payment”.
For more detail on the amounts included in this column, see “All Other Compensation - Benefits and Perquisites” below.
Salary paid in fiscal 2022 was partially paid in pounds sterling, which is converted at an exchange rate of GBP1.00 to
$1.70 which is an average rate determined in accordance with the company’s policies based on exchange rates
available as at the applicable payment dates for the fiscal year. Bonus was calculated on salary partially paid in
Canadian dollars and in pounds sterling and will be paid in pounds sterling converted at an exchange rate of GBP1.00 to
$1.60, which is the closing rate as of April 3, 2022 determined in accordance with the company’s policies.
Salary paid in Swiss francs converted at an exchange rate of CHF1.00 to $1.36 which is an average rate determined in
accordance with the company's policies based on exchange rates available as at the applicable payment dates for the
fiscal year. Certain amounts under “All other compensation” paid in Swiss francs converted at the same exchange rate of
CHF1.00 to $1.36. Bonus to be paid in Swiss francs converted at an exchange rate of CHF1.00 to $1.35, which is the
closing rate as of April 3, 2022 determined in accordance with the company’s policies.
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Base Salary
Base salaries provide our named executive officers with a fixed amount of compensation each year. Base salary levels are
established based on a range of factors, including peer company compensation, the executive’s role, responsibilities and prior
experience and the overall market demand for the executive. Mr. Reiss’ annual base salary is $1,230,000, Mr. Sinclair’s annual
base salary is GBP450,000, Mr. Blackford’s annual base salary is $650,000, Ms. Brook’s annual base salary is CHF333,125 and
Mr. Sherlock’s annual base salary is CHF320,232.
Bonus
Each named executive officer is eligible to receive an annual bonus pursuant to his or her employment agreement and in
accordance with the bonus plan of the company. Fiscal 2022 bonuses earned by Messrs. Reiss, Sinclair, Blackford and Sherlock
and Ms. Brook are reflected in the compensation table above.
For fiscal 2022, Mr. Reiss was eligible to earn a target annual bonus equal to 150% of his base salary (“Reiss Bonus Target”),
based on achievement of the fiscal 2022 global EBIT target (the “Global EBIT Target”). The payout of Mr. Reiss’s bonus is
eligible to be earned at 100% of the Reiss Bonus Target upon achievement of 100% of Global EBIT Target. Achievement of
EBIT above 100% of Global EBIT Target results in Mr. Reiss’s bonus being earned at 100% of Reiss Bonus Target plus 8% of
the Reiss Bonus Target for each 1% over the Global EBIT Target. Our board of directors determined that Mr. Reiss earned a
fiscal 2022 bonus of 122% of the Reiss Bonus Target based on achievement above the Global EBIT Target in fiscal 2022. The
bonus will be paid entirely in cash.
Messrs. Sinclair, Blackford and Sherlock and Ms. Brook were eligible to earn annual bonuses for fiscal 2022 targeted at 45%
(Mr. Sinclair) or 40% (Messrs. Sherlock and Blackford and Ms. Brook), of base salary. For Messrs. Sinclair and Blackford and
Ms. Brook, target EBIT for purposes of our fiscal 2022 annual bonus plan was determined the same as for Mr. Reiss (being the
Global EBIT Target). For Mr. Sherlock, target EBIT for purposes of our fiscal 2022 annual bonus plan was determined half on
achievement of a regional EBIT target and half on achievement of the Global EBIT Target. Achievement above the applicable
target EBIT and outstanding performance can result in bonus being earned above 100% of target annual bonus. Messrs.
Sinclair and Blackford were determined to earn fiscal 2022 bonuses each equal to 111% of their respective target annual
bonuses based on achievement above the Global EBIT Target. Mr. Sherlock was determined to earn a fiscal 2022 bonus equal
to 55% of his target annual bonus based on full achievement of the Global EBIT Target only. Ms. Brook was eligible to earn a
fiscal 2022 bonus equal to 133% of her target annual bonus based on achievement above the Global EBIT Target and
performance. The bonuses will be paid entirely in cash.
Executive Employment Agreements
We have entered into an employment agreement with each of our named executive officers. The terms of the agreements are
as follows.
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Compensation and Bonus Opportunities
Under his amended and restated employment agreement, effective March 9, 2017, Mr. Reiss is entitled to an annual base salary
of $1,000,000, subject to annual review and increase by our board of directors. Mr. Reiss is also eligible for an annual incentive
bonus, which under his employment agreement is targeted at 75% of his annual base salary, and which has subsequently
increased to 150% of his annual base salary. The employment agreement also provides for an annual equity grant to Mr. Reiss
under our long-term equity incentive plan.
Under his employment agreement, effective August 13, 2021, Mr. Sinclair is entitled to an annual base salary of GBP450,000,
subject to annual review. Mr. Sinclair is also eligible for an annual incentive bonus targeted at 45% of his annual base salary. Mr.
Sinclair’s employment agreement also provides for an annual equity grant to Mr. Sinclair under our long-term equity incentive
plan, equal to 100% of his annual base salary. The employment agreement further provides for certain benefits and perquisites,
as described below under “All Other Compensation - Benefits and Perquisites”.
Under his employment agreement, dated as of May 14, 2019, Mr. Blackford is entitled to an annual base salary of $650,000,
subject to annual review. Mr. Blackford is also eligible for an annual incentive bonus targeted at 40% of his annual base salary.
The employment agreement also provided for a signing bonus in the form of a (i) gross cash amount of $325,000 to be paid to
Mr. Blackford on his start date and (ii) a grant of stock options with a 10 year term, valued at $162,500 and vesting in four equal
annual installments and a grant of restricted stock units valued at $162,500 and vesting over three equal annual installments.
Mr. Blackford’s employment agreement also provides for an annual equity grant to Mr. Blackford under our long-term equity
incentive plan, equal to 80% of his annual base salary. The employment agreement further provides for certain benefits and
perquisites, as described below under “All Other Compensation - Benefits and Perquisites”.
Under his employment agreement, effective on or around August 1, 2018, Mr. Sherlock is entitled to an annual base salary of
CHF312,421, subject to annual review. Mr. Sherlock is also eligible to participate in our annual bonus plan, with an annual
incentive bonus targeted at 40% of his annual base salary. In connection with Mr. Sherlock’s assignment in Switzerland, Mr.
Sherlock’s employment agreement further provides for certain benefits and perquisites, as described below under “All Other
Compensation - Benefits and Perquisites”.
Under her employment agreement, effective January 3, 2018, Ms. Brook is entitled to an annual base salary of CHF325,000,
subject to annual review. Ms. Brook is also eligible to participate in our annual bonus plan, with an annual incentive bonus
targeted at 40% of her annual base salary. In connection with Ms. Brook’s assignment in Switzerland, Ms. Brook’s employment
agreement further provides for certain benefits and perquisites, as described below under “All Other Compensation - Benefits
and Perquisites”.
Severance
If Mr. Reiss’s employment were terminated by us without cause or he resigned for good reason, he would be entitled to (i) a
severance amount representing two times his annual base salary plus two times the average amount of the annual bonus
earned by Mr. Reiss in the two complete fiscal years preceding the date of his termination of employment, (ii) a pro rata bonus
amount for the year in which the termination occurs, based on the actual bonus amount paid in the prior year and (iii) continued
participation in our benefit plans for a period of 24 months following the date of termination of employment.
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If Mr. Sinclair’s employment were terminated by us without cause, he would be entitled to twelve months’ notice, or pay in lieu of
notice and benefit continuation for twelve months following such termination of employment.
If Mr. Blackford’s employment were terminated by us without cause, he would be entitled to eight months’ notice, or pay in lieu of
notice and benefit continuation for eight months following such termination of employment.
If Mr. Sherlock’s employment were terminated by us without cause, he would be entitled to six months’ notice.
If Ms. Brook’s employment were terminated by us without cause, she would be entitled to six months’ notice.
Equity-Based Compensation
On June 2, 2021, Messrs. Reiss, Sinclair, Sherlock and Blackford and Ms. Brook were granted 256,905, 40,677, 17,963, 27,153
and 18,686 Options, respectively. One-fourth of each Option award will vest on each of June 2, 2022, June 2, 2023, June 2,
2024 and June 2, 2025, subject to the executive’s continued employment with us through the applicable vesting date.
On June 2, 2021, Messrs. Reiss, Sinclair, Sherlock and Blackford and Ms. Brook were granted 64,025, 7,674, 3,570, 5,397 and
3,714 RSUs, respectively. One-third of these RSUs vest on each of June 2, 2022, June 2, 2023 and June 2, 2024, subject to the
executive’s continued employment with us through the applicable vesting date.
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The following table sets forth information regarding equity awards held by our named executive officers as of April 3, 2022:
ame
ani Reiss
(1)(2)
nathan
nclair
(3)(4)
at Sherlock
(5)(6)
chael (Woody)
ackford
(7)(8)
enny Brook
(9)(10)
Number of
securities
underlying
unexercised
options (#)
exercisable
54,222
143,489
—
62,500
—
—
—
26,547
23,981
3,134
—
—
—
13,317
6,958
—
—
—
2,857
5,847
—
—
—
—
22,221
13,853
7,238
—
—
—
Number of
securities
underlying
unexercised
options (#)
unexercisable
18,075
47,830
262,566
187,500
256,905
—
—
8,849
7,994
53,030
40,677
—
—
4,439
20,875
17,963
—
—
5,716
29,541
27,153
—
—
—
—
4,618
21,716
18,686
—
—
Equity incentive
plan awards:
Number of
securities
underlying
unexercised
options
unearned (#)
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Option
exercise
price ($)
83.53
63.03
33.97
50.00
48.93
—
—
83.53
63.03
33.97
48.93
—
—
63.03
33.97
48.93
—
—
46.38
33.97
48.93
—
—
—
4.62
63.03
33.97
48.93
0
—
Option
expiration
date
6/26/2028
4/3/2029
6/12/2030
6/12/2030
6/2/2031
—
—
6/26/2028
4/3/2029
6/12/2030
6/2/2031
—
—
4/3/2029
6/12/2030
6/2/2031
—
—
11/22/2029
6/12/2030
6/2/2031
—
—
—
4/1/2026
4/3/2029
6/12/2030
6/2/2031
0
—
Number of
shares of
stock that
have not
vested (#)
—
—
—
—
—
21,120
64,025
—
—
—
—
3,822
7,674
—
—
—
1,803
3,570
—
—
—
1,168
2,552
5,397
—
—
—
—
1,876
3,714
Market value
of shares of
stock that
have not
vested ($)
—
—
—
—
—
691,469
2,096,179
—
—
—
—
125,132
251,247
—
—
—
59,030
116,882
—
—
—
38,240
83,552
176,698
—
—
—
—
61,420
121,596
(1)
Mr. Reiss was granted 105,263 Options on June 1, 2017, 72,297 Options on June 26, 2018, 191,319 Options on April 3,
2019, 600,088 options on June 12, 2020 and 256,905 Options on June 2, 2021. His Options are subject to time-based
vesting of one-fourth on each of the first, second, third and fourth anniversaries of the respective grant dates.
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(2)
(3)
(4)
(5)
Mr. Reiss was granted 31,680 RSUs on June 12, 2020 and 64,025 RSUs on June 2, 2021. His RSUs are subject to time-
based vesting of one-third on each of the first, second and third anniversaries of the grant date. The market value of Mr.
Reiss’ RSUs was calculated by multiplying the number of RSUs subject to his award by $32.74 which was the closing
price of our subordinate voting shares on the TSX on April 1, 2022, the last trading day of fiscal 2022.
Mr. Sinclair was granted 35,396 Options on June 26, 2018, 31,975 Options on April 3, 2019, 70,706 Options on June 12,
2020 and 40,677 Options on June 2, 2021. His Options are subject to time-based vesting of one-fourth on each of the
first, second, third and fourth anniversaries of the grant date.
Mr. Sinclair was granted 10,650 RSUs on July 5, 2018, 5,733 RSUs on June 12, 2020 and 7,674 RSUs on June 2, 2021.
His RSUs are subject to time-based vesting of one-third on each of the first, second and third anniversaries of the grant
date. The market value of Mr. Sinclair’s RSUs was calculated by multiplying the number of RSUs subject to his award by
$32.74 which was the closing price of our subordinate voting shares on the TSX on April 1, 2022, the last trading day of
fiscal 2022.
Mr. Sherlock was granted 84,355 options to purchase Class B Common Shares and 126,533 options to purchase Class
A Junior Preferred Shares on April 17, 2014, which options were exchanged for 114,125 Options in connection with the
Recapitalization. Mr. Sherlock was also granted 84,355 options to purchase Class B Common Shares and 126,533
options to purchase Class A Junior Preferred Shares on April 1, 2015, which options were exchanged for 111,110
Options in connection with the Recapitalization. One third of these Options are subject to time-based vesting of 40% on
the second anniversary of the grant date and 20% on each anniversary of the grant date thereafter (the “Sherlock Time-
Based Options”). The remaining two-thirds of his Options are subject to both time-based and performance-based vesting
with the performance metrics reflecting a multiple of Bain Capital’s return on its investment in us (the “Sherlock
Performance-Based Options”). The Sherlock Performance-Based Options are subject to the same time-based vesting
schedule as the Sherlock Time-Based Options and, as of April 3, 2022, the performance metrics applicable to the
Sherlock Performance-Based Options had been achieved. The Sherlock Time-Based Options and the time-vesting
component of the Sherlock Performance-Based Options, to the extent then unvested, will accelerate in full upon a
change of control.
Mr. Sherlock was also granted 17,756 Options on April 3, 2019, 27,833 Options on June 12, 2020 and 17,963 Options on
June 2, 2021.These Options are subject to time-based vesting of one-fourth on each of the first, second, third and fourth
anniversaries of the grant date.
(6)
Mr. Sherlock was granted 2,704 RSUs on June 12, 2020 and 3,570 RSUs on June 2, 2021. His RSUs are subject to
time-based vesting of one-third on each of the first, second and third anniversaries of the grant date. The market value of
Mr. Sherlock's RSUs was calculated by multiplying the number of RSUs subject to his award by $32.74 which was the
closing price of our subordinate voting shares on the TSX on April 1, 2022, the last trading day of fiscal 2022.
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(7)
(8)
(9)
Mr. Blackford was granted 11,430 Options on November 22, 2019, 39,388 Options on June 12, 2020 and 27,153 Options
on June 2, 2021. These Options are subject to time-based vesting of one-fourth on each of the first, second, third and
fourth anniversaries of the grant date.
Mr. Blackford was granted 3,503 RSUs on November 22, 2019, 3,827 RSUs on June 12, 2020 and 5,397 RSUs on June
2, 2021. His RSUs are subject to time-based vesting of one-third on each of the first, second and third anniversaries of
the grant date. The market value of Mr. Blackford’s RSUs was calculated by multiplying the number of RSUs subject to
his award by $32.74 which was the closing price of our subordinate voting shares on the TSX on April 1, 2022, the last
trading day of fiscal 2022.
Ms. Brook was granted 84,355 options to purchase Class B Common Shares and 126,533 options to purchase Class A
Junior Preferred Shares on April 1, 2016, which options were exchanged for 111,110 Options in connection with the
Recapitalization. One third of these Options are subject to time-based vesting of 40% on the second anniversary of the
grant date and 20% on each anniversary of the grant date thereafter (the “Brook Time-Based Options”). The remaining
two-thirds of her Options are subject to both time-based and performance-based vesting with the performance metrics
reflecting a multiple of Bain Capital’s return on its investment in us (the “Brook Performance-Based Options”). The Brook
Performance-Based Options are subject to the same time-based vesting schedule as the Brook Time-Based Options
and, as of April 3, 2022, the performance metrics applicable to the Brook Performance-Based Options had been
achieved. The Brook Time-Based Options and the time-vesting component of the Brook Performance-Based Options, to
the extent then unvested, will accelerate in full upon a change of control.
Ms. Brook was also granted 18,471 Options on April 3, 2019, 28,954 Options on June 12, 2020 and 18,686 Options on
June 2, 2021. These Options are subject to time-based vesting of one-fourth on each of the first, second, third and fourth
anniversaries of the grant date.
(10) Ms. Brook was granted 2,813 RSUs on June 12, 2020 and 3,714 RSUs on June 2, 2021. Her RSUs are subject to time-
based vesting of one-third on each of the first, second and third anniversaries of the grant date. The market value of Ms.
Brook's RSUs was calculated by multiplying the number of RSUs subject to her award by $32.74 which was the closing
price of our subordinate voting shares on the TSX on April 1, 2022, the last trading day of fiscal 2022.
All Other Compensation - Benefits and Perquisites
Our full-time employees, including our named executive officers, are eligible to participate in our health and welfare benefit
plans, which include medical, dental, vision, basic and dependent life, supplemental life, accidental death, dismemberment and
specific loss, long-term disability, and optional critical illness insurance. Employees are also eligible to receive continuing
education support and to participate in our employee purchase program, which allows employees to purchase a specified
number of jackets and accessories at 50% of the manufacturer’s suggested retail price. Our named executive officers participate
in these plans on a slightly better basis than other salaried employees, including in some instances with slightly lower
deductibles, better cost-sharing rates and the ability to purchase supplemental health coverage. Our named executive officers
are also entitled to complimentary jackets each calendar year.
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Our named executive officers received additional benefits and perquisites pursuant to the terms of their employment with us
including, for Messrs. Sinclair, Blackford, and Sherlock and Ms. Brook with respect to benefits and perquisites related to their
overseas assignments. In fiscal 2022, (1) each of our named executive officers other than Ms. Brook received company-paid
personal insurance premiums, and Messrs. Reiss, Sinclair and Blackford also received supplemental health coverage; (2) each
of our named executive officers received complimentary jackets and/or products; (3) Messrs. Sinclair and Sherlock received
housing allowances and tax gross-ups related to such allowances; (4) Mr. Sherlock and Ms. Brook received reimbursement of
school fees for their children and tax gross-ups related to such reimbursements; (5) Messrs. Reiss and Sherlock received board
retainer fees for their service as directors of Canada Goose International AG, and (6) Ms. Brook received contributions to the
defined benefit pension plan membership in Switzerland.
Retirement Plans
In fiscal 2022, none of our named executive officers participated in the Group Retirement Savings Plan for the Employees of
Canada Goose Inc. (referred to as the RSP), a broad-based registered defined contribution plan offered to all of our full-time
Canada-based employees. In fiscal 2022, we did not make any contributions to the Deferred Profit Sharing Plan for the
Employees of Canada Goose Inc. on behalf of our named executive officers. Except for Ms. Brook, for whom we made
contributions in the defined benefit pension plan membership of Canada Goose International AG in Switzerland, we did not
otherwise set aside or accrue any amounts for pension, retirement or similar benefits for our named executive officers pursuant
to retirement plans sponsored by the company. We do not sponsor or maintain any qualified or non-qualified defined benefit
plans or supplemental executive retirement plans.
C. Board Practices
Composition of our Board of Directors
3
2
Under our articles, our board of directors consists of a number of directors as determined from time to time by the directors. Our
board of directors is comprised of ten directors. Our articles provide that a director may be removed with or without cause by a
resolution passed by a special majority comprised of 66 ⁄ % of the votes cast by shareholders present in person or by proxy at a
meeting and who are entitled to vote. The directors are elected by the shareholders at each annual general meeting of
shareholders, and all directors hold office for a term expiring at the close of the next annual shareholders meeting or until their
respective successors are elected or appointed. Our board of directors is led by Dani Reiss, as Chairman, and Maureen
Chiquet, as Lead Director. Mr. Reiss is not considered to be an independent director as he is also our Chief Executive Officer.
The Chairman and Chief Executive Officer responsibility is, among other things, to effectively manage, in collaboration with the
Lead Director, the affairs of the board of directors in accordance with corporate governance guidelines. The Chairman and Chief
Executive Officer is also responsible for the general direction and management of the business and affairs of the company
within the authority limitations delegated by the board of directors, focused on meeting the corporate goals and objectives
approved by the board of directors. The fundamental responsibility of the Lead Director of the board of directors, considering
that the Chairman is not an independent director, is to provide independent leadership for the board of directors in discharging
its duties and responsibilities independent of management. Under the BCBCA and our articles, between annual general
meetings of our shareholders, the directors may appoint one or more additional directors, but the number of
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additional directors may not at any time exceed one-third of the number of current directors who were elected or appointed other
than as additional directors.
Director Term Limits and Other Mechanisms of Board Renewal
Our board of directors has not adopted director term limits, a retirement policy for its directors or other automatic mechanisms of
board renewal. Rather than adopting formal term limits, mandatory age-related retirement policies and other mechanisms of
board renewal, the nominating and governance committee of our board of directors develop appropriate qualifications and
criteria for our board of directors as a whole and for individual directors. In accordance with its mandate, the nominating and
governance committee oversees a process for the assessment of our board of directors, each committee and individual director
regarding his, her or its effectiveness and contribution, and also reports evaluation results to our board of directors at least
annually. It is further the responsibility of the nominating and governance committee to develop a succession plan for the board
of directors, including maintaining a list of qualified candidates for director positions. The company is not in the practice of
providing any severance benefits to directors upon termination of service.
Board Committees
Each of our board committees operates under its own written charter adopted by our board of directors.
Audit Committee
Our audit committee is composed of Mr. Davison, Mr. Gunn and Mr. Huët, with Mr. Davison serving as chairperson of the
committee. Our board of directors has determined that Mr. Gunn, Mr. Davison and Mr. Huët meet the independence
requirements under the rules of the NYSE, the BCBCA and under Rule 10A-3 of the Exchange Act. Our board of directors has
determined that Mr. Davison is an “audit committee financial expert” within the meaning of the SEC’s regulations and applicable
Listing Rules of the NYSE.
Our audit committee reviews and approves the scope of the annual audits of our financial statements, reviews our internal
control over financial reporting, recommends to the board of directors the appointment of our independent auditors, reviews and
approves any non-audit services performed by the independent auditors, reviews the findings and recommendations of the
internal and independent auditors and periodically reviews major accounting policies.
Compensation Committee
Our compensation committee is composed of Mr. Cotton, Mr. Armstrong and Ms. Chiquet, with Mr. Cotton serving as
chairperson of the committee. Its primary purpose, with respect to compensation, is to assist our board of directors in fulfilling its
oversight responsibilities and to make recommendations to our board of directors with respect to the compensation of our
directors and executive officers.
Nominating and Governance Committee
Our nominating and governance committee is composed of Mr. Bekenstein, Mr. Gunn, Mr. Reiss, and Ms. Butts, with Ms. Butts
serving as chairperson of the committee. The nominating and governance committee’s primary responsibilities are to develop
and recommend to the board of directors criteria for board and committee membership and recommend to the board of
directors the persons to be nominated for election as directors and to each of the
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committees of the board of directors. The nominating and governance committee also reviews and makes recommendations
in respect of the company’s corporate governance principles and practices and associated disclosure.
Vision Committee
During Fiscal 2022, our vision committee was composed of Mr. Reiss, Mr. Armstrong, Ms. Chiquet, Mr. Cotton and Mr. Huët
with Mr. Reiss serving as chairperson of the committee. The vision committee’s primary responsibilities were to develop and
recommend to the board of directors ideas to facilitate the company’s transition as global luxury brand into the emerging digital
age. The vision committee, having fulfilled its mandate, was dissolved in February 2022.
Environmental and Social Committee
Our environmental and social committee was established in February 2022 and is composed of Mr. Armstrong, Mr. Cotton,
Ms. Butts and Mr. Huët with Mr. Armstrong serving as the chairperson of the committee. The environmental and social
committee’s primary responsibilities are to provide oversight of the company’s ongoing commitment to environmental and
social policies, plans and programs to ensure a comprehensive environmental, social and governance program.
D. Employees
As of April 3, 2022, March 28, 2021, and March 29, 2020, we had 4,353, 3,590, and 1,219 employees, including both full-time
and part-time employees however excluding those on leave. The number of employees by function as of the end of the period
for our fiscal years ended April 3, 2022, March 28, 2021, and March 29, 2020 was as follows:
By Function:
Canadian manufacturing
Selling and retail
Corporate head offices
Total
2022
2021
2020
2,872
742
739
4,353
2,489
557
544
3,590
389
352
478
1,219
As of April 3, 2022, the company has 347 employees on leave including 25 employees whose leave is related to COVID-19
and 322 employees who are on leave for maternity, medical, disability and/or unpaid leave. The increase in the number of
selling and retail employees was primarily due to the opening of our new retail stores in fiscal 2022. We also had a greater
number of employees at our corporate head offices in fiscal 2022 to support the continued growth of our business.
E. Share Ownership
See Item 6.B. - “Compensation” and Item 7 - “Major Shareholders and Related Party Transactions.”
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ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
A. Major Shareholders.
Security Ownership
The following table sets forth information relating to the beneficial ownership of our shares as of May 5, 2022, by:
• each person or group who is known by us to own beneficially more than 5% of our subordinate voting shares;
• each of our directors; and
• each of our named executive officers.
Beneficial ownership is determined in accordance with SEC rules. The information is not necessarily indicative of beneficial
ownership for any other purpose. In general, under these rules a beneficial owner of a security includes any person who, directly
or indirectly, through any contract, arrangement, understanding, relationship or otherwise has or shares voting power or
investment power with respect to such security. A person is also deemed to be a beneficial owner of a security if that person has
the right to acquire beneficial ownership of such security within 60 days. Except as otherwise indicated, and subject to
applicable community property laws, the persons named in the table have sole voting and investment power with respect to all
shares held by that person.
The percentage of voting shares beneficially owned is computed on the basis of 54,190,432 subordinate voting shares and
51,004,076 multiple voting shares outstanding as of May 5, 2022.
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(2)
(1)
(6)
(4)
(5)
Name and address of beneficial owner
5% shareholders:
Entities affiliated with Bain Capital
Investors, LLC
Dani Reiss
(3)
FMR
Morgan Stanley
Macquarie Group Limited
Named executive officers and directors:
Joshua Bekenstein
Jodi Butts
Maureen Chiquet
Ryan Cotton
Stephen Gunn
Jean-Marc Huët
John Davison
Michael D. Armstrong
Belinda Wong
Jonathan Sinclair
Michael (Woody) Blackford
Pat Sherlock
Penny Brook
(6)
Subordinate Voting Shares
Percentage
of
shares
Number
of
shares
Multiple Voting Shares
Percentage
of
shares
Number
of
shares
—
524,435
4,189,647
8,962,382
4,031,603
—
36,261
55,889
—
70,578
70,767
45,598
2,061
—
94,825
28,414
34,715
57,397
—
*
7.7 %
16.5 %
7.4 %
— %
*
*
— %
*
*
*
*
*
*
*
*
*
30,873,742
20,130,334
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
60.5 %
39.5 %
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
* Less than 1%
(1)
(2)
(3)
Includes 20,073,742 multiple voting shares registered in the name of Bain Capital Integral Investors 2008, L.P.
(“Integral 2008”) and 10,800,000 Multiple Voting Shares registered in the name of BCPE Fund X Goose Borrower,
L.P. (together with Integral 2008, the “Bain Capital Entities”). Bain Capital Investors, LLC (“BCI”) is the ultimate
general partner of each of the Bain Capital Entities. As a result, BCI may be deemed to exercise voting and
dispositive power with respect to the shares held by the Bain Capital Entities. Voting and investment decisions with
respect to the shares held by the Bain Capital Entities are made by the managing directors of BCI, of whom there are
three or more and none of whom individually has the power to direct such decisions. The address of each of the Bain
Capital Entities is c/o Bain Capital Private Equity, LP, 200 Clarendon Street, Boston, Massachusetts 02116.
Includes multiple voting shares registered in the name of DTR LLC, an entity indirectly controlled by Dani Reiss.
Based on information obtained from Schedule 13G filed by FMR LLC and its affiliates (“FMR”) on February 9, 2022.
According to that report, FMR possesses sole power to vote or to direct the voting of 1,418,482 of such shares and
possesses shared power to vote or to direct the voting of none of such shares and possesses sole power to dispose
or to direct the disposition of 4,189,647 of such shares and possesses shared power to dispose or to direct the
disposition of none of such shares. In
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addition, according to that report, FMR’s business address is 245 Summer Street., Boston, MA 02210.
(4)
(5)
(6)
Based on information obtained from Schedule 13G filed by Morgan Stanley and its affiliates (“Morgan Stanley”) on
February 9, 2022. According to that report, Morgan Stanley possesses sole power to vote or to direct the voting of
none of such shares and possesses shared power to vote or to direct the voting of 8,487,196 of such shares and
possesses sole power to dispose or to direct the disposition of none of such shares and possesses shared power to
dispose or to direct the disposition of 8,962,382 of such shares. In addition, according to that report, Morgan
Stanley’s business address is 1585 Broadway New York, NY 10036.
Based on information obtained from Schedule 13G filed by Macquarie Group Limited (“Macquarie”) due to the
reporting persons ownership of Macquarie Management Holdings Inc., Macquarie Investment Management Business
Trust and Ivy Investment Management Company on February 11, 2022. According to that report, entities reported as
owned by Macquarie collectively possess sole power to vote or direct the voting of 4,031,603 shares and possess
shared power to vote or to direct the voting of none of such shares. In addition, according to that report, Macquarie’s
business address is 50 Martin Place Sydney, New South Wales, Australia.
Does not include shares held by the Bain Capital Entities. Each of Messrs. Cotton and Bekenstein is a Managing
Director of BCI and as a result may be deemed to share beneficial ownership of the shares held by the Bain Capital
Entities. The address for Messrs. Cotton and Bekenstein is c/o Bain Capital Private Equity, LP, 200 Clarendon Street,
Boston, Massachusetts 02116.
Significant Changes in Ownership
We are not aware of significant changes in ownership of our multiple voting shares and subordinate voting shares during fiscal
2022.
Voting Rights
Holders of our multiple voting shares are entitled to 10 votes per multiple voting share and holders of subordinate voting shares
held in the United States (and outside the United States) are entitled to one vote per subordinate voting share on all matters
upon which holders of shares are entitled to vote.
U.S. Shareholders. On April 3, 2022, we had 3 registered shareholders with addresses in the United States (which may include
addresses of investment managers holding securities on behalf of non-U.S. beneficial owners) holding approximately
20,242,723 subordinate voting shares. Residents of the United States may beneficially own subordinate voting shares or
multiple voting shares registered in the names of non-residents of the United States, and non-U.S. residents may beneficially
own subordinate voting shares or multiple voting shares registered in the names of U.S. residents.
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Controlled Company
We are currently controlled by Bain Capital. As of April 3, 2022, Bain Capital indirectly beneficially owns approximately 60.5% of
our outstanding multiple voting shares, or approximately 54.7% of the combined voting power of our multiple voting and
subordinate voting shares outstanding.
B. Related Party Transactions
Investor Rights Agreement
In connection with our IPO, we entered into an Investor Rights Agreement with Bain Capital and DTR LLC, an entity indirectly
controlled by our Chairman and Chief Executive Officer (the “Investor Rights Agreement”).
The following is a summary of certain registration rights and nomination rights of our principal shareholders (including their
permitted affiliates and transferees) under the Investor Rights Agreement, which summary is not intended to be complete. The
following discussion is qualified in its entirety by the full text of the Investor Rights Agreement.
Registration Rights
Pursuant to the Investor Rights Agreement, Bain Capital is entitled to certain demand registration rights which enable it to
require us to file a registration statement and/or a Canadian prospectus and otherwise assist with public offerings of subordinate
voting shares (including subordinate voting shares issuable upon conversion of multiple voting shares) under the Securities Act
and applicable Canadian securities laws, in accordance with the terms and conditions of the Investor Rights Agreement. DTR
LLC is entitled to similar demand registration rights at such time as Bain Capital no longer holds securities subject to registration
rights, as well as certain incidental registration rights in connection with demand registrations initiated by Bain Capital, and each
of Bain Capital and DTR LLC is entitled to certain “piggy-back” registration rights in the event that we propose to register
securities as part of a public offering.
We are entitled to postpone or suspend a registration request for a period of up to 60 days during any 12-month period where
such registration request would require us to make any adverse disclosure. In addition, in connection with an underwritten
offering, the number of securities to be registered thereunder may be limited, for marketing reasons, based on the opinion of the
managing underwriter or underwriters for such offering.
All costs and expenses associated with any demand registration or “piggy-back” registration will be borne by us other than
underwriting discounts, commissions and transfer taxes, if any, attributable to the sale of the subordinate voting shares
(including following the conversion of multiple voting shares) by the applicable selling shareholder. We will also be required to
provide indemnification and contribution for the benefit of Bain Capital and DTR LLC and their respective affiliates and
representatives in connection with any demand registration or “piggy-back” registration.
Nomination Rights
Pursuant to the Investor Rights Agreement, Bain Capital is entitled to designate 50% of our directors (rounding up to the next
whole number) and will continue to be entitled to designate such percentage of our directors for so long as it holds at least 40%
of the number of subordinate voting shares and multiple voting shares outstanding, provided that this percentage
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will be reduced (i) to the greater of one director or 30% of our directors (rounding up to the next whole number) once Bain
Capital holds less than 40% of the subordinate voting shares and multiple voting shares outstanding, (ii) to the greater of one
director or 10% of our directors (rounding up to the next whole number) once Bain Capital holds less than 20% of the
subordinate voting shares and multiple voting shares outstanding, and (iii) to none once Bain Capital holds less than 5% of the
subordinate voting shares and multiple voting shares outstanding. DTR LLC is entitled to designate one director for as long as it
holds 5% or more of the subordinate voting shares and multiple voting shares outstanding.
The nomination rights contained in the Investor Rights Agreement provide that Bain Capital and DTR LLC, at the relevant time,
will cast all votes to which they are entitled to elect directors designated in accordance with the terms and conditions of the
Investor Rights Agreement.
Other Related Party Transactions
During fiscal 2022, the company contributed approximately $1.1m to Polar Bears International (PBI), a charitable organization
for which our Chairman and Chief Executive Officer, Dani Reiss, serves as a board member. The company also paid the Baffin
vendor and related entities, which continue to be controlled by Paul Hubner, a member of management of the company,
approximately $1.4m for lease costs associated with the Baffin manufacturing facility and other operating costs.
In addition, during fiscal 2020, affiliates of Bain Capital acquired a majority interest in Kantar Group. Since the acquisition, the
company incurred fees of approximately $0.6m related to consulting services provided by Kantar Group and its related entities.
Interest of Management and Others in Material Transactions
Except as set out above or described elsewhere in this Annual Report, there are no material interests, direct or indirect, of any of
our directors or executive officers, any shareholder that beneficially owns, or controls or directs (directly or indirectly), more than
10% of any class or series of our outstanding voting securities, or any associate or affiliate of any of the foregoing persons, in
any transaction within the three years before the date in this Annual Report that has materially affected or is reasonably
expected to materially affect us or any of our subsidiaries.
Indebtedness of Directors, Executive Officers and Employees
Except as set out above or described elsewhere in this Annual Report, as of the date of this Annual Report, none of our
directors, executive officers, employees, former directors, former executive officers or former employees or any of our
subsidiaries, and none of their respective associates, is indebted to us or any of our subsidiaries or another entity whose
indebtedness is the subject of a guarantee, support agreement, letter of credit or other similar agreement or understanding
provided by us or any of our subsidiaries, except, as the case may be, for routine indebtedness as defined under applicable
securities legislations.
C. Interests of Experts and Counsel
Not applicable.
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ITEM 8. FINANCIAL INFORMATION
A. Consolidated Financial Statements and Other Financial Information
See Item 18. — “Financial Statements.”
A.7 Legal Proceedings
From time to time, we may be subject to legal or regulatory proceedings and claims in the ordinary course of business, including
proceedings to protect our intellectual property rights. As part of our monitoring program for our intellectual property rights, from
time to time we file lawsuits for acts of trademark counterfeiting, trademark infringement, trademark dilution, patent infringement
or breach of other state or foreign laws. These actions often result in seizure of counterfeit merchandise and negotiated
settlements with defendants. Defendants sometime raise the invalidity or unenforceability of our proprietary rights as affirmative
defenses or counterclaims.
A.8 Dividend Policy
Our board of directors does not currently intend to pay dividends on our subordinate voting shares or multiple voting shares. We
currently intend to retain any future earnings to fund business development and growth, and we do not expect to pay any
dividends in the foreseeable future. Any future determination to declare cash dividends will be made at the discretion of our
board of directors, subject to applicable laws, and will depend on a number of factors, including our financial condition, results of
operations, capital requirements, contractual restrictions, general business conditions and other factors that our board of
directors may deem relevant. Currently, the provisions of our senior secured credit facilities place certain limitations on the
amount of cash dividends that our main operating subsidiary can pay.
B. Significant Changes
We have not experienced any significant changes since the date of our Annual Financial Statements included in this Annual
Report.
ITEM 9. THE OFFER AND LISTING
Not applicable except for Item 9.A.4 and Item 9.C.
Our subordinate voting shares have been listed on both the New York Stock Exchange and the Toronto Stock Exchange since
March 16, 2017 under the symbol “GOOS.”
ITEM 10. ADDITIONAL INFORMATION
A. Share Capital
Not applicable.
B. Notice of Articles and Articles of Association
The following is a summary of certain important provisions of our articles and certain related sections of the BCBCA. Please
note that this is only a summary and is not intended to be exhaustive. This summary is subject to, and is qualified in its entirety
by reference to, the provisions of our articles and the BCBCA.
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Stated Objects or Purposes
Our articles do not contain stated objects or purposes and do not place any limitations on the business that we may carry on.
Directors
Power to vote on matters in which a director is materially interested. Under the BCBCA a director who has a material interest in
a contract or transaction, whether made or proposed, that is material to us, must disclose such interest to us, subject to certain
exceptions such as if the contract or transaction: (i) is an arrangement by way of security granted by us for money loaned to, or
obligations undertaken by, the director for our benefit or for one of our affiliates’ benefit; (ii) relates to an indemnity or insurance
permitted under the BCBCA; (iii) relates to the remuneration of the director in his or her capacity as director, officer, employee or
agent of our company or of one of our affiliates; (iv) relates to a loan to our company while the director is the guarantor of some
or all of the loan; or (v) is with a corporation that is affiliated with us while the director is also a director or senior officer of that
corporation or an affiliate of that corporation.
A director who holds such disclosable interest in respect of any material contract or transaction into which we have entered or
propose to enter may be required to absent himself or herself from the meeting while discussions and voting with respect to the
matter are taking place. Directors will also be required to comply with certain other relevant provisions of the BCBCA regarding
conflicts of interest.
Directors’ power to determine the remuneration of directors. The remuneration of our directors, if any, may be determined by our
directors subject to our articles. The remuneration may be in addition to any salary or other remuneration paid to any of our
employees (including executive officers) who are also directors.
Number of shares required to be owned by a director. Neither our articles nor the BCBCA provide that a director is required to
hold any of our shares as a qualification for holding his or her office. Our board of directors has discretion to prescribe minimum
share ownership requirements for directors. To align the economic interests of directors with those of our shareholders, directors
are granted share-based compensation on an annual basis for their services and are further encouraged to purchase securities
of the company. Moreover, the company has adopted director share ownership guidelines for non-executive directors, which are
set at two times (2x) each director’s annual retainer, such ownership requirement to be progressively achieved over a period of
five years from each director’s appointment to the board of directors. The director share ownership requirement can be satisfied
through the ownership of shares directly owned, vested in-the-money stock options and restricted share units.
Issuance of Additional Multiple Voting Shares
The rules of the TSX generally prohibit us from issuing additional multiple voting shares, however there may be certain
circumstances where additional multiple voting shares may be issued, including upon receiving shareholder approval. Notably,
approval is not required in connection with a subdivision or consolidation on a pro rata basis as between the subordinate voting
shares and the multiple voting shares.
Subdivision or Consolidation
No subdivision or consolidation of the subordinate voting shares or the multiple voting shares may be carried out unless, at the
same time, the multiple voting shares or the subordinate voting
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shares, as the case may be, are subdivided or consolidated in the same manner and on the same basis.
Certain Amendments and Change of Control
In addition to any other voting right or power to which the holders of subordinate voting shares shall be entitled by law or
regulation or other provisions of our articles from time to time in effect, but subject to the provisions of our articles, holders of
subordinate voting shares shall be entitled to vote separately as a class, in addition to any other vote of our shareholders that
may be required, in respect of any alteration, repeal or amendment of our articles which would adversely affect the rights or
special rights of the holders of subordinate voting shares or affect the holders of subordinate voting shares and multiple voting
shares differently, on a per share basis, including an amendment to our articles that provides that any multiple voting shares
sold or transferred to a Person that is not a Permitted Holder shall be automatically converted into subordinate voting shares.
Pursuant to our articles, holders of subordinate voting shares and multiple voting shares will be treated equally and identically,
on a per share basis, in certain change of control transactions that require approval of our shareholders under the BCBCA,
unless different treatment of the shares of each such class is approved by a majority of the votes cast by the holders of our
subordinate voting shares and multiple voting shares, each voting separately as a class.
Our articles do not otherwise contain any change of control limitations with respect to a merger, acquisition or corporate
restructuring that involves us.
Shareholder Meetings
Subject to applicable stock exchange requirements, we must hold a general meeting of our shareholders at least once every
calendar year at a time and place determined by our board of directors, provided that the meeting must not be held later than 15
months after the preceding annual general meeting. A meeting of our shareholders may be held anywhere in or outside British
Columbia.
A notice to convene a meeting, specifying the date, time and location of the meeting, and, where a meeting is to consider
special business, the general nature of the special business must be sent to each shareholder entitled to attend the meeting and
to each director not less than 21 days and no more than 60 days prior to the meeting, although, as a result of applicable
securities laws, the minimum time for notice is effectively longer in most circumstances. Under the BCBCA, shareholders
entitled to notice of a meeting may waive or reduce the period of notice for that meeting, provided applicable securities laws are
met. The accidental omission to send notice of any meeting of shareholders to, or the non-receipt of any notice by, any person
entitled to notice does not invalidate any proceedings at that meeting.
A quorum for meetings of shareholders is present if shareholders who, in the aggregate, hold at least 25% of the issued shares
plus at least a majority of multiple voting shares entitled to be voted at the meeting are present in person or represented by
proxy. If a quorum is not present within one-half hour from the time set for the holding of any meeting of shareholders, the
meeting stands adjourned to the same day in the next week at the same time and place, unless the meeting was requisitioned
by shareholders, in which case the meeting is dissolved.
Holders of our subordinate voting shares and multiple voting shares are entitled to attend and vote at meetings of our
shareholders except meetings at which only holders of a particular class are entitled to vote. Except as otherwise provided with
respect to any particular series of
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preferred shares, and except as otherwise required by law, the holders of our preferred shares are not entitled as a class to
receive notice of, or to attend or vote at any meetings of our shareholders. Our directors, our officers, our auditor and any other
persons invited by our chairman or directors or with the consent of those at the meeting are entitled to attend any meeting of our
shareholders but will not be counted in the quorum or be entitled to vote at the meeting unless he or she is a shareholder or
proxyholder entitled to vote at the meeting.
Shareholder Proposals and Advance Notice Procedures
Under the BCBCA, qualified shareholders holding shares that constitute (i) at least one percent (1%) of our issued voting shares
or (ii) have a fair market value in excess of C$2,000 may make proposals for matters to be considered at the annual general
meeting of shareholders. Such proposals must be sent to us in advance of any proposed meeting by delivering a timely written
notice in proper form to our registered office in accordance with the requirements of the BCBCA. The notice must include
information on the business the shareholder intends to bring before the meeting. To be a qualified shareholder, a shareholder
must currently be and have been a registered or beneficial owner of at least one share of the company for at least two years
before the date of signing the proposal.
We have included certain advance notice provisions with respect to the election of our directors in our articles (the “Advance
Notice Provisions”). The Advance Notice Provisions are intended to: (i) facilitate orderly and efficient annual general meetings
or, where the need arises, special meetings; (ii) ensure that all shareholders receive adequate notice of board nominations and
sufficient information with respect to all nominees; and (iii) allow shareholders to register an informed vote. Only persons who
are nominated in accordance with the Advance Notice Provisions will be eligible for election as directors at any annual meeting
of shareholders, or at any special meeting of shareholders if one of the purposes for which the special meeting was called was
the election of directors.
Under the Advance Notice Provisions, a shareholder wishing to nominate a director would be required to provide us notice, in
the prescribed form, within the prescribed time periods. These time periods include, (i) in the case of an annual meeting of
shareholders (including annual and special meetings), not less than 30 days prior to the date of the annual meeting of
shareholders; provided, that if the first public announcement of the date of the annual meeting of shareholders (the “Notice
Date”) is less than 50 days before the meeting date, not later than the close of business on the 10 day following the Notice
Date; and (ii) in the case of a special meeting (which is not also an annual meeting) of shareholders called for any purpose
which includes electing directors, not later than the close of business on the 15 day following the Notice Date, provided that, in
either instance, if notice-and-access (as defined in National Instrument 54-101-Communication with Beneficial Owners of
Securities of a Reporting Issuer) is used for delivery of proxy related materials in respect of a meeting described above, and the
Notice Date in respect of the meeting is not less than 50 days prior to the date of the applicable meeting, the notice must be
received not later than the close of business on the 40 day before the applicable meeting.
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These provisions could have the effect of delaying until the next shareholder meeting the nomination of certain persons for
director that are favored by the holders of a majority of our outstanding voting securities.
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Take-Over Bid Protection
Under applicable securities laws in Canada, an offer to purchase multiple voting shares would not necessarily require that an
offer be made to purchase subordinate voting shares. In accordance with the rules of the TSX designed to ensure that, in the
event of a take-over bid, the holders of subordinate voting shares will be entitled to participate on an equal footing with holders
of multiple voting shares, the holders of multiple voting shares have entered into a customary coattail agreement with us and a
trustee (the “Coattail Agreement”). The Coattail Agreement contains provisions customary for dual-class, TSX-listed
corporations designed to prevent transactions that otherwise would deprive the holders of subordinate voting shares of rights
under applicable securities laws in Canada to which they would have been entitled if the multiple voting shares had been
subordinate voting shares.
The undertakings in the Coattail Agreement do not apply to prevent a sale by the holders of multiple voting shares (including
applicable transferees from time to time) if concurrently an offer is made to purchase subordinate voting shares that:
(a) offers a price per subordinate voting share at least as high as the highest price per share to be paid pursuant to the take-
over bid for the multiple voting shares;
(b) provides that the percentage of outstanding subordinate voting shares to be taken up (exclusive of shares owned
immediately prior to the offer by the offeror or persons acting jointly or in concert with the offeror) is at least as high as
the percentage of multiple voting shares to be sold (exclusive of multiple voting shares owned immediately prior to the
offer by the offeror and persons acting jointly or in concert with the offeror);
(c) has no condition attached other than the right not to take up and pay for subordinate voting shares tendered if no shares
are purchased pursuant to the offer for multiple voting shares; and
(d) is in all other material respects identical to the offer for multiple voting shares.
In addition, the Coattail Agreement does not prevent the transfer of multiple voting shares to Permitted Holders, provided such
transfer is not or would not have been subject to the requirements to make a take-over bid (if the vendor or transferee were in
Canada) or constitutes or would be exempt from certain requirements applicable to take-over bids under applicable securities
laws in Canada. The conversion of multiple voting shares into subordinate voting shares, whether or not such subordinate voting
shares are subsequently sold, would not constitute a disposition of multiple voting shares for the purposes of the Coattail
Agreement.
Under the Coattail Agreement, any sale of multiple voting shares by a holder of multiple voting shares party to the Coattail
Agreement is conditional upon the transferee becoming a party to the Coattail Agreement, to the extent such transferred multiple
voting shares are not automatically converted into subordinate voting shares in accordance with our articles.
The Coattail Agreement contains provisions for authorizing action by the trustee to enforce the rights under the Coattail
Agreement on behalf of the holders of the subordinate voting shares. The obligation of the trustee to take such action is
conditional on us or holders of the subordinate voting shares providing such funds and indemnity as the trustee may reasonably
require. No holder of subordinate voting shares will have the right, other than through the trustee, to institute any action or
proceeding or to exercise any other remedy to enforce any rights arising under the Coattail Agreement unless the trustee fails to
act on a request authorized by holders of not less than 10% of the outstanding subordinate voting shares and reasonable funds
and indemnity have been provided to the trustee.
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Other than in respect of non-material amendments and waivers that do not adversely affect the interests of holders of
subordinate voting shares, the Coattail Agreement provides that, among other things, it may not be amended, and no provision
thereof may be waived, unless, prior to giving effect to such amendment or waiver, the following have been obtained: (a) the
consent of the TSX and any other applicable securities regulatory authority in Canada; and (b) the approval of at least two-thirds
of the votes cast by holders of subordinate voting shares represented at a meeting duly called for the purpose of considering
such amendment or waiver, excluding votes attached to subordinate voting shares held by the holders of multiple voting shares
or their affiliates and related parties and any persons who have an agreement to purchase multiple voting shares on terms which
would constitute a sale or disposition for purposes of the Coattail Agreement, other than as permitted thereby.
No provision of the Coattail Agreement limits the rights of any holders of subordinate voting shares under applicable law.
Forum Selection
We have included a forum selection provision in our articles that provides that, unless we consent in writing to the selection of
an alternative forum, the Superior Court of Justice of the Province of Ontario, Canada and the appellate courts therefrom, will be
the sole and exclusive forum for (i) any derivative action or proceeding brought on our behalf; (ii) any action or proceeding
asserting a claim of breach of a fiduciary duty owed by any of our directors, officers, or other employees to us; (iii) any action or
proceeding asserting a claim arising pursuant to any provision of the BCBCA or our articles; or (iv) any action or proceeding
asserting a claim otherwise related to the relationships among us, our affiliates and their respective shareholders, directors
and/or officers, but excluding claims related to our business or such affiliates. The forum selection provision also provides that
our securityholders are deemed to have consented to personal jurisdiction of the provincial and federal courts located in the
Province of Ontario and to service of process on their counsel in any foreign action initiated in violation of the foregoing
provisions.
Limitation of Liability and Indemnification
Under the BCBCA, a company may indemnify: (i) a current or former director or officer of that company; (ii) a current or former
director or officer of another corporation if, at the time such individual held such office, the corporation was an affiliate of the
company, or if such individual held such office at the company’s request; or (iii) an individual who, at the request of the company,
held, or holds, an equivalent position in another entity (an “indemnifiable person”) against all costs, charges and expenses,
including an amount paid to settle an action or satisfy a judgment, reasonably incurred by him or her in respect of any civil,
criminal, administrative or other legal proceeding or investigative action (whether current, threatened, pending or completed) in
which he or she is involved because of that person’s position as an indemnifiable person, unless: (i) the individual did not act
honestly and in good faith with a view to the best interests of such company or the other entity, as the case may be; or (ii) in the
case of a proceeding other than a civil proceeding, the individual did not have reasonable grounds for believing that the
individual’s conduct was lawful. A company cannot indemnify an indemnifiable person if it is prohibited from doing so under its
articles or by applicable law. A company may pay, as they are incurred in advance of the final disposition of an eligible
proceeding, the expenses actually and reasonably incurred by an indemnifiable person in respect of that proceeding only if the
indemnifiable person has provided an undertaking that, if it is ultimately determined that the payment of expenses was
prohibited, the indemnifiable person will repay
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any amounts advanced. Subject to the aforementioned prohibitions on indemnification, a company must, after the final
disposition of an eligible proceeding, pay the expenses actually and reasonably incurred by an indemnifiable person in respect
of such eligible proceeding if such indemnifiable person has not been reimbursed for such expenses, and was wholly
successful, on the merits or otherwise, in the outcome of such eligible proceeding or was substantially successful on the merits
in the outcome of such eligible proceeding. On application from an indemnifiable person or the company, a court may make any
order the court considers appropriate in respect of an eligible proceeding, including the indemnification of penalties imposed or
expenses incurred in any such proceedings and the enforcement of an indemnification agreement. As permitted by the BCBCA,
our articles require us to indemnify our directors, officers, former directors or officers (and such individual’s respective heirs and
legal representatives) and permit us to indemnify any person to the extent permitted by the BCBCA.
C. Material Contracts
The following is a summary of each material contract, other than material contracts entered into in the ordinary course of
business, to which we are a party, for the two years immediately preceding the date of this Annual Report:
Employment Agreements
See Item 6.B. — “Directors, Senior Management and Employees” — “Compensation” — “Employment Agreements and
Arrangements with Directors and Related Parties”.
Revolving Facility Credit Agreement
On June 3, 2016, Canada Goose Holdings Inc. and its wholly-owned subsidiaries, Canada Goose Inc. and Canada Goose
International AG, entered into a senior secured asset-based revolving facility (the “Revolving Facility”), with Canadian Imperial
Bank of Commerce, as administrative agent, and certain financial institutions as lenders. A copy of the Revolving Facility Credit
Agreement is included as Exhibit 10.3 to the company’s Registration Statement on Form F-1, as amended (File No. 333-
216078), filed with the SEC on February 15, 2017, and is incorporated by reference herein. As amended through the date
hereof, the amended revolving facility consists of the existing revolving facility with a reduced commitment in the amount of
$417.5m with a seasonal increase of up to $467.5m during the peak season (being June 1 through November 30), and a first-in,
last-out (“FILO”) revolving facility in the amount of $50.0m. Borrowings under the existing Revolving Facility were transferred to
the FILO Revolving Facility on the transaction date and future amounts will be drawn in priority of the FILO Revolving Facility.
Amounts drawn on the FILO revolving facility are subject to an interest rate charge that is 2.00% higher than the existing
revolving facility. The FILO revolving facility matured on May 25, 2021 and upon maturity, the credit commitments on the existing
revolving facility were restored.
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Term Loan Credit Agreement
On December 2, 2016, Canada Goose Holdings Inc. and Canada Goose Inc. entered into a senior secured term loan facility (the
“Term Loan Facility”), with Credit Suisse AG, Cayman Islands Branch, as administrative agent and collateral agent, and certain
financial institutions as lenders. A copy of the Term Loan Credit Agreement is included as Exhibit 10.4 to the company’s
Registration Statement on Form F-1, as amended (File No. 333-216078), filed with the SEC on February 15, 2017, and is
incorporated by reference herein.
On August 15, 2017, the company entered into an amendment (the “2017 Term Loan Amendment”) to the Term Loan Facility.
The 2017 Term Loan Amendment was executed in connection with the syndication of the outstanding term loans by the existing
term loan lenders and, among other things: (i) added a provision whereby the company would be required to pay a 1%
prepayment premium on any prepayment of the term loans made in connection with a “Repricing Transaction” (as defined in the
2017 Term Loan Amendment) or in connection with an amendment that constitutes a Repricing Transaction, in each case,
within six months from August 15, 2017 and (ii) reset the “most-favored nation” protection in favor of the term loan lenders in the
incremental facilities provisions of the Term Loan Facility, whereby if the company were to issue additional term loans under
such incremental facilities provisions within 18 months from August 15, 2017 and the all-in yield on such additional term loans
were to exceed the all-in-yield on the existing term loans by more than 50 basis points, the all-in-yield on such existing term
loans would be increased so that the all-in-yield of the additional term loans does not exceed the all-in-yield on the existing term
loans by more than 50 basis points. As further amended through the date hereof, the maturity date for the Term Loan Facility is
October 7, 2027.
On April 9, 2021, the company entered into an amendment (the “2021 Term Loan Amendment) to the Term Loan Facility. The
term loans issued in connection with the 2021 Term Loan Amendment (the “2021 Refinancing Term Loans”) were used, in part,
to refinance in full all of the existing term loans outstanding under the Term Loan Facility. The interest rates for the 2021
Refinancing Term Loans are LIBOR plus an applicable margin of 3.50%, payable quarterly in arrears.
Indemnification Agreements
We have entered into indemnification agreements with our directors and executive officers pursuant to which we have agreed to
indemnify them against a number of liabilities and expenses incurred by such persons in connection with claims made by reason
of their being a director or executive officer of the company. A copy of the Form of Indemnification Agreement is included as
Exhibit 10.28 to the company’s Registration Statement on Form F-1, as amended (File No. 333-216078), filed with the SEC on
February 15, 2017, and is incorporated by reference herein.
D. Exchange Controls
We are not aware of any governmental laws, decrees, regulations or other legislation in Canada that restrict the export or import
of capital, including the availability of cash and cash equivalents for use by our affiliated companies, or that affect the remittance
of dividends, interest or other payments to non-resident holders of our securities. Any remittances of dividends to residents of
the United States and to other non-resident holders are, however, subject to withholding tax. See Item 10.E. - “Taxation”.
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E. Taxation
Subject to the limitations and qualifications stated herein, this discussion sets forth certain material U.S. federal income tax
considerations relating to the ownership and disposition by U.S. Holders (as defined below) of the subordinate voting shares.
The discussion is based on the U.S. Internal Revenue Code of 1986, as amended (the “Code”), its legislative history, existing
and proposed regulations thereunder, published rulings and court decisions, all as currently in effect and all subject to change at
any time, possibly with retroactive effect. This summary applies only to U.S. Holders and does not address tax consequences to
a non-U.S. Holder (as defined below) holding our subordinate voting shares.
This discussion of a U.S. Holder’s tax consequences addresses only those persons that hold our subordinate voting shares as
capital assets and does not address the tax consequences to any special class of holders, including without limitation, holders
(directly, indirectly or constructively) of 10% or more of our equity (based on voting power or value), dealers in securities or
currencies, banks, tax-exempt organizations, insurance companies, financial institutions, broker-dealers, regulated investment
companies, real estate investment trusts, traders in securities that elect the mark-to-market method of accounting for their
securities holdings, persons that hold securities that are a hedge or that are hedged against currency or interest rate risks or that
are part of a straddle, conversion or “integrated” transaction, U.S. expatriates, partnerships or other pass-through entities for
U.S. federal income tax purposes and U.S. Holders whose functional currency for U.S. federal income tax purposes is not the
U.S. dollar. This discussion does not address the effect of the U.S. federal alternative minimum tax, U.S. federal estate and gift
tax, the 3.8% Medicare contribution tax on net investment income or any state, local or non-U.S. tax laws on a holder of
subordinate voting shares.
For purposes of this discussion, a “U.S. Holder” is a beneficial owner of subordinate voting shares that is for U.S. federal income
tax purposes: (a) an individual who is a citizen or resident of the United States; (b) a corporation (or other entity taxable as a
corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States, any state
thereof or the District of Columbia; (c) an estate the income of which is subject to U.S. federal income taxation regardless of its
source; or (d) a trust (i) if a court within the United States can exercise primary supervision over its administration, and one or
more U.S. persons have the authority to control all of the substantial decisions of that trust, or (ii) that has a valid election in
effect under applicable Treasury regulations to be treated as a U.S. person. The term “non-U.S. Holder” means any beneficial
owner of our subordinate voting shares that is not a U.S. Holder, a partnership (or an entity or arrangement that is treated as a
partnership or other pass-through entity for U.S. federal income tax purposes) or a person holding our subordinate voting shares
through such an entity or arrangement.
If a partnership or an entity or arrangement that is treated as a partnership for U.S. federal income tax purposes holds our
subordinate voting shares, the tax treatment of a partner will generally depend upon the status of the partner and the activities of
the partnership. Partners in partnerships that hold our subordinate voting shares should consult their own tax advisors.
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You are urged to consult your own independent tax advisor regarding the specific U.S. federal, state, local and non-
U.S. income and other tax considerations relating to the ownership and disposition of our subordinate voting shares.
Cash Dividends and Other Distributions
As described in Item 8.A.8 above, we currently intend to retain any future earnings to fund business development and growth,
and we do not expect to pay any dividends in the foreseeable future. However, to the extent there are any distributions made
with respect to our subordinate voting shares, subject to the passive foreign investment company, or “PFIC,” rules discussed
below, a U.S. Holder generally will be required to treat distributions received with respect to its subordinate voting shares
(including the amount of Canadian taxes withheld, if any) as dividend income to the extent of our current or accumulated
earnings and profits (computed using U.S. federal income tax principles), with the excess treated as a non-taxable return of
capital to the extent of the holder’s adjusted tax basis in its subordinate voting shares and, thereafter, as capital gain recognized
on a sale or exchange of such subordinate voting shares. There can be no assurance that we will maintain calculations of our
earnings and profits in accordance with U.S. federal income tax accounting principles. U.S. Holders should therefore assume
that any distribution with respect to our subordinate voting shares will constitute ordinary dividend income. Dividends paid on the
subordinate voting shares will not be eligible for the dividends received deduction allowed to U.S. corporations.
Dividends paid to a non-corporate U.S. Holder by a “qualified foreign corporation” may be subject to reduced rates of taxation if
certain holding period and other requirements are met. A qualified foreign corporation generally includes a foreign corporation
(other than a PFIC) if (i) its shares are readily tradable on an established securities market in the United States or (ii) it is eligible
for benefits under a comprehensive U.S. income tax treaty that includes an exchange of information program and which the U.S.
Treasury Department has determined is satisfactory for these purposes. U.S. Holders should consult their own tax advisors
regarding the availability of the reduced tax rate on dividends in light of their particular circumstances.
Non-corporate U.S. Holders will not be eligible for reduced rates of taxation on any dividends received from us if we are a PFIC
in the taxable year in which such dividends are paid or in the preceding taxable year.
Special rules may apply to any “extraordinary dividend,” which is generally a dividend paid by us in an amount that is equal to or
in excess of ten percent of a U.S. Holder’s adjusted tax basis (or fair market value in certain circumstances) in a share of our
subordinate voting shares. If we pay an “extraordinary dividend’ on our subordinate voting shares that is treated as “qualified
dividend income,” then any loss derived by a non-corporate U.S. Holder from the sale or exchange of such subordinate voting
shares will be treated as long-term capital loss to the extent of such dividend.
Distributions paid in a currency other than U.S. dollars will be included in a U.S. Holder’s gross income in a U.S. dollar amount
based on the spot exchange rate in effect on the date of actual or constructive receipt, whether or not the payment is converted
into U.S. dollars at that time. The U.S. Holder will have a tax basis in such currency equal to such U.S. dollar amount, and any
gain or loss recognized upon a subsequent sale or conversion of the foreign currency for a different U.S. dollar amount will be
U.S. source ordinary income or loss. If the dividend is converted into U.S. dollars on the date of receipt, a U.S. Holder generally
should not be required to recognize foreign currency gain or loss in respect of the dividend income.
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A U.S. Holder who pays (whether directly or through withholding) Canadian taxes with respect to dividends paid on our
subordinate voting shares may be entitled to receive either a deduction or a foreign tax credit for such Canadian taxes paid.
Complex limitations apply to the foreign tax credit, including the general limitation that the credit cannot exceed the proportionate
share of a U.S. Holder’s U.S. federal income tax liability that such U.S. Holder’s “foreign source” taxable income bears to such
U.S. Holder’s worldwide taxable income. In applying this limitation, a U.S. Holder’s various items of income and deduction must
be classified, under complex rules, as either “foreign source” or “U.S. source.” In addition, this limitation is calculated separately
with respect to specific categories of income. Dividends paid by us generally will constitute “foreign source” income and
generally will be categorized as “passive category income.” However, if 50% or more of our equity (based on voting power or
value) is treated as held by U.S. persons, we will be treated as a “United States-owned foreign corporation,” in which case
dividends may be treated for foreign tax credit limitation purposes as “foreign source” income to the extent attributable to our
non-U.S. source earnings and profits and as “U.S. source” income to the extent attributable to our U.S. source earnings and
profits. Because the foreign tax credit rules are complex, in the event we pay a dividend subject to Canadian dividend
withholding tax, each U.S. Holder should consult its own tax advisor regarding the foreign tax credit rules.
Sale or Disposition of Subordinate Voting Shares
A U.S. Holder generally will recognize gain or loss on the taxable sale or exchange of its subordinate voting shares in an amount
equal to the difference between the U.S. dollar amount realized on such sale or exchange (determined in the case of
subordinate voting shares sold or exchanged for currencies other than U.S. dollars by reference to the spot exchange rate in
effect on the date of the sale or exchange or, if the subordinate voting shares sold or exchanged are traded on an established
securities market and the U.S. Holder is a cash basis taxpayer or an electing accrual basis taxpayer, the spot exchange rate in
effect on the settlement date) and the U.S. Holder’s adjusted tax basis in the subordinate voting shares determined in U.S.
dollars. The initial tax basis of the subordinate voting shares to a U.S. Holder will be the U.S. Holder’s U.S. dollar purchase price
for the subordinate voting shares (determined by reference to the spot exchange rate in effect on the date of the purchase, or if
the subordinate voting shares purchased are traded on an established securities market and the U.S. Holder is a cash basis
taxpayer or an electing accrual basis taxpayer, the spot exchange rate in effect on the settlement date).
Assuming we are not a PFIC and have not been treated as a PFIC during a U.S. Holder’s holding period for our subordinate
voting shares, such gain or loss will be capital gain or loss and will be long-term gain or loss if the subordinate voting shares
have been held for more than one year. Under current law, long-term capital gains of non-corporate U.S. Holders generally are
eligible for reduced rates of taxation. The deductibility of capital losses is subject to limitations. Capital gain or loss, if any,
recognized by a U.S. Holder generally will be treated as U.S. source income or loss for U.S. foreign tax credit purposes. U.S.
Holders are encouraged to consult their own tax advisors regarding the availability of the U.S. foreign tax credit in their particular
circumstances.
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Passive Foreign Investment Company Considerations
Status as a PFIC
The rules governing PFICs can have adverse tax effects on U.S. Holders. We generally will be classified as a PFIC for U.S.
federal income tax purposes if, for any taxable year, either: (1) 75% or more of our gross income consists of certain types of
passive income, or (2) the average value (determined on a quarterly basis), of our assets that produce, or are held for the
production of, passive income is 50% or more of the value of all of our assets.
Passive income generally includes dividends, interest, rents and royalties (other than certain rents and royalties derived in the
active conduct of a trade or business), annuities and gains from assets that produce passive income. If a non-U.S. corporation
owns at least 25% by value of the stock of another corporation, the non-U.S. corporation is treated for purposes of the PFIC
tests as owning its proportionate share of the assets of the other corporation and as receiving directly its proportionate share of
the other corporation’s income.
Additionally, if we are classified as a PFIC in any taxable year with respect to which a U.S. Holder owns subordinate voting
shares, we generally would continue to be treated as a PFIC with respect to such U.S. Holder in all succeeding taxable years,
regardless of whether we continue to meet the tests described above, unless the U.S. Holder makes the “deemed sale election”
described below.
We do not believe that we were currently a PFIC last year, and we do not anticipate becoming a PFIC in the foreseeable future.
Notwithstanding the foregoing, the determination of whether we are a PFIC is made annually and depends on the particular
facts and circumstances (such as the valuation of our assets, including goodwill and other intangible assets) and also may be
affected by the application of the PFIC rules, which are subject to differing interpretations. No assurance can be provided that
we are not currently a PFIC or that we will not become a PFIC in any future taxable year. U.S. Holders should consult their own
tax advisors regarding our potential PFIC status.
U.S. federal income tax treatment of a shareholder of a PFIC
If we are classified as a PFIC for any taxable year during which a U.S. Holder owns subordinate voting shares, the U.S. Holder,
absent certain elections (including the mark-to-market and QEF elections described below), generally will be subject to adverse
rules (regardless of whether we continue to be classified as a PFIC) with respect to (i) any “excess distributions” (generally, any
distributions received by the U.S. Holder on its subordinate voting shares in a taxable year that are greater than 125% of the
average annual distributions received by the U.S. Holder in the three preceding taxable years or, if shorter, the U.S. Holder’s
holding period for its subordinate voting shares) and (ii) any gain realized on the sale or other disposition, including a pledge, of
its subordinate voting shares.
Under these adverse rules (a) the excess distribution or gain will be allocated ratably over the U.S. Holder’s holding period, (b)
the amount allocated to the current taxable year and any taxable year prior to the first taxable year in which we are classified as
a PFIC will be taxed as ordinary income and (c) the amount allocated to each other taxable year during the U.S. Holder’s
holding period in which we were classified as a PFIC (i) will be subject to tax at the highest rate of tax in effect for the applicable
category of taxpayer for that year and (ii) will be subject to an interest charge at a statutory rate with respect to the resulting tax
attributable to each such other taxable year. In addition, if a U.S. Holder dies while owning the subordinate
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voting shares, the U.S. Holder’s successor would be ineligible to receive a step-up in the tax basis of such shares.
If we are classified as a PFIC, a U.S. Holder will generally be treated as owning a proportionate amount (by value) of stock or
shares owned by us in any direct or indirect subsidiaries that are also PFICs and will be subject to similar adverse rules with
respect to any distributions we receive from, and dispositions we make of, the stock or shares of such subsidiaries. You are
urged to consult your tax advisors about the application of the PFIC rules to any of our subsidiaries.
If we are classified as a PFIC and then cease to be so classified, a U.S. Holder may make an election (a “deemed sale election”)
to be treated for U.S. federal income tax purposes as having sold such U.S. Holder’s subordinate voting shares on the last day
our taxable year during which we were a PFIC. A U.S. Holder that makes a deemed sale election would then cease to be
treated as owning stock in a PFIC by reason of ownership of our subordinate voting shares. However, gain recognized as a
result of making the deemed sale election would be subject to the adverse rules described above and loss would not be
recognized.
PFIC “mark-to-market” election
In certain circumstances, a U.S. Holder can avoid certain of the adverse rules described above by making a mark-to-market
election with respect to its subordinate voting shares, provided that the subordinate voting shares are “marketable.” Subordinate
voting shares will be marketable if they are “regularly traded” on a “qualified exchange” or other market within the meaning of
applicable U.S. Treasury Regulations. The NYSE is a “qualified exchange.” U.S. Holders should consult their own tax advisors
with respect to such rules.
A U.S. Holder that makes a mark-to-market election must include in gross income, as ordinary income, for each taxable year
that we are a PFIC an amount equal to the excess, if any, of the fair market value of the U.S. Holder’s subordinate voting shares
at the close of the taxable year over the U.S. Holder’s adjusted tax basis in its subordinate voting shares. An electing U.S.
Holder may also claim an ordinary loss deduction for the excess, if any, of the U.S. Holder’s adjusted tax basis in its subordinate
voting shares over the fair market value of its subordinate voting shares at the close of the taxable year, but this deduction is
allowable only to the extent of any net mark-to-market gains previously included in income. A U.S. Holder that makes a mark-to-
market election generally will adjust such U.S. Holder’s tax basis in its subordinate voting shares to reflect the amount included
in gross income or allowed as a deduction because of such mark-to-market election. Gains from an actual sale or other
disposition of subordinate voting shares in a year in which we are a PFIC will be treated as ordinary income, and any losses
incurred on a sale or other disposition of subordinate voting shares will be treated as ordinary losses to the extent of any net
mark-to-market gains previously included in income.
If we are classified as a PFIC for any taxable year in which a U.S. Holder owns subordinate voting shares but before a mark-to-
market election is made, the adverse PFIC rules described above will apply to any mark-to market gain recognized in the year
the election is made. Otherwise, a mark-to-market election will be effective for the taxable year for which the election is made
and all subsequent taxable years. The election cannot be revoked without the consent of the Internal Revenue Service (“IRS”)
unless the subordinate voting shares cease to be marketable, in which case the election is automatically terminated.
A mark-to-market election is not permitted for the shares of any of our subsidiaries that are also classified as PFICs. Prospective
investors should consult their own tax advisors regarding the availability of, and the procedure for making, a mark-to-market
election.
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PFIC “QEF” election
In some cases, a shareholder of a PFIC can avoid the interest charge and the other adverse PFIC consequences described
above by obtaining certain information from such PFIC and by making a QEF election to be taxed currently on its share of the
PFIC’s undistributed income. We do not, however, expect to provide the information regarding our income that would be
necessary in order for a U.S. Holder to make a QEF election with respect to subordinate voting shares if we are classified as a
PFIC.
PFIC information reporting requirements
If we are a PFIC in any year, a U.S. Holder of subordinate voting shares in such year will be required to file an annual
information return on IRS Form 8621 regarding distributions received on such subordinate voting shares and any gain realized
on disposition of such subordinate voting shares. In addition, if we are a PFIC, a U.S. Holder will generally be required to file an
annual information return with the IRS (also on IRS Form 8621, which PFIC shareholders are required to file with their U.S.
federal income tax or information return) relating to their ownership of subordinate voting shares.
NO ASSURANCE CAN BE GIVEN THAT WE ARE NOT CURRENTLY A PFIC OR THAT WE WILL NOT BECOME A PFIC IN
THE FUTURE. U.S. HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE OPERATION OF
THE PFIC RULES AND RELATED REPORTING REQUIREMENTS IN LIGHT OF THEIR PARTICULAR CIRCUMSTANCES,
INCLUDING THE ADVISABILITY OF MAKING ANY ELECTION THAT MAY BE AVAILABLE.
Reporting Requirements and Backup Withholding
Information reporting to the U.S. Internal Revenue Service generally will be required with respect to payments on the
subordinate voting shares and proceeds of the sale, exchange or redemption of the subordinate voting shares paid within the
United States or through certain U.S.-related financial intermediaries to holders that are U.S. taxpayers, other than exempt
recipients. A “backup” withholding tax may apply to those payments if such holder fails to provide a taxpayer identification
number to the paying agent or fails to certify that no loss of exemption from backup withholding has occurred (or if such holder
otherwise fails to establish an exemption). We or the applicable paying agent will withhold on a distribution if required by
applicable law. The amounts withheld under the backup withholding rules are not an additional tax and may be refunded, or
credited against the holder’s U.S. federal income tax liability, if any, provided the required information is timely furnished to the
IRS.
Canadian Tax Implications for Non-Canadian Holders
The following is a general summary, as of the date hereof, of the principal Canadian federal income tax considerations under
the Income Tax Act (Canada) and the regulations thereunder (collectively, the “Tax Act”) generally applicable to the holding and
disposition of subordinate voting shares by a beneficial owner. This summary only applies to such a holder who, for the
purposes of the Tax Act and at all relevant times: (1) is not, and is not deemed to be, resident in Canada for purposes of any
applicable income tax treaty or convention; (2) deals at arm’s length with us; (3) is not affiliated with us; (4) does not use or
hold, and is not deemed to use or hold, subordinate voting shares in a business carried on in Canada; (5) has not entered into,
with respect to the subordinate voting shares, a “derivative forward agreement” as that term is defined in the Tax Act and (6)
holds the subordinate voting shares as capital property (a “Non-
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Canadian Holder”). Special rules, which are not discussed in this summary, may apply to a Non-Canadian Holder that is an
insurer carrying on an insurance business in Canada and elsewhere or that is an “authorized foreign bank” as that term is
defined in the Tax Act.
This summary is based on the current provisions of the Tax Act, and an understanding of the current administrative policies of
the Canada Revenue Agency (“CRA”) published in writing prior to the date hereof. This summary takes into account all specific
proposals to amend the Tax Act and the Canada-United States Tax Convention (1980), as amended (the “Canada-U.S. Tax
Treaty”) publicly announced by or on behalf of the Minister of Finance (Canada) prior to the date hereof (the “Proposed
Amendments”) and assumes that all Proposed Amendments will be enacted in the form proposed. However, no assurances
can be given that the Proposed Amendments will be enacted as proposed, or at all. This summary does not otherwise take into
account or anticipate any changes in law or administrative policy or assessing practice whether by legislative, regulatory,
administrative or judicial action nor does it take into account tax legislation or considerations of any province, territory or foreign
jurisdiction, which may differ from those discussed herein.
This summary is of a general nature only and is not, and is not intended to be, legal or tax advice to any particular shareholder.
This summary is not exhaustive of all Canadian federal income tax considerations. Accordingly, you should consult your own
tax advisor with respect to your particular circumstances. Generally, for purposes of the Tax Act, all amounts relating to the
acquisition, holding or disposition of the subordinate voting shares must be converted into Canadian dollars based on the
exchange rates as determined in accordance with the Tax Act. The amount of any dividends required to be included in the
income of, and capital gains or capital losses realized by, a Non-Canadian Holder may be affected by fluctuations in the
Canadian exchange rate.
Dividends
Dividends paid or credited on the subordinate voting shares or deemed to be paid or credited on the subordinate voting shares
to a Non-Canadian Holder will be subject to Canadian withholding tax at the rate of 25%, subject to any reduction in the rate of
withholding to which the Non-Canadian Holder is entitled under any applicable income tax convention between Canada and the
country in which the Non-Canadian Holder is resident. For example, under the Canada-U.S. Tax Treaty, where dividends on the
subordinate voting shares are considered to be paid to or derived by a Non-Canadian Holder that is a beneficial owner of the
dividends and is a U.S. resident for the purposes of, and is entitled to benefits of, the Canada-U.S. Tax Treaty, the applicable
rate of Canadian withholding tax is generally reduced to 15%. A disposition of subordinate voting shares to us may in certain
circumstances result in a deemed dividend.
Dispositions
A Non-Canadian Holder will not be subject to tax under the Tax Act on any capital gain realized on a disposition or deemed
disposition of a subordinate voting share, unless, at the time of disposition, the subordinate voting shares are “taxable
Canadian property” to the Non-Canadian Holder for purposes of the Tax Act and the Non-Canadian Holder is not entitled to
relief under an applicable income tax convention between Canada and the country in which the Non-Canadian Holder is
resident.
Generally, the subordinate voting shares will not constitute “taxable Canadian property” to a Non-Canadian Holder at a
particular time provided that the subordinate voting shares are listed at that time on a “designated stock exchange” (as defined
in the Tax Act), which includes the
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NYSE and the TSX, unless at any particular time during the 60-month period that ends at that time (i) one or any combination
of (a) the Non- Canadian Holder, (b) persons with whom the Non-Canadian Holder does not deal at arm’s length, and (c)
partnerships in which the Non-Canadian Holder or a person described in (b) holds a membership interest directly or indirectly
through one or more partnerships, has owned 25% or more of the issued shares of any class or series of our capital stock, and
(ii) more than 50% of the fair market value of the subordinate voting shares was derived, directly or indirectly, from one or any
combination of : (i) real or immoveable property situated in Canada, (ii) “Canadian resource properties” (as defined in the Tax
Act), (iii) “timber resource properties” (as defined in the Tax Act) and (iv) options in respect of, or interests in, or for civil law
rights in, property in any of the foregoing whether or not the property exists. Notwithstanding the foregoing, in certain
circumstances set out in the Tax Act, subordinate voting shares could be deemed to be “taxable Canadian property.” Non-
Canadian Holders whose subordinate voting shares may constitute “taxable Canadian property” should consult their own tax
advisors.
THE ABOVE DISCUSSION DOES NOT COVER ALL TAX MATTERS THAT MAY BE OF IMPORTANCE TO A PARTICULAR
INVESTOR. YOU ARE STRONGLY URGED TO CONSULT YOUR OWN TAX ADVISOR ABOUT THE TAX CONSEQUENCES
TO YOU OF AN INVESTMENT IN THE SUBORDINATE VOTING SHARES.
F. Dividends and Payment Agents
Not applicable.
G. Statement by Experts
Not applicable.
H. Documents on Display
You may request a copy of this Annual Report and the related exhibits, and any other report, at no cost, by writing to us at 250
Bowie Ave, Toronto, Ontario, Canada, M6E 4Y2 or calling us at (416) 780-9850. Copies of our financial statements and other
continuous disclosure documents required under applicable securities legislation are available for viewing on SEDAR at
www.sedar.com. All of the documents referred to are in English.
We are subject to the informational requirements of the Exchange Act and are required to file reports and other information with
the SEC. The SEC maintains a website at www.sec.gov that contains reports, proxy and information statements, and other
information regarding registrants that make electronic filings with the SEC using its EDGAR system.
We also make available on our website’s investor relations page, free of charge, our Annual Report and the text of our reports
on Form 6-K, including any amendments to these reports, as well as certain other SEC filings, as soon as reasonably
practicable after they are electronically filed with or furnished to the SEC. The information contained on our website is not
incorporated by reference in this Annual Report.
I. Subsidiary Information
Not applicable.
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ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Please see Item 5.F — “Operating and Financial Review and Prospects” — “Quantitative and Qualitative Disclosures About
Market Risk”.
ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
Not applicable.
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ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
None.
PART II
ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
A. – D. Material Modifications to the Rights of Security Holders
None.
E. Use of Proceeds
None.
ITEM 15. CONTROLS AND PROCEDURES
A. – D.
See Item 5. - “Operating and Financial Review and Prospects” - “Management’s Discussion and Analysis of Financial Condition
and Results of Operations” - “Disclosure Controls and Procedures”, and “Management’s Annual Report on Internal Control over
Financial Reporting”.
ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT
Our audit committee is comprised of Messrs. Stephen Gunn, John Davison and Jean-Marc Huët, with Mr. Davison serving as
chairman of the committee. Messrs. Gunn, Davison and Huët each meet the independence requirements under the rules of the
New York Stock Exchange and under Rule 10A-3 under the Exchange Act. We have determined that Mr. Davison is an “audit
committee financial expert” within the meaning of Item 407 of Regulation S-K. For information relating to qualifications and
experience of each audit committee member, see Item 6 - “Directors, Senior Management and Employees”.
ITEM 16B. CODE OF ETHICS
Our board of directors has adopted a code of ethics applicable our principal executive officer, principal financial officer, principal
accounting officer or controller, and persons performing similar functions. This code is intended to qualify as a “code of ethics”
within
is available on our website at
https://investor.canadagoose.com/corporate-governance/governance-overview. Information contained on, or that can be
accessed through, our website is not incorporated by reference into this Annual Report.
the SEC. Our code of ethics
the applicable rules of
the meaning of
ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Principal Accountant Fees and Services
The following table summarizes the fees charged by Deloitte LLP (PCAOB ID No. 1208) for certain services rendered to our
company during fiscal 2022 and fiscal 2021.
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(1)
CAD $ millions
Audit fees
Audit-related fees
(3)
Tax fees
All other fees
Total
(4)
(2)
April 3, 2022
3.8
0.2
2.3
0.2
6.5
For the year ended
March 28, 2021
3.9
0.2
2.0
—
6.1
(1)
(2)
(3)
(4)
“Audit fees” means the aggregate fees billed in each of the fiscal years for professional services rendered by Deloitte
LLP for the audit of our annual financial statements and review of our interim financial statements.
“Audit-related fees” includes assurance and related services reasonably related to the financial statement audit and not
included in audit services.
“Tax fees” means the aggregate fees billed in each of the fiscal years for professional services rendered by Deloitte LLP
for tax compliance and tax advice.
“All other fees” includes the aggregate fees billed in each of the fiscal years for non-audit services rendered which were
not listed above.
Audit Committee Pre-Approval Policies and Procedures
Our audit committee reviews and pre-approves the scope and the cost of audit services related to us and permissible non-audit
services performed by the independent auditors, other than those for de minimis services which are approved by the audit
committee prior to the completion of the audit. All of the services related to our company provided by Deloitte LLP listed above
have been pre-approved by the audit committee.
ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
Not applicable.
ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
Not applicable.
ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT
Not applicable.
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ITEM 16G. CORPORATE GOVERNANCE
The listing rules of the NYSE (the “NYSE Listing Rules”), include certain accommodations in the corporate governance
requirements that allow foreign private issuers, such as us, to follow “home country” corporate governance practices in lieu of
the otherwise applicable corporate governance standards of the NYSE. The application of such exceptions requires that we
disclose any significant ways that our corporate governance practices differ from the NYSE Listing Rules that we do not follow.
We are currently a “controlled company” as defined in the NYSE Listing Rules. Upon ceasing to be a “controlled company”, as a
foreign private issuer, we intend to continue to follow Canadian corporate governance practices and TSX rules in lieu of the
corporate governance requirements of the NYSE in respect of the following:
•
•
•
•
•
the requirement under Section 303A.01 of the NYSE Listing Rules that a majority of the board be comprised of
independent directors;
the requirement under Section 303A.04 of the NYSE Listing Rules that director nominees be selected or
recommended for selection by a nominations committee comprised solely of independent directors and to post the
charter for that committee on our investor website;
the requirement under Section 303A.05 of the NYSE Listing Rules to have a compensation committee that is
comprised solely of independent directors and to post the charter for that committee on our investor website;
the requirement under Section 303A.08 of the NYSE Listing Rules that shareholders be given the opportunity to vote
on all equity-compensation plans and material revisions thereto; and
the requirement under Section 303A.09 of the NYSE Listing Rules to have a set of corporate governance guidelines
and to disclose such guidelines on our investor website.
The NYSE Listing Rules generally require that a listed company’s articles provide for a quorum for any meeting of the holders of
the company’s voting shares that is sufficiently high to ensure a representative vote. Pursuant to the NYSE Listing Rules, the
company, as a foreign private issuer, has elected to comply with practices that are permitted under Canadian securities laws in
lieu of the provisions of NYSE. The company’s articles provide that a quorum of shareholders shall be shareholders present in
person or represented by proxy who, together, hold not less than 25% of the issued shares plus at least a majority of multiple
voting shares entitled to be voted at the meeting. We may in the future decide to use other foreign private issuer exemptions
with respect to some of the other NYSE Listing Rules. Following the company’s home country governance practices, as
opposed to the requirements that would otherwise apply to a company listed on the NYSE, may provide less protection than is
accorded to investors under the NYSE Listing Rules applicable to U.S. domestic issuers.
ITEM 16H. MINE SAFETY DISCLOSURE
Not applicable.
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ITEM 16I. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
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PART III
ITEM 17. FINANCIAL STATEMENTS.
See Item 18. — “Financial Statements”.
ITEM 18. FINANCIAL STATEMENTS.
Our Annual Financial Statements are included at the end of this Annual Report.
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ITEM 19. EXHIBITS
EXHIBIT INDEX
1.1
2.1
2.2
4.1
4.2
4.3
4.4
4.5
4.6
4.7
4.8
4.9
4.10
Articles of Canada Goose Holdings Inc. (incorporated by reference to Exhibit 1.1 to our Annual Report on Form
20-F (file no. 001-38027) filed with the SEC on June 6, 2017)
Form of Share Certificate for Subordinate Voting Shares (incorporated by reference to Exhibit 4.1 to our
Registration Statement on Form F-1 (file no. 333-216078) filed with the SEC on March 1, 2017)
Description of Securities (incorporated by reference to Exhibit 2.2 to our Annual Report on Form 20-F (file no.
001-38027) filed with the SEC on May 13, 2021)
Investor Rights Agreement by and among Canada Goose Holdings Inc. and certain shareholders of Canada
Goose Holdings Inc. (incorporated by reference to Exhibit 10.1 to our Registration Statement on Form F-1 (file
no. 333-216078) filed with the SEC on March 10, 2017)
Coattail Agreement, between Canada Goose Holdings Inc., certain shareholders of Canada Goose Holdings Inc.
and Computershare Trust Company of Canada (incorporated by reference to Exhibit 4.2 to our Annual Report on
Form 20-F (file no. 001-38027) filed with the SEC on June 6, 2017)
Credit Agreement dated December 2, 2016, by and among Canada Goose Holdings Inc., Canada Goose Inc.
and Credit Suisse AG, Cayman Islands Branch (incorporated by reference to Exhibit 10.4 to our Registration
Statement on Form F-1 (file no. 333-216078) filed with the SEC on February 15, 2017)
First Amendment to Credit Agreement dated August 15, 2017, by and among Canada Goose Holdings Inc.,
Canada Goose Inc. and Credit Suisse AG, Cayman Islands Branch (incorporated by reference to Exhibit 99.1 to
our Form 6-K (file no. 001-38027) filed with the SEC on August 21, 2017)
Third Amendment to Credit Agreement dated May 10, 2019, by and among Canada Goose Holdings, Inc. and
Credit Suisse AG, Cayman Islands Branch (incorporated by reference to Exhibit 99.1 to our Form 6-K (file no.
001-38027) filed with the SEC on May 14, 2019)
Second Amended and Restated Credit Agreement dated May 26, 2020, by and among Canada Goose Holdings
Inc. and Canadian Imperial Bank of Commerce (incorporated by reference to Exhibit 99.1 to our Form 6-K (file
no. 001-38027) filed with the SEC on May 29, 2020)
Refinancing Amendment and Fourth Amendment to Credit Agreement dated October 7, 2020, by and among
Canada Goose Holdings Inc. and Credit Suisse AG, Cayman Islands Branch (incorporated by reference to
Exhibit 99.1 to our Form 6-K (file no. 001-3827) filed with the SEC on October 9, 2020)
Fifth Amendment to Credit Agreement dated April 9, 2021, by and among Canada Goose Holdings Inc. and
Credit Suisse AG, Cayman Islands Branch (incorporated by reference to Exhibit 4.8 to our Annual Report on
Form 20-F (file no. 001-38027) filed with the SEC on May 13, 2021).
Lease Agreement dated February 3, 2012, by and between 250 Bowie Holdings Inc., as Landlord and Canada
Goose Inc., as Tenant (incorporated by reference to Exhibit 10.10 to our Registration Statement on Form F-1 (file
no. 333-216078) filed with the SEC on February 15, 2017)
First Lease Expansion and Amending Agreement dated July 1, 2013, by and between 250 Bowie Holdings Inc.,
as Landlord and Canada Goose Inc., as Tenant (incorporated by reference to Exhibit 10.11 to our Registration
Statement on Form F-1 (file no. 333-216078) filed with the SEC on February 15, 2017)
-131-
4.11
4.12
4.13
4.14
4.15
4.16
4.17
4.18
4.19
4.20
8.1
12.1
12.2
13.1
13.2
15.1
Second Lease Expansion and Amending Agreement dated January 27, 2014, by and between 250 Bowie
Holdings Inc., as Landlord and Canada Goose Inc., as Tenant (incorporated by reference to Exhibit 10.12 to our
Registration Statement on Form F-1 (file no. 333-216078) filed with the SEC on February 15, 2017)
Third Lease Expansion and Amending Agreement dated November 14, 2014, by and between 250 Bowie
Holdings Inc., as Landlord and Canada Goose Inc., as Tenant (incorporated by reference to Exhibit 10.13 to our
Registration Statement on Form F-1 (file no. 333-216078) filed with the SEC on February 15, 2017)
Fourth Lease Expansion and amending Agreement dated April 30, 2015, by and between 250 Bowie Holdings
Inc., as Landlord and Canada Goose Inc., as Tenant (incorporated by reference to Exhibit 10.14 to our
Registration Statement on Form F-1 (file no. 333-216078) filed with the SEC on February 15, 2017)
Fifth Lease Expansion and Amending Agreement dated June 8, 2016, by and between 250 Bowie Holdings Inc.,
as Landlord and Canada Goose Inc., as Tenant (incorporated by reference to Exhibit 10.15 to our Registration
Statement on Form F-1 (file no. 333-216078) filed with the SEC on February 15, 2017)
Canada Goose Holdings Inc. Amended and Restated Stock Option Plan (incorporated by reference to Exhibit
4.17 to our Annual Report on Form 20-F (file no. 001-38027) filed with the SEC on June 6, 2017)
Canada Goose Holdings Inc. Omnibus Incentive Plan (incorporated by reference to Exhibit 4.16 to our Annual
Report on Form 20-F (file no. 001-38027) filed with the SEC on May 13, 2021)
Form of Option Agreement under the Omnibus Incentive Plan (incorporated by reference to Exhibit 10.19 to our
Registration Statement on Form F-1 (file no. 333-216078) filed with the SEC on March 1, 2017)
Board Director’s Agreement dated September 17, 2015, by and between Canada Goose International AG and
Daniel Reiss (incorporated by reference to Exhibit 10.21 to our Registration Statement on Form F-1 (file no. 333-
216078) filed with the SEC on February 15, 2017)
Canada Goose Holdings Inc. Employee Share Purchase Plan (incorporated by reference to Exhibit 4.28 to our
Annual Report on Form 20-F (file no. 001-38027) filed with the SEC on June 6, 2017)
Form of Indemnification Agreement for Directors and Officers (incorporated by reference to Exhibit 10.28 to our
Registration statement on Form F-1 (file no. 333-216078) filed with the SEC on February 15, 2017)
Subsidiaries of Canada Goose Holdings Inc.
Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer.
Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer.
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002.
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002.
Consent of Deloitte LLP
-132-
The registrant hereby certifies that it meets all of the requirements for filing on annual report on Form 20-F and that it has duly
caused and authorized the undersigned to sign this annual report on its behalf.
SIGNATURES
Canada Goose Holdings Inc.
By:
Name:
Title:
/s/ Jonathan Sinclair
Jonathan Sinclair
Executive Vice President and Chief Financial
Officer
Date: May 19, 2022
-133-
Canada Goose Holdings Inc.
Annual Consolidated Financial Statements
April 3, 2022
F-1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the shareholders and the Board of Directors of Canada Goose Holdings Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated statements of financial position of Canada Goose Holdings Inc. and
subsidiaries (the "Company") as of April 3, 2022, March 28, 2021, and March 30, 2020, the related consolidated
statements of income and comprehensive income, changes in equity, and cash flows for the 53-week period ended
April 3, 2022 and for the 52- week periods ended March 28, 2021, and March 29, 2020 and the related notes and the
schedule of Condensed Financial Information of Canada Goose Holdings Inc. (collectively referred to as the "financial
statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of
the Company as of April 3, 2022, March 28, 2021, and March 30, 2020 and its financial performance and its cash
flows for each of the 53-week period ended April 3, 2022 and for the 52-week periods ended March 28, 2021, and
March 29, 2020, in accordance with International Financial Reporting Standards as issued by the International
Accounting Standards Board.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States) (PCAOB), the Company's internal control over financial reporting as of April 3, 2022, based on criteria
established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations
of the Treadway Commission and our report dated May 18, 2022, expressed an unqualified opinion on the
Company's internal control over financial reporting.
Change in Accounting Principle
As discussed in Note 4 to the financial statements, effective April 1, 2019, the Company changed its method of
accounting for implementation costs in its Software as a Service arrangements resulting from the adoption of the April
2021 International Financial Reporting Interpretations Committee (IFRIC) agenda decision, Configuration or
Customization Costs in a Cloud Computing Arrangement.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an
opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with
the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal
securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the
PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of
material misstatement of the financial statements, whether due to error or fraud, and performing procedures that
respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and
disclosures in the
F-2
financial statements. Our audits also included evaluating the accounting principles used and significant estimates
made by management, as well as evaluating the overall presentation of the financial statements. We believe that our
audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current-period audit of the financial
statements that was communicated or required to be communicated to the audit committee and that (1) relates to
accounts or disclosures that are material to the financial statements and (2) involved our especially challenging,
subjective, or complex judgements. The communication of critical audit matters does not alter in any way our opinion
on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below,
providing a separate opinion on the critical audit matter or on accounts or disclosures to which it relates.
Inventory Obsolescence – Refer to Notes 2j, 3 and 9 to the financial statements
Critical Audit Matter Description
Inventory comprises raw materials, work-in-process and finished goods and is carried at the lower of cost and net
realizable value. In estimating net realizable value, the Company uses estimates related to fluctuations in inventory
levels, planned production, customer behaviour, obsolescence, future selling prices, seasonality and costs necessary
to sell the inventory. As a result of management’s analysis, included in inventory are provisions for obsolete inventory.
Given the importance of inventory to the Company’s operations and the judgement involved in determining net
realizable value related to finished goods inventory, specifically estimated future revenue (future selling prices and
product demand); our audit procedures involved a high degree of auditor judgement and an increased extent of audit
effort.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to the future revenue used in determining net realizable value related to finished good
inventory included the following, among others:
• Evaluated the effectiveness of controls, including those related to management’s process for developing the
estimates used in the determination of net realizable value and the provisions for obsolete inventory.
• Analyzed inventory levels and revenue to evaluate the completeness of management’s identified population of
inventory with obsolescence exposure.
• Performed a retrospective review on the prior year estimated future revenue and compared it to current year
activity to evaluate management's ability to accurately estimate the net realizable value.
• Evaluated the reasonableness of future selling prices and product demand by:
◦ Comparing future selling price assumptions to historical trends and recent transactions.
F-3
◦ Assessing management’s merchandising strategy to evaluate the reasonableness of management’s
assumptions relating to the expected impact on overall product demand.
◦ Considering industry trends and evidence obtained in other areas of the audit.
/s/ Deloitte LLP
Chartered Professional Accountants
Licensed Public Accountants
Toronto, Canada
May 18, 2022
We have served as the Company's auditor since fiscal 2010.
F-4
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the shareholders and the Board of Directors of Canada Goose Holdings Inc.
Opinion on Internal Control over Financial Reporting
We have audited the internal control over financial reporting of Canada Goose Holdings Inc. and subsidiaries (the
“Company”) as of April 3, 2022, based on criteria established in Internal Control — Integrated Framework (2013)
issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the
Company maintained, in all material respects, effective internal control over financial reporting as of April 3, 2022,
based on criteria established in Internal Control-Integrated Framework (2013) issued by COSO.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States) (PCAOB), the consolidated financial statements as of and for the 53-week period ended April 3, 2022, of the
Company and our report dated May 18, 2022, expressed an unqualified opinion on those financial statements and
included an explanatory paragraph regarding the Company’s adoption of the April 2021 International Financial
Reporting Interpretations Committee (IFRIC) agenda decision, Configuration or Customization Costs in a Cloud
Computing Arrangement.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for
its assessment of the effectiveness of internal control over financial reporting, included in the accompanying
Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion
on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm
registered with the PCAOB and are required to be independent with respect to the Company in accordance with the
U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and
the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was
maintained in all material respects. Our audit included obtaining an understanding of internal control over financial
reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating
effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered
necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. A company’s internal control over financial reporting
includes those policies and procedures that (1) pertain to the maintenance of records that, in
F-5
reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2)
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the
company are being made only in accordance with authorizations of management and directors of the company; and
(3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or
disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may
deteriorate.
/s/ Deloitte LLP
Chartered Professional Accountants
Licensed Public Accountants
Toronto, Canada
May 18, 2022
F-6
Consolidated Statements of Income and Comprehensive Income
(in millions of Canadian dollars, except per share amounts)
Revenue
Cost of sales
Gross profit
Selling, general & administrative expenses
Operating income
Net interest, finance and other costs
Income before income taxes
Income tax expense
Net income
Other comprehensive (loss) income
Items that will not be reclassified to earnings, net of tax:
Actuarial gain (loss) on post-employment obligation
Items that may be reclassified to earnings, net of tax:
Cumulative translation adjustment (loss) gain
Net gain (loss) on derivatives designated as cash flow
hedges
Reclassification of net loss (gain) on cash flow hedges to
income
Net gain (loss) on derivatives designated as a net
investment hedge
Other comprehensive (loss) income
Comprehensive income
Earnings per share
Basic
Diluted
Notes
5
9
4, 10, 11, 12
16
6
21
21
21
7
April 3,
2022
$
1,098.4
364.8
733.6
576.9
156.7
39.0
117.7
23.1
94.6
March 28,
2021
Restated (Note
4)
$
903.7
349.7
554.0
437.0
117.0
30.9
86.1
15.8
70.3
Year ended
March 29,
2020
Restated (Note
4)
$
958.1
364.8
593.3
406.2
187.1
28.4
158.7
10.7
148.0
0.1
0.7
(25.5)
(12.3)
8.7
4.7
—
(12.0)
82.6
(1.2)
7.3
0.2
(5.3)
65.0
$
$
0.87 $
0.87 $
0.64 $
0.63 $
(0.2)
9.1
(2.4)
(3.7)
(0.3)
2.5
150.5
1.35
1.33
The accompanying notes to the consolidated financial statements are an integral part of these financial statements.
F-7
Consolidated Statements of Financial Position
(in millions of Canadian dollars)
Assets
Current assets
Cash
Trade receivables
Inventories
Income taxes receivable
Other current assets
Total current assets
Deferred income taxes
Property, plant and equipment
Intangible assets
Right-of-use assets
Goodwill
Other long-term assets
Total assets
Liabilities
Current liabilities
Accounts payable and accrued liabilities
Provisions
Income taxes payable
Short-term borrowings
Current portion of lease liabilities
Total current liabilities
Provisions
Deferred income taxes
Revolving facility
Term loan
Lease liabilities
Other long-term liabilities
Total liabilities
Shareholders' equity
Total liabilities and shareholders' equity
Notes
8
9
6
20
6
10
4, 11
12
13
20
14, 20
15
6
16
12
15
6
16
16
12
17
April 3,
2022
$
287.7
42.7
393.3
1.1
37.5
762.3
53.2
114.2
122.2
215.2
53.1
20.4
1,340.6
176.2
18.5
24.5
3.8
58.5
281.5
31.3
15.8
—
366.2
192.2
25.7
912.7
427.9
1,340.6
March 28,
2021
March 30,
2020
Restated (Note 4) Restated (Note 4)
$
$
477.9
40.9
342.3
4.8
31.0
896.9
48.4
116.5
124.8
233.7
53.1
5.1
1,478.5
177.8
20.0
19.1
—
45.2
262.1
25.6
15.4
—
367.8
209.6
20.4
900.9
577.6
1,478.5
31.7
32.3
412.3
12.0
43.5
531.8
41.8
115.1
131.1
211.8
53.1
6.0
1,090.7
144.4
15.6
13.0
—
35.9
208.9
21.4
8.4
—
158.1
192.0
4.6
593.4
497.3
1,090.7
The accompanying notes to the consolidated financial statements are an integral part of these financial statements.
F-8
Consolidated Statements of Changes in Equity
(in millions of Canadian dollars)
Share capital
Contributed
surplus
Retained
earnings
Accumulated other
comprehensive (loss)
income
Balance at March 31, 2019
Adjustment for IFRIC Agenda
Decision
Balance at April 1, 2019
IFRS 16 initial application
Normal course issuer bid purchase
of subordinate voting shares
Exercise of stock options
Net income
Other comprehensive income
Share-based payment
Balance at March 29, 2020
Exercise of stock options
Net income
Other comprehensive loss
Share-based payment
Balance at March 28, 2021
Normal course issuer bid purchase
of subordinate voting shares
Exercise of stock options
Net income
Other comprehensive loss
Share-based payment
Deferred tax on share-based
payment
Balance at April 3, 2022
Notes
Multiple
voting
shares
$
1.4
4
12
17
17
18
17
18
17
17
18
—
1.4
—
—
—
—
—
—
1.4
—
—
—
—
1.4
—
—
—
—
—
—
1.4
Subordinate
voting shares
$
111.2
—
111.2
—
(1.6)
3.7
—
—
—
113.3
5.8
—
—
—
119.1
(11.9)
9.9
—
—
—
—
117.1
Total
$
112.6
—
112.6
—
(1.6)
3.7
—
—
—
114.7
5.8
—
—
—
120.5
(11.9)
9.9
—
—
—
—
118.5
Restated
(Note 4)
$
279.7
(18.9)
260.8
(4.9)
(37.1)
—
148.0
—
—
366.8
—
70.3
—
—
437.1
(241.3)
—
94.6
—
—
—
290.4
$
9.2
—
9.2
—
—
(1.3)
—
—
7.8
15.7
(1.8)
—
—
11.3
25.2
—
(2.8)
—
—
14.0
(0.2)
36.2
$
(2.4)
—
(2.4)
—
—
—
—
2.5
—
0.1
—
—
(5.3)
—
(5.2)
—
—
—
(12.0)
—
—
(17.2)
The accompanying notes to the consolidated financial statements are an integral part of these financial statements.
Total
$
399.1
(18.9)
380.2
(4.9)
(38.7)
2.4
148.0
2.5
7.8
497.3
4.0
70.3
(5.3)
11.3
577.6
(253.2)
7.1
94.6
(12.0)
14.0
(0.2)
427.9
F-9
Consolidated Statements of Cash Flows
(in millions of Canadian dollars)
Notes
4, 10, 11, 12
6
16
16
1, 10, 12
18
22
10
11
12
16
16
16
17
12
20
18
Operating activities
Net income
Items not affecting cash:
Depreciation and amortization
Income tax expense
Interest expense
Foreign exchange loss (gain)
Acceleration of unamortized costs on debt extinguishment
Impairment losses
Loss on disposal of assets
Share-based payment
Changes in non-cash operating items
Income taxes paid
Interest paid
Net cash from operating activities
Investing activities
Purchase of property, plant and equipment
Investment in intangible assets
Initial direct costs of right-of-use assets
Net cash used in investing activities
Financing activities
Term loan (repayments) borrowings
Revolving facility borrowings
Transaction costs on financing activities
Subordinate voting shares purchased and cancelled under NCIB
Principal payments on lease liabilities
Settlement of term loan derivative contracts
Exercise of stock options
Net cash (used in) from financing activities
Effects of foreign currency exchange rate changes on cash
(Decrease) increase in cash
Cash, beginning of period
Cash, end of period
April 3,
2022
$
94.6
95.8
23.1
38.1
9.0
9.5
7.7
0.1
14.0
291.9
(82.8)
(25.2)
(32.3)
151.6
(34.5)
(1.5)
(1.2)
(37.2)
(4.7)
0.5
(1.0)
(253.2)
(46.9)
—
7.1
(298.2)
(6.4)
(190.2)
477.9
287.7
March 28,
2021
Restated (Note
4)
$
Year ended
March 29,
2020
Restated (Note
4)
$
70.3
77.4
15.8
26.7
9.0
1.1
—
0.3
11.3
211.9
104.5
(6.8)
(21.0)
288.6
(26.9)
—
—
(26.9)
247.5
—
(10.8)
—
(38.8)
(4.9)
4.0
197.0
(12.5)
446.2
31.7
477.9
148.0
57.1
10.7
20.4
(0.7)
7.0
—
1.7
8.5
252.7
(130.6)
(52.1)
(18.5)
51.5
(45.3)
(6.0)
—
(51.3)
—
—
(2.3)
(38.7)
(24.7)
4.6
2.4
(58.7)
1.6
(56.9)
88.6
31.7
The accompanying notes to the consolidated financial statements are an integral part of these financial statements.
F-10
Notes to the Consolidated Financial Statements
April 3, 2022
(in millions of Canadian dollars, except share and per share data)
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, fleece, knitwear, footwear, and accessories for 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”, “us” and
“our” throughout these notes to the consolidated 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 Chairman and Chief Executive Officer of the
Company. The principal shareholders hold multiple voting shares representing 48.5% of the total shares outstanding as at
April 3, 2022, or 90.4% of the combined voting power of the total voting shares outstanding. Subordinate voting shares that
trade on public markets represent 51.5% of the total shares outstanding as at April 3, 2022, or 9.6% of the combined voting
power of the total voting shares outstanding.
Statement of compliance
The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards
(“IFRS”) as issued by the International Accounting Standards Board (“IASB”).
These consolidated financial statements were authorized for issuance by the Company’s Board of Directors on May 18, 2022.
Fiscal year
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 for a 52-week fiscal year. 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.
Operating segments
The Company classifies its business in three operating and reportable segments: Direct-to-Consumer (“DTC”), Wholesale, and
Other. The DTC segment comprises sales through country-specific e-Commerce platforms and our Company-owned 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 segments, such as sales to
employees and selling, general, and administrative (“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
F-11
Notes to the Consolidated Financial Statements
April 3, 2022
(in millions of Canadian dollars, except share and per share data)
corporate costs, and foreign exchange gains and losses not specifically associated with DTC or Wholesale segment operations.
Within the Other segment, comparative information for fiscal 2021 also includes sales of personal protective equipment ("PPE")
in response to COVID-19 along with costs incurred as a consequence of COVID-19 including overhead costs resulting from the
temporary closure of our manufacturing facilities.
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 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.
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. Store operations have largely resumed over fiscal 2022 across our global store network, however 5 of our
41 stores continue to remain closed globally and retail store traffic remains below pre-pandemic levels as at April 3, 2022. As a
result of slower than expected return of international retail traffic and limited time remaining on existing leases, the Company
recorded $1.6m of impairment losses on fixed assets (note 10) and $6.1m of impairment losses on right-of-use assets (note 12)
in respect of two retail stores in the DTC operating segment for the year ended April 3, 2022. The impairment losses were
recorded as part of SG&A expenses. No impairment losses were recognized in the prior years. All of our manufacturing facilities
were operating during April 3, 2022 at lower output levels than historically realized prior to fiscal year 2021 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. 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 $0.6m were recognized in the statement of income for the year ended April 3, 2022
(March 28, 2021 - $4.1m).
F-11
Notes to the Consolidated Financial Statements
April 3, 2022
(in millions of Canadian dollars, except share and per share data)
Note 2. Significant accounting policies
(a) Basis of presentation
The consolidated financial statements are presented in Canadian dollars, the Company’s functional and presentation
currency.
These consolidated financial statements have been prepared on the historical cost basis except for the following items,
which are recorded at fair value:
•
•
financial instruments, including derivative financial instruments, at fair value in other comprehensive income and
through profit or loss as described in note 20, and
initial recognition of assets acquired and liabilities assumed in a business combination.
Certain comparative figures have been reclassified to conform with the current year presentation. Depreciation and
amortization for amounts not included in costs of goods sold, which were previously presented in a separate line item,
are reflected in the presentation of SG&A expenses.
(b) Principles of consolidation
The consolidated financial statements include the accounts of Canada Goose Holdings Inc. and its subsidiaries. All
intercompany transactions and balances have been eliminated.
(c) Foreign currency translation and transactions
The functional currency of each of the Company’s subsidiaries is the currency of the primary economic environment in
which each entity operates. The assets and liabilities of subsidiaries whose functional currency is not the Canadian dollar
are translated into the functional currency of the Company using the exchange rate at the reporting date. Revenues and
expenses are translated at exchange rates prevailing at the transaction date. The resulting foreign exchange translation
differences are recorded as a currency translation adjustment in other comprehensive income.
Foreign currency transactions are translated into the functional currency of each of the Company’s subsidiaries using the
exchange rates prevailing at the date of the transactions or valuation when items are remeasured. Foreign exchange
gains and losses resulting from the settlement of such transactions and from the changes at period-end exchange rates
of monetary assets and liabilities denominated in foreign currencies are recognized in the statement of income in SG&A
expenses, except when included in other comprehensive income for qualifying cash flow and net investment hedges.
Functional currency of subsidiary
Each entity within the Company determines its functional currency based on the primary economic environment in which
the entity operates. Once an entity's functional currency is determined, it is not changed unless there is a change to the
underlying transactions, events, and conditions that determine the entity's primary economic environment.
F-12
Notes to the Consolidated Financial Statements
April 3, 2022
(in millions of Canadian dollars, except share and per share data)
(d) Revenue recognition
Revenue comprises of DTC, Wholesale and Other segment revenues. Revenue is measured at the amount of
consideration to which the Company expects to be entitled in exchange for the sale of goods in the ordinary course of
the Company’s activities. Revenue is presented net of sales tax, estimated returns, sales allowances, and discounts. The
Company recognizes revenue when the Company has agreed terms with its customers, the contractual rights and
payment terms have been identified, the contract has commercial substance, it is probable that consideration will be
collected by the Company, and when control of the goods is transferred to the customer have been met.
It is the Company’s policy to sell merchandise through the DTC channel with a limited right to return, typically within 30
days. Accumulated experience is used to estimate and provide for such returns.
(e) Business combinations
Acquisitions of businesses are accounted for using the acquisition method as of the acquisition date, which is the date
when control is transferred to the Company. The consideration transferred in a business combination is measured at fair
value, calculated as the sum of the acquisition date fair values of the assets transferred, liabilities incurred by the
Company, and the equity interests issued by the Company in exchange for control of the acquiree. Transaction costs that
the Company incurs in connection with a business combination are recognized in the statement of income as incurred.
Goodwill is measured as the excess of the sum of the fair value of the consideration transferred over the net of the
acquisition date amounts of the identifiable assets acquired and the liabilities assumed.
When the consideration transferred in a business combination includes contingent consideration, the contingent
consideration is measured at its acquisition date fair value. Contingent consideration is remeasured at subsequent
reporting dates at its fair value, and the resulting gain or loss recognized in the statement of income.
(f) Earnings per share
Basic earnings per share is calculated by dividing net income attributable to ordinary equity holders by the weighted
average number of multiple and subordinate voting shares outstanding during the year.
Diluted earnings per share is calculated by dividing net income attributable to ordinary equity holders of the Company by
the weighted average number of multiple and subordinate voting shares outstanding during the year plus the weighted
average number of subordinate shares that would be issued on the exercise of stock options and settlement of restricted
share units (“RSUs”).
(g) Income taxes
Current and deferred income taxes are recognized in the statement of income, except when it relates to a business
combination, or items recognized in equity or in other comprehensive income.
F-13
Notes to the Consolidated Financial Statements
April 3, 2022
(in millions of Canadian dollars, except share and per share data)
Current income tax
Current income tax is the expected income tax payable or receivable on the taxable income or loss for the period, using
tax rates enacted or substantively enacted at the reporting date, and any adjustment to income tax payable in respect of
previous years.
Deferred income tax
Deferred income tax is provided using the liability method for temporary differences at the reporting date between the
income tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.
Deferred income tax is measured using enacted or substantively enacted income tax rates expected to apply in the years
in which those temporary differences are expected to be recovered or settled. A deferred tax asset is recognized for
unused income tax losses and credits to the extent that it is probable that future taxable income will be available against
which they can be utilized.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no
longer probable that sufficient taxable income will be available to allow all or part of the deferred tax asset to be utilized.
Unrecognized deferred tax assets are reassessed at each reporting date and are recognized to the extent that it has
become probable that future taxable income will allow the deferred tax asset to be recovered.
Deferred income tax relating to items recognized outside profit or loss is recognized outside profit or loss. Deferred tax
items are recognized in correlation to the underlying transaction either in other comprehensive income or directly in
equity.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current income tax
assets against current income tax liabilities and the deferred tax relates to the same taxable entity and the same taxation
authority.
Deferred income tax is provided on temporary differences arising on investments in subsidiaries, except where the timing
of the reversal of the temporary difference is controlled by the Company and it is probable that the temporary difference
will not reverse in the foreseeable future.
(h) Cash
Cash consists of cash and cash equivalents, including cash on hand, deposits in banks, and short-term deposits with
maturities of less than three months. The Company uses the indirect method of reporting cash flows from operating
activities.
(i) Trade receivables
Trade receivables, including credit card receivables, consist of amounts owing on product sales where we have extended
credit to customers, and are initially recognized at fair value and subsequently measured at amortized cost using the
effective interest method, less expected credit loss and sales allowances. The allowance for expected credit losses is
recorded against trade receivables and is based on historical experience.
F-14
Notes to the Consolidated Financial Statements
April 3, 2022
(in millions of Canadian dollars, except share and per share data)
(j)
Inventories
Raw materials, work-in-process, and finished goods are valued at the lower of cost and net realizable value. Cost is
determined using the weighted average cost method. The cost of work-in-process and finished goods inventories include
the cost of raw materials and an applicable share of the cost of labour and fixed and variable production overhead costs,
including the depreciation of property, plant and equipment used in the production of finished goods and design costs,
and other costs incurred to bring the inventories to their present location and condition.
The Company estimates net realizable value as the amount at which inventories are expected to be sold, taking into
consideration fluctuations in selling prices due to seasonality, less estimated costs necessary to complete the sale.
Inventories are written down to net realizable value when the cost of inventories is estimated to be unrecoverable due to
obsolescence, damage, or declining selling prices. Inventory is adjusted to reflect estimated loss (“shrinkage”) incurred
since the last inventory count. Shrinkage is based on historical experience. When circumstances that previously caused
inventories to be written down below cost no longer exist or when there is clear evidence of an increase in realizable
value, the amount of the write-down previously recorded is reversed.
Storage costs, indirect administrative overhead and certain selling costs related to inventories are expensed in the period
that these costs are incurred.
(k) Property, plant and equipment
Property, plant and equipment is stated at cost, net of accumulated depreciation and any accumulated impairment
losses. Cost includes expenditures that are directly attributable to the acquisition of the asset, including costs incurred to
prepare the asset for its intended use and capitalized borrowing costs, when the recognition criteria are met. The
commencement date for capitalization of costs occurs when the Company first incurs expenditures for the qualifying
assets and undertakes the required activities to prepare the assets for their intended use.
Property, plant and equipment assets are depreciated on a straight-line basis over their estimated useful lives when the
assets are available for use. When significant parts of a fixed asset have different useful lives, they are accounted for as
separate components and depreciated separately. Depreciation methods and useful lives are reviewed annually and are
adjusted for prospectively, if appropriate. Estimated useful lives are as follows:
Asset Category
Plant equipment (except moulds)
Footwear moulds
Computer equipment
Leasehold improvements
Show displays
Furniture and fixtures
Estimated Useful Life
10 years
5 years
3 years
Lesser of the lease term or useful life of the asset
5 years
5 to 10 years
F-15
Notes to the Consolidated Financial Statements
April 3, 2022
(in millions of Canadian dollars, except share and per share data)
An item of property, plant and equipment and any significant part initially recognized is derecognized upon disposal or
when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the
asset, calculated as the difference between the net disposal proceeds and the carrying amount of the asset, is included
in the statement of income when the asset is derecognized.
The cost of repairs and maintenance of property, plant and equipment is expensed as incurred and recognized in the
statement of income.
Property, plant and equipment are reviewed at the end of each reporting period to determine whether there is any
indication of impairment. If any such indication exists, the asset is then tested for impairment by comparing its
recoverable amount to its carrying value. Any resulting impairment loss is recorded in the statement of income.
(l)
Intangible assets
Intangible assets acquired separately are measured on initial recognition at cost. The cost of an intangible asset
acquired in a business combination is its fair value as at the date of acquisition. Following initial recognition, intangible
assets with finite lives are carried at cost less any accumulated amortization and any accumulated impairment losses.
An internally generated intangible asset is recorded for product development costs which are included within intellectual
property. Product development costs are incurred in the design, production and testing of new products where the
technical feasibility of commercial manufacturing and sale of the product has been demonstrated. With continued
emphasis on DTC expansion, effective the first quarter of fiscal 2021, any new or incremental product development costs
were recognized in SG&A expenses in the statement of income as they more closely support current selling and
marketing activities. Those product development costs included in existing inventory and intangible assets will continue
to be recognized within the cost of sales. As at April 3, 2022, all product development costs have been fully amortized.
The useful lives of intangible assets are assessed as either finite or indefinite.
Asset Category
Brand name
Domain name
Software
Intellectual property
Estimated Useful Life
Indefinite
Indefinite
5 to 7 years
1 to 8 years
Intangible assets with indefinite useful lives comprise of the Canada Goose and Baffin brand names and domain name,
which were acquired as part of an acquisition and were recorded at their estimated fair value. The brand names and
domain name are considered to have an indefinite life based on a history of revenue and cash flow performance, and the
intent and ability of the Company to support the brand with spending to maintain its value for the foreseeable future. The
brand names and domain name are tested at least annually for impairment, at the cash-generating unit (“CGU”) level.
The assessment of indefinite life is reviewed annually to determine whether the indefinite life assessment continues to be
supportable. If not, the change in the useful life assessment from indefinite to finite is made on a prospective basis.
F-16
Notes to the Consolidated Financial Statements
April 3, 2022
(in millions of Canadian dollars, except share and per share data)
Intangible assets with finite lives are amortized over the useful economic life on a straight-line basis. The amortization
period and the amortization method for an intangible asset with a finite useful life are reviewed at least at the end of each
reporting period. Changes in the expected useful life or the expected pattern of consumption of future economic benefits
embodied in the asset are considered to modify the amortization period or method, as appropriate, and treated as
changes in accounting estimates. The amortization expense on intangible assets with finite lives is recognized in the
statement of income over the asset’s estimated useful life.
An intangible asset is derecognized on disposal or when no future economic benefits are expected from its use. Gains or
losses arising from the derecognition of an intangible asset are measured as the difference between the net disposal
proceeds and the carrying amount of the asset and are included in the statement of income when the asset is
derecognized.
Intangible assets are reviewed at the end of each reporting period to determine whether there is any indication of
impairment. If any such indication exists, the asset is then tested for impairment by comparing its recoverable amount to
its carrying value. Any resulting impairment loss is recorded in the statement of income.
(m)Leases
The Company recognizes a right-of-use asset and a lease liability based on the present value of the future lease
payments at the commencement date. The commencement date is when the lessor makes the leased asset available for
use by the Company, typically the possession date. The discount rate used in the present value calculation for lease
payments is the incremental borrowing rate for each leased asset or portfolio of leased assets with similar characteristics
by reference to the Company’s creditworthiness, the security, term and value of the underlying leased asset, and the
economic environment in which the leased asset operates. The lease term is determined as the non-cancellable periods
of a lease, together with periods covered by a renewal option if the Company is reasonably certain to exercise that option
and a termination option if the Company is reasonably certain not to exercise that option.
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.
Lease liabilities
Lease liabilities are measured at the present value of future lease payments, discounted using the Company’s
incremental borrowing rates, and include the fixed payments, variable lease payments that depend on an index or a rate,
less any lease incentives receivable. Subsequent to initial measurement, the Company measures lease liabilities at
amortized cost using the effective interest rate method. Lease liabilities are remeasured when there are changes to the
lease payments, lease term, assessment of an option to purchase the underlying asset, expected residual value
guarantee, or future lease payments due to a change in the index or rate tied to the payment.
Right-of-use assets
Right-of-use assets are measured at the initial amount of the lease liabilities, lease payments made at or before the
commencement date less any lease incentives
F-17
Notes to the Consolidated Financial Statements
April 3, 2022
(in millions of Canadian dollars, except share and per share data)
received, initial direct costs, if any, and decommissioning costs to restore the site to the condition required by the terms
and conditions of the lease, and net of accumulated impairment losses. Subsequent to initial measurement, the
Company applies the cost model to the right-of-use assets and measures the asset at cost less any accumulated
depreciation, accumulated impairment losses in accordance with IAS 36, and any remeasurements of the lease
liabilities. Assets are depreciated from the commencement date on a straight-line basis over the earlier of the end of the
assets’ useful lives or the end of the lease terms.
(n) Goodwill
Goodwill represents the difference between the purchase price of an acquired business and the Company’s share of the
net identifiable assets acquired and liabilities assumed and any contingent liabilities assumed. It is initially recorded at
cost and subsequently measured at cost less any accumulated impairment losses.
For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date,
allocated to CGUs based on the lowest level within the entity in which the goodwill is monitored for internal management
purposes. The allocation is made to the CGUs that are expected to benefit from the business combination in which the
goodwill arose. Any potential impairment of goodwill is identified by comparing the recoverable amount of a CGU to its
carrying value. An impairment loss is recognized if the carrying amount of CGU exceeds its recoverable amount. Any
loss identified is first applied to reduce the carrying amount of goodwill allocated to the CGU, and then to reduce the
carrying amounts of the remaining assets in the CGU on a pro-rata basis. The Company tests goodwill for impairment
annually at the reporting date.
The recoverable amount of a CGU is the higher of the estimated fair value less costs of disposal or value-in-use of the
CGU. In assessing value-in-use, the estimated future cash flows are discounted using a pre-tax discount rate that
reflects current market assessments of the time value of money and the risks specific to the asset.
The Company has determined that the goodwill contributes to the cash flows of ten CGUs (March 28, 2021 - seven
CGUs).
(o) Provisions
Provisions are recognized when the Company has a present obligation, legal or constructive, as a result of a past event,
it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a
reliable estimate can be made of the amount of the obligation. Where the Company expects some or all of a provision to
be reimbursed, for example under an insurance contract, the reimbursement is recognized as a separate asset but only
when the reimbursement is virtually certain. The expense relating to any provision is presented in the statement of
income net of any reimbursement. If the effect of the time value of money is material, provisions are discounted using a
current pre-tax rate that reflects, where appropriate, the risks specific to the liability. Where discounting is used, the
increase in the provision due to the passage of time is recognized in the statement of income.
The provision for warranty returns relates to the Company’s obligation for defective goods sold to customers that have
yet to be returned for exchange or repair. Accruals for
F-18
Notes to the Consolidated Financial Statements
April 3, 2022
(in millions of Canadian dollars, except share and per share data)
warranty returns are estimated on the basis of historical returns and are recorded so as to allocate them to the same
period the corresponding revenue is recognized.
(p) Employee future benefits
The Company sponsors a defined benefit pension plan membership, which is limited to certain employees of Canada
Goose International AG and other subsidiaries who reside in Switzerland.
The measurement date for the defined benefit pension plan is April 3, 2022, the reporting date. The obligation associated
with the Company’s defined benefit pension plan is actuarially valued using the projected unit credit method and
management’s best estimate of the discount rate, future salary increases, mortality rates and retirement rates. Assets
are measured at fair value. The obligation in excess of plan assets is recorded as a liability. All actuarial gains or losses,
net of tax, are recognized immediately through other comprehensive income.
(q) Fair values
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. The fair value measurement is based on the presumption that the
transaction to sell the asset or transfer the liability takes place either:
•
•
in the principal market for the asset or liability, or
in the absence of a principal market, in the most advantageous market for the asset or liability.
The Company uses valuation techniques that it believes are appropriate in the circumstances and for which sufficient
data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of
unobservable inputs. All assets and liabilities for which fair value is measured or disclosed in the financial statements are
categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the
fair value measurement as a whole:
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the
ability to access at the measurement date.
Level 2: inputs other than quoted prices included within level 1 that are observable for the asset or liability, either
directly or indirectly.
Level 3: unobservable inputs for the asset or liability. Unobservable inputs are used to measure fair value to the
extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market
activity for the asset or liability at the measurement date.
For the purpose of fair value disclosures, the Company determines classes of assets and liabilities on the basis of the
nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.
F-19
Notes to the Consolidated Financial Statements
April 3, 2022
(in millions of Canadian dollars, except share and per share data)
There was no change in the valuation techniques applied to financial instruments during all periods presented. The
following table describes the valuation techniques used in the determination of the fair values of financial instruments:
Type
Valuation Approach
Cash, trade receivables, accounts
payable and accrued liabilities
The carrying amount approximates fair value due to the short term maturity
of these instruments.
Derivatives (included in other
current assets, other long-term
assets, accounts payable and
accrued liabilities or other long-
term liabilities)
Specific valuation techniques used to value derivative financial instruments
include:
- quoted market prices or dealer quotes for similar instruments;
- observable market information as well as valuations determined by
external valuators with experience in the financial markets.
Revolving facility, term loan, and
Mainland China Facilities
The fair value is based on the present value of contractual cash flows,
discounted at the Company’s current incremental borrowing rate for similar
types of borrowing arrangements or, where applicable, market rates.
(r) Financial instruments
Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions
of the financial instrument.
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable
to the acquisition or issuance of financial assets and financial liabilities (other than financial assets and financial liabilities
classified at fair value through profit or loss) are added to, or deducted from, the fair value of the financial assets or
financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of
financial assets or financial liabilities classified at fair value through profit or loss are recognized immediately in profit or
loss.
Financial assets and financial liabilities are measured subsequently as described below.
i) Non-derivative financial assets
Non-derivative financial assets include cash and trade receivables which are measured at amortized cost. The
Company initially recognizes receivables and deposits on the date that they are originated. The Company
derecognizes a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers
the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially all the
risks and rewards of ownership of the financial asset are transferred.
ii) Non-derivative financial liabilities
Non-derivative financial liabilities include accounts payable, accrued liabilities, the revolving facility, the term loan,
and the Mainland China Facilities (as defined below). The Company initially recognizes debt instruments on the
date that they
F-20
Notes to the Consolidated Financial Statements
April 3, 2022
(in millions of Canadian dollars, except share and per share data)
are originated. All other financial liabilities are recognized initially on the trade date on which the Company
becomes a party to the contractual provisions of the instrument. Financial liabilities are recognized initially at fair
value less any directly attributable transaction costs. Subsequent to initial recognition, these financial liabilities
are measured at amortized cost using the effective interest method. The Company derecognizes a financial
liability when its contractual obligations are discharged or cancelled or expire.
iii) Derivative financial instruments
Derivatives are initially recognized at fair value on the date a derivative contract is entered into and are
subsequently remeasured to their fair value at each reporting date. The method of recognizing the resulting gain
or loss depends on whether the derivative is designated and effective as a hedging instrument. When a derivative
financial instrument, including an embedded derivative, is not designated and effective in a qualifying hedge
relationship, all changes in its fair value are recognized immediately in the statement of income; attributable
transaction costs are recognized in the statement of income as incurred. The Company does not use derivatives
for trading or speculative purposes.
Embedded derivatives are separated from a host contract and accounted for separately if the economic
characteristics and risks of the host contract and the embedded derivative are not closely related.
iv) Hedge accounting
The Company is exposed to the risk of currency fluctuations and has entered into currency derivative contracts to
hedge its exposure on the basis of planned transactions. Where hedge accounting is applied, the criteria are
documented at the inception of the hedge and updated at each reporting date. The Company documents the
relationship between hedging instruments and hedged items, as well as its risk management objectives and
strategy for undertaking the hedging transactions. The Company also documents its assessment, at hedge
inception and on an ongoing basis, of whether the derivatives that are used in hedging transactions are highly
effective in offsetting changes in cash flows of hedged items.
The fair value of a hedging derivative is classified as a current asset or liability when the maturity of the hedged
item is less than twelve months, and as a non-current asset or liability when the maturity of the hedged item is
more than twelve months.
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow
hedges is recognized, net of tax, in other comprehensive income. The gain or loss relating to the ineffective
portion is recognized immediately in the statement of income. Amounts accumulated in other comprehensive
income are transferred to the statement of income in the periods when the hedged item affects net income. When
a forecast transaction that is hedged results in the recognition of a non-financial asset or liability, such as
inventory, the amounts are included in the measurement of the cost of the related asset or liability. The deferred
amounts are ultimately recognized in the statement of income.
F-21
Notes to the Consolidated Financial Statements
April 3, 2022
(in millions of Canadian dollars, except share and per share data)
Hedges of net investments are accounted for similarly to cash flow hedges, with unrealized gains and losses
recognized, net of tax, in other comprehensive income. Amounts included in other comprehensive income are
transferred to the statement of income in the period when the foreign operation is disposed of or sold.
(s) Share-based payments
Share-based payments are valued based on the grant date fair value of these awards and the Company records
compensation expense over the corresponding service period. The fair value of the share-based payments is determined
using acceptable valuation techniques.
The Company has issued stock options to purchase subordinate voting shares and RSUs under its equity incentive
plans, prior to the public offering on March 21, 2017 (the “Legacy Plan”) and subsequently (the “Omnibus Plan”). Under
the terms of the Legacy Plan, options were granted to certain employees of the Company with vesting contingent upon
meeting the service, performance goals and exit event conditions of the Legacy Plan. There are two types of stock
options: service-vested options are time based and generally vest over five years of service, and performance-based and
exit event options vest upon attainment of performance conditions and the occurrence of an exit event. Under the terms
of the Omnibus Plan, options are granted to certain executives of the Company with vesting, generally over four years,
contingent upon meeting the service conditions of the Omnibus Plan. The compensation expense related to the options
and RSUs is recognized ratably over the requisite service period, provided it is probable that the vesting conditions will
be achieved and the occurrence of the exit event, if applicable, is probable.
Note 3. Significant accounting judgments, estimates, and assumptions
The preparation of the consolidated financial statements requires management to make estimates and judgments in applying
the Company’s accounting policies that affect the reported amounts and disclosures made in the consolidated financial
statements and accompanying notes.
Estimates and assumptions are used mainly in determining the measurement of balances recognized or disclosed in the
consolidated financial statements and are based on a set of underlying data that may include management’s historical
experience, knowledge of current events and conditions and other factors that are believed to be reasonable under the
circumstances. Management continually evaluates the estimates and judgments it uses. These estimates and judgments have
been applied in a manner consistent with prior periods and there are no known trends, commitments, events or uncertainties
that we believe will materially affect the methodology or assumptions utilized in making these estimates and judgments in these
financial statements.
The following are the accounting policies subject to judgments and key sources of estimation uncertainty that the Company
believes could have the most significant impact on the amounts recognized in the consolidated financial statements.
F-22
Notes to the Consolidated Financial Statements
April 3, 2022
(in millions of Canadian dollars, except share and per share data)
Functional currency
Judgments Made in Relation to Accounting Policies Applied: The Company assesses the relevant factors related to the primary
economic environment in which its entities operate to determine the functional currency. Where the assessment of primary
indicators is mixed, management assesses the secondary indicators, including the relationship between the foreign operations
and reporting entity.
Income and other taxes
Key Sources of Estimation: In determining the recoverable amount of deferred tax assets, the Company forecasts future taxable
income by legal entity and the period in which the income occurs to ensure that sufficient taxable income exists to utilize the
attributes. Inputs to those projections are Board-approved financial forecasts and statutory tax rates.
Judgments Made in Relation to Accounting Policies Applied: The calculation of current and deferred income taxes requires
management to make certain judgments regarding the tax rules in jurisdictions where the Company performs activities.
Application of judgments is required regarding the classification of transactions and in assessing probable outcomes of claimed
deductions including expectations about future operating results, the timing and reversal of temporary differences and possible
audits of income tax and other tax filings by the tax authorities.
Trade receivables
Key Sources of Estimation: The Company has a significant number of customers which minimizes the concentration of credit
risk. The Company does not have any customers which account for more than 10% of sales or accounts receivable. Ongoing
estimates are made relating to the ability to collect our accounts receivable and maintain an allowance for estimated credit
losses resulting from the inability of our customers to make required payments. In determining the amount of expected credit
losses, the Company considers the historical level of credit losses and makes judgments about the creditworthiness of
significant customers based on ongoing credit evaluations.
Inventories
Key Sources of Estimation: Inventories are carried at the lower of cost and net realizable value. In estimating net realizable
value, the Company uses estimates related to fluctuations in inventory levels, planned production, customer behaviour,
obsolescence, future selling prices, seasonality and costs necessary to sell the inventory. Inventory is adjusted to reflect
shrinkage incurred since the last inventory count. Shrinkage is based on historical experience.
Leases
Judgments Made in Relation to Accounting Policies Applied: The Company exercises judgment when contracts are entered into
that may give rise to a right-of-use asset that would be accounted for as a lease. Judgment is required in determining the
appropriate lease term on a lease by lease basis. The Company considers all facts and circumstances that create an economic
incentive to exercise a renewal option or to not exercise a termination option at inception and over the term of the lease,
including investments in major leaseholds, operating performance, and changed circumstances. The periods covered by
renewal or termination options are only included in the lease term if the Company is reasonably certain to exercise that
F-23
Notes to the Consolidated Financial Statements
April 3, 2022
(in millions of Canadian dollars, except share and per share data)
option. Changes in the economic environment or changes in the retail industry may impact the assessment of the lease term
and any changes in the estimate of lease terms may have a material impact on the Company’s statement of financial position.
Key Sources of Estimation: The critical assumptions and estimates used in determining the present value of future lease
payments require the Company to estimate the incremental borrowing rate specific to each leased asset or portfolio of leased
assets. Management determines the incremental borrowing rate of each leased asset or portfolio of leased assets by
incorporating the Company’s creditworthiness, the security, term, and value of the underlying leased asset, and the economic
environment in which the leased asset operates. The incremental borrowing rates are subject to change mainly due to
macroeconomic changes in the environment.
Impairment of non-financial assets (goodwill, intangible assets, property, plant & equipment, and right-of-use assets)
Judgments Made in Relation to Accounting Policies Applied: Management is required to use judgment in determining the
grouping of assets to identify their CGUs for the purposes of testing non-financial assets for impairment. Judgment is further
required to determine appropriate groupings of CGUs for the level at which goodwill and intangible assets are tested for
impairment. For the purpose of goodwill and intangible assets impairment testing, CGUs are grouped at the lowest level at
which goodwill and intangible assets are monitored for internal management purposes. Judgment is also applied in allocating
the carrying amount of assets to CGUs. In addition, judgment is used to determine whether a triggering event has occurred
requiring an impairment test to be completed. The Company has concluded that it has ten CGUs (March 28, 2021 - seven
CGUs) and tests goodwill and these intangible assets for impairment on that basis.
Key Sources of Estimation: In determining the recoverable amount of a CGU or a group of CGUs, various estimates are
employed. The Company determines value-in-use by using estimates including projected future revenues, margins, costs, and
capital investment consistent with strategic plans presented to the Board of Directors. Fair value less costs of disposal are
estimated with reference to observable market transactions. Discount rates are consistent with external industry information
reflecting the risk associated with the Company and its cash flows.
Warranty
Key Sources of Estimation: The critical assumptions and estimates used in determining the warranty provision at the statement
of financial position date are: the number of jackets expected to require repair or replacement; the proportion to be repaired
versus replaced; the period in which the warranty claim is expected to occur; the cost to repair a jacket; the cost to replace a
jacket, and the risk-free rate used to discount the provision to present value.
Financial instruments
Key Sources of Estimation: The critical assumptions and estimates used in determining the fair value of financial instruments
are: equity prices; future interest rates; the relative creditworthiness of the Company to its counterparties; estimated future cash
flows; discount rates, and volatility utilized in option valuations.
F-24
Notes to the Consolidated Financial Statements
April 3, 2022
(in millions of Canadian dollars, except share and per share data)
Share-based payments
Key Sources of Estimation: Compensation expense for share-based compensation granted is measured at the fair value at the
grant date using the Black Scholes option pricing model for the year ended April 3, 2022; prior to the public offering, the
Company used the Monte Carlo valuation model to measure the fair value of options granted. The critical assumptions used
under both of these option valuation models at the grant date are: stock price valuation; exercise price; risk-free interest rate;
expected time to exercise in years; expected dividend yield, and volatility.
Consolidation
Judgments Made in Relation to Accounting Policies Applied: The Company uses judgment in determining the entities that it
controls and therefore consolidates. The Company controls an entity when the Company has the existing rights that give it the
current ability to direct the activities that significantly affect the entity’s returns. Judgment is applied in determining whether the
Company controls the entities in which it does not have full ownership rights. Most often, judgment involves reviewing
contractual rights to determine if rights are participating (giving power over the entity) or protective rights (protecting the
Company’s interest without giving it power).
Note 4. Changes in accounting policies
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 affects 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.
Standards issued and adopted
Configuration or Customization Costs in a Cloud Computing Arrangement
In April 2021, the International Financial Reporting Interpretations Committee (“IFRIC”) finalized an agenda decision within the
scope of IAS 38, Intangible Assets which clarified the accounting of configuration and customization costs in cloud computing
arrangements often referred to as Software as a Service ("SaaS") arrangements. As a result of the decision, costs that do not
meet the capitalization criteria for intangible assets are required to be expensed as incurred.
F-25
Notes to the Consolidated Financial Statements
April 3, 2022
(in millions of Canadian dollars, except share and per share data)
The adoption of the agenda decision was recognized as a change in accounting policy in accordance with IAS 8, Accounting
Policies, Changes in Accounting Estimates and Errors. The Company amended the existing accounting policies related to
implementation costs on SaaS arrangements as at April 1, 2019. The Company assessed the impact of the interpretation and
identified $25.4m of costs recognized as intangible assets within ERP and computer software related to SaaS arrangements that
were no longer eligible for capitalization and amortization in accordance with the agenda decision. As a result, these costs were
written off as at April 1, 2019 as these costs would have been required to be expensed in the period incurred.
In accordance with IAS 8, retrospective application is required for accounting policy changes and comparative financial
information was restated in these consolidated financial statements. The following tables outline the impacts of the restatements
on the comparative periods:
Condensed Comprehensive Income Information
Increase (decrease)
March 28, 2021
March 29, 2020
As previously
reported
$
437.1
15.8
70.2
Adjustments
$
(0.1)
—
0.1
Restated
$
437.0
15.8
70.3
As previously
reported
$
401.2
12.0
151.7
Adjustments
$
5.0
(1.3)
(3.7)
Restated
$
406.2
10.7
148.0
(12.6)
0.3
(12.3)
9.4
(0.3)
9.1
SG&A expenses
Income tax expense
Net income
Cumulative translation
adjustment
Condensed Financial Position Information
Increase (decrease)
As previously
reported
$
Adjustments
$
Restated
$
As previously
reported
$
Adjustments
$
Restated
$
March 28, 2021
March 29, 2020
Deferred income taxes
(asset)
Intangible assets
Deferred income taxes
(liability)
Shareholders' equity
46.9
155.0
21.6
600.1
1.5
(30.2)
(6.2)
(22.5)
48.4
124.8
15.4
577.6
40.8
161.7
15.1
520.2
1.0
(30.6)
(6.7)
(22.9)
41.8
131.1
8.4
497.3
F-26
Notes to the Consolidated Financial Statements
April 3, 2022
(in millions of Canadian dollars, except share and per share data)
As previously
reported
$
Adjustments
$
Restated
$
April 1, 2019
Deferred income taxes
(asset)
Intangible assets
Deferred income taxes
(liability)
Shareholders' equity
12.2
155.6
16.7
399.1
1.0
(25.4)
(5.5)
(18.9)
13.2
130.2
11.2
380.2
Condensed Cash Flow Information
Increase (decrease)
March 28, 2021
March 29, 2020
As previously
reported
$
70.2
Adjustments
$
0.1
Restated
$
70.3
As previously
reported
$
151.7
Adjustments
$
(3.7)
Restated
$
148.0
84.6
15.8
102.5
(5.1)
(7.2)
—
2.0
5.1
77.4
15.8
104.5
—
63.1
12.0
(130.6)
(17.0)
(6.0)
(1.3)
—
11.0
57.1
10.7
(130.6)
(6.0)
Net income
Depreciation and
amortization
Income tax expense
Changes in non-cash
items
Investment in
intangible assets
Interest Rate Benchmark Reform
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 amendments introduce a practical
expedient for modifications required by the Interbank Offer Rate (“IBOR”) reform. The amendments relate to the modification of
financial instruments where the basis for determining the contractual cash flows changes as a result of the IBOR reform,
allowing for prospective application of the alternative rate. A similar practical expedient exists for lessee accounting under IFRS
16. It also relates to the application of hedge accounting, which is not discontinued solely because of the IBOR reform. Hedging
relationships, including formal designation and documentation, must be amended to reflect modifications to the hedged item,
however, the practical expedient allows the hedge relationship to continue, although additional ineffectiveness may be required.
The amendments are effective for annual reporting periods beginning on or after January 1, 2021. A broader market-wide
initiative is underway to transition the various IBOR based on rates in use to alternative reference rates. The Company’s term
loan
F-27
Notes to the Consolidated Financial Statements
April 3, 2022
(in millions of Canadian dollars, except share and per share data)
facility at a net book value of $370.0m, will be impacted by the IBOR reform. As such, the reformed IFRS guidance has been
adopted, however, accounting under the adopted standard will take place once IBOR related arrangements are modified, which
constitutes as an accounting event. As no accounting events have occurred to date, the Company has determined there is no
financial reporting impact as of April 3, 2022. The Company is in discussions with its lenders and is currently determining if any
modifications will meet the requirements for the application of the practical expedient.
Note 5. 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 income, which is the profit metric utilized by the
Company’s chief operating decision maker, the Chairman and Chief Executive Officer, for assessing the performance of
operating segments. Our operating segments are not reliant on any single external customer.
The Company does not report total assets or total liabilities based on its reportable operating segments.
Revenue
Cost of sales
Gross profit
SG&A expenses
Operating income (loss)
Net interest, finance and other costs
Income before income taxes
Revenue
Cost of sales
Gross profit (loss)
SG&A expenses
Operating income (loss)
Net interest, finance and other costs
Income before income taxes
Other
$
9.5
5.4
4.1
291.7
(287.6)
Year ended April 3, 2022
Total
$
1,098.4
364.8
733.6
576.9
156.7
39.0
117.7
Other
$
54.3
55.1
(0.8)
219.4
(220.2)
Year ended March 28, 2021
Total
$
903.7
349.7
554.0
437.0
117.0
30.9
86.1
Wholesale
$
348.5
182.0
166.5
55.3
111.2
Wholesale
$
322.2
169.8
152.4
48.1
104.3
DTC
$
740.4
177.4
563.0
229.9
333.1
DTC
$
527.2
124.8
402.4
169.5
232.9
F-28
Notes to the Consolidated Financial Statements
April 3, 2022
(in millions of Canadian dollars, except share and per share data)
Revenue
Cost of sales
Gross profit
SG&A expenses
Operating income (loss)
Net interest, finance and other costs
Income before income taxes
Geographic information
DTC
$
525.0
130.0
395.0
147.4
247.6
Wholesale
$
424.0
226.2
197.8
52.7
145.1
Other
$
9.1
8.6
0.5
206.1
(205.6)
Year ended March 29, 2020
Total
$
958.1
364.8
593.3
406.2
187.1
28.4
158.7
The Company determines the geographic location of revenue based on the location of its customers.
April 3,
2022
$
219.2
303.7
328.6
246.9
1,098.4
March 28,
2021
$
217.7
226.1
264.0
195.9
903.7
Year ended
March 29,
2020
$
293.1
279.0
203.6
182.4
958.1
April 3,
2022
$
35.6
(0.4)
35.2
(11.9)
—
(0.2)
(12.1)
23.1
March 28,
2021
$
18.5
2.4
20.9
Year ended
March 29,
2020
$
39.2
(0.3)
38.9
(3.3)
(0.1)
(1.7)
(5.1)
15.8
(30.7)
2.5
—
(28.2)
10.7
Canada
United States
Asia Pacific
EMEA
(1)
Revenue
(1)
EMEA comprises Europe, the Middle East, Africa, and Latin America.
Note 6. Income taxes
The components of the provision for income tax are as follows:
Current income tax expense
Current period
Adjustment in respect of prior periods
Deferred income tax (recovery) expense
Origination and reversal of temporary differences
Effect of change in income tax rates
Adjustment in respect of prior periods
Income tax expense
F-29
Notes to the Consolidated Financial Statements
April 3, 2022
(in millions of Canadian dollars, except share and per share data)
The effective income tax rates differ from the weighted average basic Canadian federal and provincial statutory income tax rates
for the following reasons:
April 3,
2022
$
117.7
25.36 %
29.8
(0.8)
2.9
(14.6)
0.2
—
0.1
6.1
(0.6)
23.1
March 28,
2021
$
86.1
25.42 %
21.9
0.1
2.2
(8.9)
0.3
—
(0.1)
—
0.3
15.8
Year ended
March 29,
2020
$
158.7
25.47 %
40.4
0.4
1.8
(11.8)
0.9
(23.1)
2.5
—
(0.4)
10.7
Income before income taxes
Income tax at expected statutory rate
Non-deductible (taxable) items
Non-deductible stock option expense
Effect of foreign tax rates
Non-deductible (taxable) foreign exchange loss
Change in tax law related to Swiss tax reform
Change in tax rates
Change in deferred tax asset not recognized
Other items
Income tax expense
F-30
Notes to the Consolidated Financial Statements
April 3, 2022
(in millions of Canadian dollars, except share and per share data)
The change in the year in the components of deferred tax assets and liabilities are as follows:
March 28,
2021 Net income
$
(0.5)
$
9.3
Foreign
exchange
translation
$
(0.2)
Change in the year affecting
Equity
$
—
Other comprehensive
income
$
—
April 3,
2022
$
8.6
Losses carried forward
Employee future
benefits
Other liabilities
Inventory capitalization
Capital lease
Tax relief from Swiss tax
reform
Unrealized profit in
inventory
Provisions and other
temporary differences
Total deferred tax
asset
Unrealized foreign
exchange
Intangible assets
Property, plant and
equipment
Total deferred tax
liabilities
Net deferred tax
assets (liabilities)
0.2
3.7
3.3
5.6
20.3
15.1
6.8
64.3
(1.3)
(18.9)
(11.1)
(31.3)
33.0
—
2.8
1.5
2.5
(7.1)
10.1
0.6
9.9
0.1
0.5
1.6
2.2
—
0.1
—
(0.1)
(1.4)
(0.2)
—
(1.8)
—
—
—
—
—
(0.2)
—
—
—
—
—
(0.2)
—
—
—
—
12.1
(1.8)
(0.2)
—
—
—
—
—
—
—
—
(5.7)
—
—
(5.7)
(5.7)
The change in deferred tax assets and liabilities as presented in the statement of financial position are as follows:
March 28,
2021
$
48.4
(15.4)
33.0
Adjustments Net income
$
$
—
—
—
6.7
5.4
12.1
Foreign
exchange
translation
$
(1.9)
0.1
(1.8)
Changes in the year affecting
Equity
$
Other comprehensive
income
$
—
(0.2)
(0.2)
—
(5.7)
(5.7)
Deferred tax
assets
Deferred tax
liabilities
F-31
0.2
6.4
4.8
8.0
11.8
25.0
7.4
72.2
(6.9)
(18.4)
(9.5)
(34.8)
37.4
April 3,
2022
$
53.2
(15.8)
37.4
Notes to the Consolidated Financial Statements
April 3, 2022
(in millions of Canadian dollars, except share and per share data)
Available deferred income tax assets related to non-capital losses and Swiss tax relief in the amount of $1.6m and $24.6m,
respectively, were not recognized as it is not probable that future taxable income will be available to the Company to utilize the
benefits.
The corporate entities within Canada Goose have the following tax-loss carry-forwards that are expected to expire in the
following years, if not utilized.
2038 and prior
2039
2040
2041
2042
2043 and thereafter
$
2.0
2.6
8.5
8.8
8.2
9.4
39.5
The Company does not recognize tax on unremitted earnings from foreign subsidiaries as it is management’s intent to reinvest
these earnings indefinitely. Unremitted earnings from foreign subsidiaries were $356.4m as at April 3, 2022 (March 28, 2021 -
$243.3m, March 29, 2020 - $214.3m).
As at April 3, 2022, in addition to the amount charged to profit or loss and other comprehensive income, a tax recovery of $nil
(March 28, 2021 - $nil, March 29, 2020 - less than $0.1m) was recognized directly in equity related to excess tax deductions on
share-based payments for stock options exercised. Tax expense of $0.2m was reversed out of equity related to reduction of
expected tax deductions on issuance of RSU.
F-32
Notes to the Consolidated Financial Statements
April 3, 2022
(in millions of Canadian dollars, except share and per share data)
Note 7. Earnings per share
The following table presents details for the calculation of basic and diluted earnings per share:
Net income
Weighted average number of multiple and subordinate voting
shares outstanding
Weighted average number of shares on exercise of stock options
and RSUs
Diluted weighted average number of multiple and subordinate
voting shares outstanding
Earnings per share
(1)
April 3,
2022
$
94.6
March 28,
2021
$
70.3
Year ended
March 29,
2020
$
148.0
108,296,802
110,261,600
109,892,031
857,919
850,573
1,276,757
109,154,721
111,112,173
111,168,788
Basic
Diluted
$
$
0.87 $
0.87 $
0.64 $
0.63 $
1.35
1.33
(1)
Applicable if dilutive and when the weighted average daily closing share price for the year was greater than the exercise
price for stock options. As at April 3, 2022, there were 1,475,545 stock options (March 28, 2021 - 914,961 shares, March 29,
2020 - 630,374 shares) that were not taken into account in the calculation of diluted earnings per share because their effect
was anti-dilutive.
Note 8. Trade receivables
Trade accounts receivable
Credit card receivables
Government grant receivable
Other receivables
Less: expected credit loss and sales allowances
Trade receivables, net
F-33
April 3,
2022
$
22.0
2.5
—
19.3
43.8
(1.1)
42.7
March 28,
2021
$
21.9
2.1
4.4
14.3
42.7
(1.8)
40.9
Balance at the beginning of the
year
Losses recognized
Amounts settled or written off
during the year
Balance at the end of the year
Note 9. Inventories
Raw materials
Work in progress
Finished goods
Notes to the Consolidated Financial Statements
April 3, 2022
(in millions of Canadian dollars, except share and per share data)
The following are the continuities of the Company’s expected credit loss and sales allowances deducted from trade receivables:
April 3, 2022
Expected credit
loss
$
Sales
allowances
$
(0.5)
—
0.2
(0.3)
(1.3)
(0.5)
1.0
(0.8)
Total
$
(1.8)
(0.5)
1.2
(1.1)
Expected credit
loss
$
March 28, 2021
Sales
allowances
$
Total
$
(0.5)
(0.1)
0.1
(0.5)
(1.3)
(2.4)
2.4
(1.3)
(1.8)
(2.5)
2.5
(1.8)
April 3,
2022
$
71.3
14.9
307.1
393.3
March 28,
2021
$
63.8
18.6
259.9
342.3
Total inventories at the lower of cost and net realizable value
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 April 3, 2022, the provisions for obsolescence amounted to $23.6m
(March 28, 2021 - $23.4m).
Amounts charged to cost of sales comprise the following:
Cost of goods manufactured
Depreciation and amortization included in costs of sales
April 3,
2022
$
350.1
14.7
364.8
March 28,
2021
$
334.9
14.8
349.7
Year ended
March 29,
2020
$
352.4
12.4
364.8
F-34
Notes to the Consolidated Financial Statements
April 3, 2022
(in millions of Canadian dollars, except share and per share data)
Note 10. Property, plant and equipment
The following table presents changes in the cost and the accumulated depreciation on the Company’s property, plant and
equipment:
Cost
March 29, 2020
Additions
Disposals
Transfers
Impact of foreign
currency translation
March 28, 2021
Additions
Disposals
Transfers
Impact of foreign
currency translation
April 3, 2022
Accumulated
depreciation
March 29, 2020
Depreciation
Disposals
Impact of foreign
currency translation
March 28, 2021
Depreciation
Disposals
Impairment losses (Note
1)
Impact of foreign
currency translation
April 3, 2022
Net book value
March 28, 2021
April 3, 2022
Plant
equipment
$
26.6
0.7
(0.2)
2.0
Computer
equipment
$
8.7
1.5
(0.1)
0.8
Leasehold
improvements
$
82.4
5.0
(1.0)
19.0
Show
displays
$
10.2
0.3
(1.0)
0.4
Furniture and
fixtures
$
25.5
2.4
(0.1)
4.0
In progress
$
8.9
20.9
—
(26.2)
—
29.1
0.1
(0.2)
1.9
—
30.9
(0.2)
10.7
1.5
(0.1)
0.8
(0.1)
12.8
(3.3)
102.1
6.2
—
18.1
(1.3)
125.1
(0.5)
9.4
—
—
0.2
(0.2)
9.4
(1.0)
30.8
2.4
(0.1)
1.9
(0.2)
34.8
(0.3)
3.3
23.5
(0.1)
(22.9)
0.3
4.1
Plant
equipment
Computer
equipment
Leasehold
improvements
Show
displays
Furniture and
fixtures
In progress
$
6.3
2.8
(0.1)
—
9.0
3.1
—
—
—
12.1
20.1
18.8
$
4.3
2.6
(0.1)
—
6.8
2.7
(0.1)
—
(0.1)
9.3
3.9
3.5
$
21.8
13.5
(0.9)
(1.2)
33.2
19.2
—
1.6
(0.1)
53.9
68.9
71.2
$
6.0
1.6
(1.0)
(0.3)
6.3
1.1
—
—
(0.1)
7.3
3.1
2.1
$
8.8
5.3
(0.1)
(0.4)
13.6
6.9
—
—
(0.2)
20.3
17.2
14.5
$
—
—
—
—
—
—
—
—
—
—
3.3
4.1
Total
$
162.3
30.8
(2.4)
—
(5.3)
185.4
33.7
(0.5)
—
(1.5)
217.1
Total
$
47.2
25.8
(2.2)
(1.9)
68.9
33.0
(0.1)
1.6
(0.5)
102.9
116.5
114.2
F-35
Notes to the Consolidated Financial Statements
April 3, 2022
(in millions of Canadian dollars, except share and per share data)
Note 11. Intangible assets
Intangible assets comprise the following:
Intangible assets with finite lives
Intangible assets with indefinite lives:
(1)
Brand name
Domain name
April 3,
2022
$
6.4
115.5
0.3
122.2
March 28,
2021
$
9.0
115.5
0.3
124.8
(1)
Retrospective application is required for accounting policy changes and comparative financial information was restated in
these consolidated financial statements (note 4).
The following table presents the changes in cost and accumulated amortization of the Company’s intangible assets with finite
lives:
Cost
March 29, 2020
Additions
Impact of foreign currency translation
March 28, 2021
Additions
April 3, 2022
Accumulated amortization
March 29, 2020
Amortization
Impact of foreign currency translation
March 28, 2021
Amortization
April 3, 2022
Net book value
March 28, 2021
April 3, 2022
Software
$
5.7
—
(0.1)
5.6
2.9
8.5
Software
$
1.3
1.0
(0.1)
2.2
1.4
3.6
3.4
4.9
Intellectual property
$
17.9
0.1
(0.1)
17.9
0.3
18.2
Intangible assets with finite lives
Total
$
23.6
0.1
(0.2)
23.5
3.2
26.7
Intellectual property
$
7.0
5.3
—
12.3
4.4
16.7
5.6
1.5
Total
$
8.3
6.3
(0.1)
14.5
5.8
20.3
9.0
6.4
Intellectual property consists of product development costs, acquired technology, and patents and trademarks.
F-36
Notes to the Consolidated Financial Statements
April 3, 2022
(in millions of Canadian dollars, except share and per share data)
Indefinite life intangible assets
Indefinite life intangible assets recorded by the Company are comprised of the Canada Goose and Baffin brand names and
domain name associated with the Company’s website. The Company expects to renew the registration of the brand names and
domain names at each expiry date indefinitely, and expects these assets to generate economic benefit in perpetuity. As such,
the Company assessed these intangibles to have indefinite useful lives.
The Company completed its annual impairment tests for the years ended April 3, 2022 and March 28, 2021 for indefinite life
intangible assets and concluded that there was no impairment.
Key Assumptions
The key assumptions used to calculate the value-in-use (VIU) are consistent with the assumptions used to calculate VIU for
goodwill (note 13).
Note 12. 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:
Cost
March 29, 2020
Additions
Lease modifications
Derecognition on termination
Impact of foreign currency translation
March 28, 2021
Additions
Lease modifications
Impact of foreign currency translation
April 3, 2022
Retail stores
$
191.5
75.7
0.6
(2.3)
(12.2)
253.3
49.4
0.5
(6.9)
296.3
Manufacturing
facilities
$
36.6
0.1
—
—
—
36.7
—
—
—
36.7
Other
$
18.0
3.1
(1.5)
—
(1.2)
18.4
0.4
(1.2)
(0.2)
17.4
Total
$
246.1
78.9
(0.9)
(2.3)
(13.4)
308.4
49.8
(0.7)
(7.1)
350.4
F-37
Notes to the Consolidated Financial Statements
April 3, 2022
(in millions of Canadian dollars, except share and per share data)
Accumulated depreciation
March 29, 2020
Depreciation
Derecognition on termination
Impact of foreign currency translation
March 28, 2021
Depreciation
Impairment losses (Note 1)
Impact of foreign currency translation
April 3, 2022
Net book value
March 28, 2021
April 3, 2022
Lease liabilities
Retail stores
$
26.8
36.7
(2.3)
(2.4)
58.8
47.3
6.1
(2.1)
110.1
Manufacturing
facilities
$
4.8
5.1
—
—
9.9
5.3
—
—
15.2
194.5
186.2
26.8
21.5
The following table presents the changes in the Company's lease liabilities:
March 29, 2020
Additions
Lease modifications
Principal payments
Impact of foreign currency translation
March 28, 2021
Additions
Lease modifications
Principal payments
Impact of foreign currency translation
April 3, 2022
Retail stores
$
176.3
74.8
1.1
(30.6)
(10.6)
211.0
48.4
0.5
(37.5)
(5.2)
217.2
Manufacturing
facilities
$
34.7
—
—
(4.8)
—
29.9
—
—
(5.1)
—
24.8
F-38
Other
$
2.7
3.5
—
(0.2)
6.0
4.0
—
(0.1)
9.9
12.4
7.5
Other
$
16.9
3.0
(1.3)
(3.4)
(1.3)
13.9
0.4
(1.2)
(4.3)
(0.1)
8.7
Total
$
34.3
45.3
(2.3)
(2.6)
74.7
56.6
6.1
(2.2)
135.2
233.7
215.2
Total
$
227.9
77.8
(0.2)
(38.8)
(11.9)
254.8
48.8
(0.7)
(46.9)
(5.3)
250.7
Notes to the Consolidated Financial Statements
April 3, 2022
(in millions of Canadian dollars, except share and per share data)
Lease liabilities are classified as current and non-current liabilities as follows:
Current lease liabilities
Non-current lease liabilities
March 28, 2021
Current lease liabilities
Non-current lease liabilities
April 3, 2022
Retail stores
$
36.2
174.8
211.0
49.7
167.5
217.2
Manufacturing
facilities
$
5.1
24.8
29.9
5.8
19.0
24.8
Other
$
3.9
10.0
13.9
3.0
5.7
8.7
Total
$
45.2
209.6
254.8
58.5
192.2
250.7
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.
In the year ended April 3, 2022, $21.5m (March 28, 2021 - $19.5m, March 29, 2020 - $17.5m) 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.
F-39
Notes to the Consolidated Financial Statements
April 3, 2022
(in millions of Canadian dollars, except share and per share data)
Note 13. Goodwill
In the year ended April 3, 2022, goodwill arising from business combinations is $53.1m (March 28, 2021 - $53.1m). The
Company has determined there to be ten CGUs (March 28, 2021 - seven CGUs) for which goodwill and intangible assets are
tested for impairment. The change in the number of CGUs from the comparative period is the result of a realignment in
geographical responsibilities. The Company completed its annual impairment tests and concluded that there was no impairment
in the years ended April 3, 2022 and March 28, 2021.
The following table outlines the goodwill allocation for the applicable CGUs for the current year:
DTC - Retail
DTC - e-Commerce
Wholesale
Goodwill
North America
$
11.7
6.6
5.7
24.0
Asia Pacific
$
9.8
2.6
3.6
16.0
EMEA
(1)
$
4.3
2.8
6.0
13.1
April 3, 2022
Total
$
25.8
12.0
15.3
53.1
(1)
EMEA comprises Europe, the Middle East, Africa, and Latin America.
Goodwill from the comparative year was allocated to CGUs in line with the geographical responsibilities applicable at the time.
The Rest of World CGU from the comparative year has been broken out into the Asia Pacific and EMEA CGUs. Goodwill was
allocated in the comparative year as follows:
DTC - Retail
DTC - e-Commerce
Wholesale
Goodwill
Key Assumptions
North America
$
8.7
7.5
6.9
23.1
Rest of World
$
13.6
6.1
10.3
30.0
March 28, 2021
Total
$
22.3
13.6
17.2
53.1
The key assumptions used to calculate the VIU are those regarding discount rate, revenue and gross margin growth rates, sales
channel mix, and growth in SG&A expenses. These assumptions are considered to be Level 3 in the fair value hierarchy. The
goodwill impairment tests resulted in excess of recoverable value over carrying value of at least 65.8% for each CGU. Because
the VIU amount exceeds the asset’s carrying amount, the asset is not impaired and the fair value less costs of disposition has
not been calculated.
Cash flow projections were discounted using the Company’s weighted average cost of capital, determined to be 11.14%
(March 28, 2021 - 10.80%) based on a risk-free rate, an equity risk premium adjusted for betas of comparable publicly traded
companies, an unsystematic risk premium, country risk premium, country-specific risk premium, a cost of debt based on
comparable corporate bond yields and the capital structure of the Company.
F-40
Notes to the Consolidated Financial Statements
April 3, 2022
(in millions of Canadian dollars, except share and per share data)
Note 14. Accounts payables and accrued liabilities
Accounts payable and accrued liabilities consist of the following:
Trade payables
Accrued liabilities
Employee benefits
Derivative financial instruments
Other payables
Accounts payable and accrued liabilities
Note 15. Provisions
April 3,
2022
$
63.9
67.0
26.5
10.4
8.4
176.2
March 28,
2021
$
78.9
49.9
28.3
8.8
11.9
177.8
Provisions consist primarily of amounts recorded with respect to customer warranty obligations, terminations of sales agents and
distributors, sales returns, and asset retirement obligations.
The provision for warranty claims represents the present value of management’s best estimate of the future outflow of economic
resources that will be required to meet the Company’s obligations for warranties upon the sale of goods, which may include
repair or replacement of previously sold products. The estimate has been made on the basis of historical warranty trends and
may vary as a result of new materials, altered manufacturing processes, customer behaviour and expectations, or other events
affecting product quality and production.
The sales contract provision relates to management’s estimated cost of the departure of certain third-party dealers and
distributors.
Sales returns relate primarily to goods sold through the DTC segment which have a limited right of return (typically within 30
days), or exchange only, in certain jurisdictions.
Asset retirement obligations relate to legal obligations associated with the retirement of tangible long-lived assets, primarily for
leasehold improvements that the Company is contractually obligated to remove at the end of the lease term. The Company
recognizes the liability when such obligations are incurred. The fair value of the liability is estimated based on a number of
assumptions requiring management’s judgment, including closing costs and inflation rates, and is accreted to its projected future
value over time.
F-41
Notes to the Consolidated Financial Statements
April 3, 2022
(in millions of Canadian dollars, except share and per share data)
March 29, 2020
Additional provisions recognized
Reductions resulting from settlement
Release of provisions
Other
March 28, 2021
Additional provisions recognized
Reductions resulting from settlement
Release of provisions
Other
April 3, 2022
Warranty Sales returns
$
10.7
8.5
(4.7)
—
(0.8)
13.7
15.1
(14.4)
(1.2)
(0.3)
12.9
$
19.4
13.2
(6.2)
—
—
26.4
10.0
(7.2)
—
—
29.2
Asset
retirement
obligations
$
3.9
1.8
—
—
(0.2)
5.5
2.2
—
—
—
7.7
Others
$
3.0
1.7
(1.7)
(3.0)
—
—
—
—
—
—
—
Total
$
37.0
25.2
(12.6)
(3.0)
(1.0)
45.6
27.3
(21.6)
(1.2)
(0.3)
49.8
For the year ended March 28, 2021, the Company recognized a net restructuring cost of $1.7m, associated with the May 20,
2020 reorganization to address the impact of COVID-19 pandemic. The provision primarily consisted of employee severance
costs which included obligations related to ongoing payments. This was recorded in net interest, finance and other costs in the
statement of income. At March 28, 2021, all amounts were paid related to these costs.
Provisions are classified as current and non-current liabilities based on management’s expectation of the timing of settlement,
as follows:
Current provisions
Non-current provisions
Note 16. Borrowings
Revolving facility
April 3,
2022
$
18.5
31.3
49.8
March 28,
2021
$
20.0
25.6
45.6
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 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.
F-42
Notes to the Consolidated Financial Statements
April 3, 2022
(in millions of Canadian dollars, except share and per share data)
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 the earlier of quarterly or at the end of the then current interest period (whichever is earlier).
As at April 3, 2022, the Company had repaid all principal amounts owing on the revolving facility (March 28, 2021 - $nil). As at
April 3, 2022, interest and administrative fees for $0.5m remain outstanding. Deferred financing charges in the amounts of
$0.9m (March 28, 2021 - $1.7m), were included in other long-term liabilities. As at and during the year ended April 3, 2022, the
Company was in compliance with all covenants.
The Company had unused borrowing capacity available under the revolving facility of $191.8m as at April 3, 2022 (March 28,
2021 - $181.2m).
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. As the facility
was not renewed, at the time of maturity the deferred financing costs of $0.4m were written off to the statement of income.
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 April 3, 2022, the Company had letters of credit outstanding under the revolving
facility of $4.6m (March 28, 2021 - $5.0m).
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 income. In connection with the Repricing Amendment, the Company incurred transaction costs of
$0.9m 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 terms 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.
F-43
Notes to the Consolidated Financial Statements
April 3, 2022
(in millions of Canadian dollars, except share and per share data)
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. As at April 3, 2022, the Company had US$296.3m (March 28, 2021 - US$300.0m) aggregate
principal amount outstanding under the term loan. 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 year ended April 3, 2022, 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:
Term loan
Unamortized portion of deferred transaction costs
Original issue discount
Mainland China Facilities
April 3,
2022
$
370.8
(0.8)
—
370.0
March 28,
2021
$
377.3
(5.8)
(3.7)
367.8
A subsidiary of the Company in Mainland China has two uncommitted loan facilities in the aggregate amount of RMB 310.0m
("Mainland China Facilities"). The term of each draw on the loans 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 on each facility is equal to loan
prime rate of 1 year, plus 0.15% per annum, and payable at one, three or six months, depending on the term of each draw.
Proceeds drawn on the Mainland China Facilities are being used to support working capital requirements and build up of
inventory for peak season sales. As at April 3, 2022, the Company had no amounts owing on the Mainland China Facilities
(March 28, 2021 - $nil).
Short-term borrowings
As at April 3, 2022, the Company has short-term borrowings in the amount of $3.8m. Short-term borrowings are the quarterly
principal repayments on the term loan of $3.8m (March 28, 2021 - $nil). Short-term borrowings are all due within the next 12
months.
F-44
Notes to the Consolidated Financial Statements
April 3, 2022
(in millions of Canadian dollars, except share and per share data)
Net interest, finance and other costs consist of the following:
Interest expense
Mainland China Facilities
Revolving facility
Term loan
Lease liabilities
Standby fees
Acceleration of unamortized costs on debt extinguishment
Interest income
Other costs
Net interest, finance and other costs
Note 17. Shareholders’ equity
The authorized and issued share capital of the Company are as follows:
Authorized
April 3,
2022
$
March 28,
2021
$
Year ended
March 29,
2020
$
0.4
1.8
17.4
9.1
0.9
9.5
(0.4)
0.3
39.0
0.2
3.1
14.4
9.5
1.4
1.1
(0.7)
1.9
30.9
0.2
3.7
8.7
8.4
0.8
7.0
(0.4)
—
28.4
The authorized share capital of the Company consists of an unlimited number of subordinate voting shares without par value, an
unlimited number of multiple voting shares without par value, and an unlimited number of preferred shares without par value,
issuable in series.
Issued
Multiple voting shares - Holders of the multiple voting shares are entitled to 10 votes per multiple voting share. Multiple voting
shares are convertible at any time at the option of the holder into one subordinate voting share. The multiple voting shares will
automatically be converted into subordinate voting shares when they cease to be owned by one of the principal shareholders. In
addition, the multiple voting shares of either of the principal shareholders will automatically be converted to subordinate voting
shares at such time as the beneficial ownership of that shareholder falls below 15% of the outstanding subordinate voting
shares and multiple voting shares outstanding, or additionally, in the case of DTR, when the current Chairman and Chief
Executive Officer no longer serves as a director of the Company or in a senior management position.
Subordinate voting shares - Holders of the subordinate voting shares are entitled to one vote per subordinate voting share.
The rights of the subordinate voting shares and the multiple voting shares are substantially identical, except for voting and
conversion. Subject to the prior rights of any preferred shares, the holders of subordinate and multiple voting shares participate
equally in any dividends declared and share equally in any distribution of assets on liquidation, dissolution, or winding up.
F-45
Notes to the Consolidated Financial Statements
April 3, 2022
(in millions of Canadian dollars, except share and per share data)
Share capital transactions for the year ended April 3, 2022
Normal course issuer bid
The Board of Directors has authorized the Company to initiate a normal course issuer bid ("NCIB"), in accordance with the
requirements of the Toronto Stock Exchange, to purchase up to 5,943,239 subordinate voting shares over the 12-month period
from August 20, 2021 to August 19, 2022. Purchased subordinate voting shares will be cancelled.
Further, the Board of Directors has authorized the Company to initiate an automatic share purchase plan ("ASPP") under which
a designated broker may purchase subordinate voting shares under the NCIB during the regularly scheduled quarterly trading
blackout period. The repurchases made under the ASPP will be made in accordance with certain purchasing parameters and
will continue until the earlier of the date in which the Company has acquired the maximum limit of subordinate voting shares
pursuant to the ASPP or upon the date of expiry of the NCIB.
During the year ended April 3, 2022, the Company purchased 5,636,763 subordinate voting shares for cancellation for total cash
consideration of $253.2m. The amount to purchase the subordinate voting shares has been charged to share capital, with the
remaining $241.3m charged to retained earnings.
The transactions affecting the issued and outstanding share capital of the Company are described below:
March 28, 2021
Purchase of subordinate voting shares
Exercise of stock options
Settlement of RSUs
April 3, 2022
Multiple voting shares
$
1.4
—
—
—
1.4
Number
51,004,076
—
—
—
51,004,076
Subordinate voting shares
$
119.1
(11.9)
9.9
—
117.1
Number
59,435,079
(5,636,763)
342,148
49,968
54,190,432
Number
110,439,155
(5,636,763)
342,148
49,968
105,194,508
Share capital transactions for the year ended March 28, 2021
The transactions affecting the issued and outstanding share capital of the Company are described below:
March 29, 2020
Exercise of stock options
Settlement of RSUs
March 28, 2021
Multiple voting shares
$
1.4
—
—
1.4
Number
51,004,076
—
—
51,004,076
Subordinate voting shares
$
113.3
5.8
—
119.1
Number
58,999,182
422,511
13,386
59,435,079
Number
110,003,258
422,511
13,386
110,439,155
Total
$
120.5
(11.9)
9.9
—
118.5
Total
$
114.7
5.8
—
120.5
F-46
Notes to the Consolidated Financial Statements
April 3, 2022
(in millions of Canadian dollars, except share and per share data)
Share capital transactions for the year ended March 29, 2020
Normal course issuer bid
The Board of Directors authorized the Company to initiate a NCIB, in accordance with the requirements of the Toronto Stock
Exchange, to purchase up to 1,600,000 subordinate voting shares over the 12-month period from May 31, 2019 to May 30,
2020. Purchased subordinate voting shares will be cancelled.
During the year ended March 29, 2020, the Company purchased 853,500 shares for cancellation at an average price per share
of $45.35 for total cash consideration of $38.7m. The amount paid to purchase subordinate voting shares has been charged to
share capital at the average share capital amount per share outstanding of $1.6m, with the remaining $37.1m charged to
retained earnings.
The transactions affecting the issued and outstanding share capital of the Company are described below:
Multiple voting shares
$
1.4
—
Number
51,004,076
—
Subordinate voting shares
$
111.2
(38.7)
Number
59,106,998
(853,500)
—
—
—
51,004,076
—
—
—
1.4
—
742,134
3,550
58,999,182
37.1
3.7
—
113.3
Number
110,111,074
(853,500)
—
742,134
3,550
110,003,258
Total
$
112.6
(38.7)
37.1
3.7
—
114.7
March 31, 2019
Purchase of subordinate voting shares
Exercise of purchase price over
average share capital amount
Exercise of stock options
Settlement of RSUs
March 29, 2020
Note 18. Share-based payments
Stock options
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.
Legacy Plan
Under the terms of the Legacy Plan, options were granted to certain executives of the Company which are exercisable to
purchase subordinate voting shares. The options vest contingent upon meeting the service, performance goals and exit event
conditions of the Legacy Plan. No new options will be issued under the Legacy Plan.
a) Service-vested options
Service-vested options are subject to the executive’s continuing employment and generally are scheduled to vest 40%
on the second anniversary of the date of grant, 20% on the third anniversary, 20% on the fourth anniversary and 20% on
the fifth anniversary.
F-47
Notes to the Consolidated Financial Statements
April 3, 2022
(in millions of Canadian dollars, except share and per share data)
b) Performance-vested and exit event options
Performance-vested options that are tied to an exit event are eligible to vest pro rata on the same schedule as service-
vested options, but do not vest until the exit event has occurred. All exit event conditions have been met, and no
outstanding options are subject to exit event conditions.
Other performance-vested options vest based on measurable performance targets that do not involve an exit
event. Performance-vested options are subject to the executive’s continued employment.
Omnibus Plan
Under the terms of the Omnibus Plan, options are granted to certain employees of the Company which are exercisable to
purchase subordinate voting shares. The options vest over four years contingent upon meeting the service conditions of the
Omnibus Plan, 25% on each anniversary of the date of grant.
Stock option transactions are as follows:
April 3, 2022
Year ended
March 28, 2021
Options outstanding, beginning of period
Granted to purchase shares
Exercised
Cancelled
Options outstanding, end of period
Weighted
average
exercise price
38.32
$
48.92
$
20.73
$
44.94
$
$
42.99
F-48
Number of
shares
2,498,973 $
739,420 $
(342,148) $
(173,555) $
2,722,690 $
Weighted
average
exercise price
32.97
37.19
9.42
48.44
38.32
Number of
shares
1,794,377
1,244,975
(422,511)
(117,868)
2,498,973
Notes to the Consolidated Financial Statements
April 3, 2022
(in millions of Canadian dollars, except share and per share data)
The following table summarizes information about stock options outstanding and exercisable at April 3, 2022:
Exercise price
$0.02
$0.25
$1.79
$4.62
$8.94
$23.64
$30.73
$31.79
$33.97
$45.34
$46.38
$48.21
$48.93
$50.00
$63.03
$83.53
Options Outstanding
Weighted average
remaining life in years
2.0
2.4
2.9
4.0
4.8
5.4
5.2
5.6
8.2
7.2
7.6
9.4
9.2
8.2
7.0
6.2
7.5
Number
62,271
55,248
44,307
22,221
124,444
42,576
48,730
35,622
755,909
47,244
8,573
11,045
662,875
250,000
373,674
177,951
2,722,690
F-49
Options Exercisable
Weighted average
remaining life in years
2.0
2.4
2.9
4.0
4.8
5.4
5.2
5.6
8.2
7.2
7.6
0.0
0.0
8.2
7.0
6.2
5.9
Number
62,271
55,248
44,307
22,221
124,444
42,576
48,730
35,622
100,380
19,605
2,857
—
—
62,500
280,246
133,451
1,034,458
Notes to the Consolidated Financial Statements
April 3, 2022
(in millions of Canadian dollars, except share and per share data)
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:
RSUs outstanding, beginning of period
Granted
Settled
Cancelled
RSUs outstanding, end of period
April 3,
2022
Number
137,117
152,320
(49,968)
(23,879)
215,590
Year ended
March 28,
2021
Number
39,432
119,758
(13,386)
(8,687)
137,117
Subordinate voting shares, to a maximum of 3,008,686 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 Plan.
Accounting for share-based awards
For the year ended April 3, 2022, the Company recorded $14.0m as contributed surplus and compensation expense for stock
options and RSUs (March 28, 2021 - $11.3m, March 29, 2020 - $7.8m). 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:
Weighted average stock price valuation
Weighted average exercise price
Risk-free interest rate
Expected life in years
Expected dividend yield
Volatility
Weighted average fair value of options issued
April 3,
2022
48.92
48.92
$
$
0.44 %
5
— %
40 %
14.36
$
Year ended
March 28,
2021
37.19
37.19
0.32 %
5
— %
40 %
9.90
$
$
$
F-50
Notes to the Consolidated Financial Statements
April 3, 2022
(in millions of Canadian dollars, except share and per share data)
Note 19. 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 year ended April 3, 2022, the Company
incurred expenses with related parties of $1.7m (March 28, 2021 - $1.2m, March 29, 2020 - $1.7m) from companies related to
certain shareholders. Net balances owing to related parties as at April 3, 2022 were $0.3m (March 28, 2021 - $0.3m).
A lease liability due to the previous controlling shareholder of the acquired Baffin Inc. business (the "Baffin Vendor") for leased
premises was $3.8m as at April 3, 2022 (March 28, 2021 - $4.6m). During the year ended April 3, 2022, 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 $1.4m (March 28, 2021 - $1.2m, March 29, 2020 - $1.4m). No amounts were owing to Baffin entities as at
April 3, 2022 and March 28, 2021.
Terms and conditions of transactions with related parties
Transactions with related parties are conducted on terms pursuant to an approved agreement, or are approved by the Board of
Directors.
Key management compensation
Key management consists of the Board of Directors, the Chairman and Chief Executive Officer and the executives who report
directly to the Chairman and Chief Executive Officer.
Short term employee benefits
Long term employee benefits
Share-based compensation
Compensation expense
April 3,
2022
$
12.5
0.1
11.5
24.1
March 28,
2021
$
13.2
0.1
8.6
21.9
Year ended
March 29,
2020
$
9.1
0.1
5.9
15.1
Note 20. Financial instruments and fair values
Management assessed that the fair values of cash, trade receivables, accounts payable and accrued liabilities approximate their
carrying amounts largely due to the short-term maturities of these instruments.
The Company’s derivative financial assets and financial liabilities are measured at fair value at the end of each reporting period.
The following table gives information about how the fair values of these financial assets and financial liabilities are determined,
in particular, the valuation technique(s) and inputs used.
F-51
Notes to the Consolidated Financial Statements
April 3, 2022
(in millions of Canadian dollars, except share and per share data)
Financial assets/
financial liabilities
Fair value
hierarchy
Foreign currency forward
contracts
Level 2
Foreign currency and interest
rate swap contracts
Level 2
Valuation technique(s) and key input(s)
Future cash flows are estimated based on forward exchange rates
(from observable forward exchange rates at the end of the reporting
period) and contract forward rates, discounted at a rate that reflects
the credit risk of various counterparties.
Future cash flows are estimated based on forward exchange rates
(from observable forward exchange and interest swap rates at the end
of the reporting period) and contract forward rates, discounted at a rate
that reflects the credit risk of various counterparties.
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:
April 3, 2022
March 28, 2021
Level 1
$
Level 2
$
Level 3
$
Carrying
value Fair value
$
$
Level 1
$
Level 2
$
Level 3
$
Carrying
value Fair value
$
$
Financial
assets
Derivatives
included in other
current assets
Derivatives
included in other
long-term
assets
Financial
liabilities
Derivatives
included in
accounts
payable and
accrued
liabilities
Derivatives
included in other
long-term
liabilities
Term loan
—
9.5
—
9.5
9.5
—
5.9
—
20.4
—
20.4
20.4
—
5.1
—
10.4
—
10.4
10.4
—
8.8
—
—
23.1
370.0
—
—
23.1
370.0
23.1
386.9
—
—
19.5
367.8
—
—
—
—
—
5.9
5.9
5.1
5.1
8.8
8.8
19.5
367.8
19.5
377.3
As at April 3, 2022, there were no other transfers between the levels of the fair value hierarchy.
F-52
Notes to the Consolidated Financial Statements
April 3, 2022
(in millions of Canadian dollars, except share and per share data)
Note 21. 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 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 the
revolving facility and the Mainland China Facilities 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 April 3, 2022:
(1)
Accounts payable and accrued liabilities
Term loan
Interest commitments relating to
borrowings
Foreign exchange forward contracts
Lease obligations
Pension obligation
Total contractual obligations
2023
$
176.2
3.8
17.2
0.9
65.8
—
263.9
2024
$
—
3.8
16.7
—
54.6
—
75.1
2025
$
—
3.8
16.7
—
50.5
—
71.0
2026
$
—
3.8
16.7
2.7
39.6
—
62.8
2027
$
—
3.8
16.7
—
33.3
—
53.8
Thereafter
$
—
351.8
8.4
—
79.9
2.2
442.3
Total
$
176.2
370.8
92.4
3.6
323.7
2.2
968.9
(1)
Interest commitments are calculated based on the loan balance and the interest rate payable on the term loan of 4.51% as
at April 3, 2022.
F-53
Notes to the Consolidated Financial Statements
April 3, 2022
(in millions of Canadian dollars, except share and per share data)
As at April 3, 2022, 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.
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
April 3, 2022, the Company had $5.4m outstanding.
In addition, during the year ended April 3, 2022, a subsidiary of the Company in Mainland China entered into letters of guarantee
in the amount of $9.3m. Amounts will be used to support retail operations through letters of guarantee, standby letters of credit,
performance bonds, counter guarantees, counter standby letters of credit, or similar credits.
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. The
Company has an agreement with a third party who has insured the risk of loss for up to 90% of accounts receivable from certain
designated customers subject to a total deductible of $0.1m, to a maximum of $30.0m per year. As at April 3, 2022, accounts
receivable totaling approximately $8.1m (March 28, 2021 - $5.7m) were insured subject to the policy cap. Complementary to the
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.
Customer deposits are received in advance from certain customers for seasonal orders to further mitigate credit risk, and
applied to reduce accounts receivable when goods are shipped. As at April 3, 2022, customer deposits of $0.2m (March 28,
2021 - $1.6m) were included in accounts payable and accrued liabilities.
F-54
Notes to the Consolidated Financial Statements
April 3, 2022
(in millions of Canadian dollars, except share and per share data)
The aging of trade receivables was as follows:
Trade accounts receivable
Credit card receivables
Other receivables
April 3, 2022
Trade accounts receivable
Credit card receivables
Government grant receivable
Other receivables
March 28, 2021
Total
$
22.0
2.5
19.3
43.8
21.9
2.1
4.4
14.3
42.7
Current
$
14.4
2.5
9.5
26.4
9.0
2.1
4.4
14.3
29.8
< 30 days
$
2.8
—
—
2.8
31-60 days
$
2.1
—
—
2.1
5.4
—
—
—
5.4
1.4
—
—
—
1.4
Past due
> 61 days
$
2.7
—
9.8
12.5
6.1
—
—
—
6.1
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.
Accepted currencies include euros, British pounds sterling, and Swiss francs. The Company is charged a fee of the applicable
EURIBOR or LIBOR reference rate plus 1.15% per annum, based on the number of days between the purchase date and the
invoice due date, which is lower than the Company’s average borrowing rate under its revolving facility. The program is utilized
to provide sufficient liquidity to support its international operating cash needs. Upon transfer of the receivables, the Company
receives cash proceeds and continues to service the receivables on behalf of the third-party financial institution. The program
meets the derecognition requirements in accordance with IFRS 9, Financial Instruments as the Company transfers substantially
all the risks and rewards of ownership upon the sale of a receivable. These proceeds are classified as cash flows from operating
activities in the statement of cash flows.
For the year ended April 3, 2022, the Company received cash proceeds from the sale of trade accounts receivable with carrying
values of $26.6m which were derecognized from the Company's statement of financial position (March 28, 2021 - $16.9m). Fees
of less than $0.1m were incurred during the year ended April 3, 2022 (March 28, 2021 - less than $0.1m) and included in net
interest, finance and other costs in the statement of income. As at April 3, 2022, the outstanding amount of trade accounts
receivable derecognized from the Company’s statement of financial position, but which the Company continued to service was
$2.0m (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.
F-55
Notes to the Consolidated Financial Statements
April 3, 2022
(in millions of Canadian dollars, except share and per share data)
Foreign exchange risk
Foreign exchange risk in operating cash flows
The Company’s consolidated financial statements are expressed in Canadian dollars, but a substantial portion of the Company’s
revenues, purchases, and expenses are denominated in other currencies, primarily 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. During the second quarter
ended September 26, 2021, the Company initiated the operating hedge program for the fiscal year ending April 2, 2023.
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. As a result, we are exposed to foreign
currency translation gains and losses. Appreciating foreign currencies relative to the Canadian dollar, to the extent they are not
hedged, will positively impact operating income and net income by increasing our revenue, while depreciating foreign currencies
relative to the Canadian dollar will have the opposite impact.
The Company recognized the following unrealized losses in the fair value of derivatives designated as cash flow hedges in other
comprehensive income:
Net loss
$
April 3, 2022
Tax expense
$
March 28, 2021
Tax expense
$
Net loss
$
Year ended
March 29, 2020
Net loss Tax recovery
$
$
Forward foreign exchange
contracts designated as cash
flow hedges
(4.5)
(0.1)
(0.3)
(1.1)
(3.7)
1.1
The Company reclassified the following losses and gains from other comprehensive income on derivatives designated as cash
flow hedges to locations in the consolidated financial statements described below:
Loss (gain) from other comprehensive income
Forward foreign exchange contracts designated as cash flow hedges
Revenue
SG&A expenses
Inventory
April 3,
2022
$
3.9
(0.4)
(0.9)
March 28,
2021
$
3.3
(0.2)
(0.9)
Year ended
March 29,
2020
$
(0.2)
1.0
0.1
F-56
Notes to the Consolidated Financial Statements
April 3, 2022
(in millions of Canadian dollars, except share and per share data)
During the year ended April 3, 2022, an unrealized gain of $4.7m (March 28, 2021 - unrealized gain of $6.4m, March 29, 2020 -
unrealized loss of $3.2m) on forward exchange contracts that were not treated as hedges was recognized in SG&A expenses in
the statement of income.
Foreign currency forward exchange contracts outstanding as at April 3, 2022 related to operating cash flows were:
(in millions)
Forward contract to purchase Canadian dollars
Forward contract to sell Canadian dollars
Forward contract to purchase euros
Forward contract to sell euros
Foreign exchange risk on borrowings
US$
€
US$
€
CNY
£
CHF
CHF
£
Aggregate Amounts
Currency
57.4
66.0
35.6
34.5
293.3
29.9
2.1
8.3
3.9
U.S. dollars
euros
U.S. dollars
euros
Chinese yuan
British pounds sterling
Swiss francs
Swiss francs
British pounds sterling
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 16). 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 gains and losses in the fair value of derivatives designed as hedging
instruments in other comprehensive income:
April 3, 2022
Net gain
$
Tax expense
$
Net (loss)
gain
$
March 28, 2021
Tax (expense)
recovery
$
Year ended
March 29, 2020
Net gain
(loss)
$
Tax expense
$
13.2
(4.5)
(0.9)
(0.5)
1.3
—
—
0.2
0.1
(0.3)
(0.2)
(0.2)
Swaps designated as cash
flow hedges
Euro-denominated cross-
currency swap designated as a
net investment hedge
F-57
Notes to the Consolidated Financial Statements
April 3, 2022
(in millions of Canadian dollars, except share and per share data)
The Company reclassified the following losses and gains from other comprehensive income on derivatives designated as
hedging instruments to SG&A expenses:
Loss (gain) from other comprehensive income
Swaps designated as cash flow hedges
April 3,
2022
$
0.9
March 28,
2021
$
5.6
Year ended
March 29,
2020
$
(5.3)
During the year ended April 3, 2022, an unrealized loss of $4.6m (March 28, 2021 - unrealized loss of $21.7m, March 29, 2020 -
unrealized gain of $3.3m) in the fair value of the long-dated forward exchange contract related to a portion of the term loan
balance has been recognized in SG&A expenses in the statement of income.
Interest rate risk
The Company is exposed to interest rate risk related to the effect of interest rate changes on borrowings outstanding under the
revolving facility, the term loan, and the Mainland China Facilities. Based on the weighted average amount of outstanding
borrowings on our Mainland China Facilities during the year ended April 3, 2022, a 1.00% increase in the average interest rate
on our borrowings would have increased interest expense by $0.1m (March 28, 2021 - $0.1m). Correspondingly, a 1.00%
increase in the average interest rate would have increased interest expense on the term loan by $3.7m (March 28, 2021 -
$2.6m).
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 22. Selected cash flow information
Changes in non-cash operating items
Trade receivables
Inventories
Other current assets
Accounts payable and accrued liabilities
Provisions
Other
Change in non-cash operating items
April 3,
2022
$
(8.7)
(60.7)
(3.4)
(8.5)
3.7
(5.2)
(82.8)
March 28,
2021
$
(10.4)
67.0
5.8
28.2
8.2
5.7
104.5
Year ended
March 29,
2020
$
(10.6)
(141.8)
1.2
3.6
14.5
2.5
(130.6)
F-58
Notes to the Consolidated Financial Statements
April 3, 2022
(in millions of Canadian dollars, except share and per share data)
Note 23. Subsequent Events
Joint Venture
On April 4, 2022, the Company along with its long-standing distribution partner Sazaby League, Ltd. formed a joint venture,
Canada Goose Japan, to capture synergies in their business arrangement. The Company contributed $2.5m for 50% of the legal
entity comprising the joint venture, and controls the joint venture from the date of its inception. Sazaby contributed cash as well
as certain assets and liabilities in exchange for its 50% share.
The acquisition will be accounted for as a business combination, with the Company consolidating 100% of the results of the joint
venture from the date of the acquisition. Given the timing of the transaction and measurement uncertainty with final purchase
agreement consideration adjustments, the purchase price allocation is yet to be finalized and a preliminary purchase price
allocation will be disclosed in the Company’s first quarter 2023 condensed consolidated interim financial statements.
There were $0.7m in transaction related costs included in the SG&A expenses in the consolidated statement of income and
comprehensive income for the year ended April 3, 2022.
F-59
SCHEDULE I – CONDENSED FINANCIAL INFORMATION OF
CANADA GOOSE HOLDINGS INC.
(PARENT COMPANY)
All operating activities of the Company are conducted by its subsidiary. Canada Goose Holdings Inc. is a holding company and
does not have any material assets or conduct business operations other than investments in its subsidiaries. The credit
agreement of Canada Goose Inc, a wholly owned subsidiary of Canada Goose Holdings Inc., contains provisions whereby
Canada Goose Inc. has restrictions on the ability to pay dividends, loan funds and make other upstream distributions to Canada
Goose Holdings Inc.
These condensed parent company financial statements have been prepared using the same accounting principles and policies
described in the notes to the consolidated financial statements. Refer to the consolidated financial statements and notes
presented above for additional information and disclosures with respect to these condensed financial statements.
F-60
PARENT COMPANY INFORMATION
Canada Goose Holdings Inc.
Schedule I – Condensed Statements of Income
(in millions of Canadian dollars)
Equity in comprehensive income of subsidiary
Fee income (expense) from subsidiary
Selling, general and administration expenses
Net interest expense and other finance costs
Income before income taxes
Income tax recovery
Net income
April 3,
2022
$
88.6
10.8
99.4
16.9
1.9
80.6
(2.0)
82.6
March 28,
2021
Restated
(Note 1)
$
74.7
(1.3)
73.4
13.1
—
60.3
(4.7)
65.0
Year ended
March 29,
2020
Restated
(Note 1)
$
152.6
7.2
159.8
9.9
—
149.9
(0.6)
150.5
The accompanying notes to the condensed financial statements are an integral part of these financial statements.
F-61
PARENT COMPANY INFORMATION
Canada Goose Holdings Inc.
Schedule I – Condensed Statements of Financial Position
(in millions of Canadian dollars)
Assets
Current assets
Cash
Other current assets
Total current assets
Note receivable from subsidiary
Investment in subsidiary
Deferred income taxes
Total assets
Liabilities
Current liabilities
Accounts payable and accrued liabilities
Due to subsidiary
Total liabilities
Shareholders' equity
Share capital
Contributed surplus
Retained earnings
Total shareholders' equity
Total liabilities & shareholders' equity
April 3,
2022
$
0.3
—
0.3
60.5
638.2
9.3
708.3
0.6
279.8
280.4
118.5
36.2
273.2
427.9
708.3
March 28,
2021
Restated
(Note 1)
$
March 30,
2020
Restated
(Note 1)
$
4.3
—
4.3
43.3
549.6
7.3
604.5
0.4
26.5
26.9
120.5
25.2
431.9
577.6
604.5
0.6
0.1
0.7
54.0
474.9
2.6
532.2
0.3
34.6
34.9
114.7
15.7
366.9
497.3
532.2
The accompanying notes to the condensed financial statements are an integral part of these financial statements.
F-62
PARENT COMPANY INFORMATION
Canada Goose Holdings Inc.
Schedule I – Condensed Statements of Changes in Equity
(in millions of Canadian dollars)
Balance at March 31, 2019
Adjustment for IFRIC Agenda Decision
Balance at April 1, 2019
IFRS 16 initial application in subsidiaries
Normal course issuer bid purchase of
subordinate voting shares
Exercise of stock options
Net income
Share-based payment
Balance at March 29, 2020
Exercise of stock options
Net income
Share-based payment
Balance at March 28, 2021
Normal course issuer bid purchase of
subordinate voting shares
Exercise of stock options
Net income
Share-based payment
Deferred tax on share-based payment
Balance at April 3, 2022
Share capital
Contributed
surplus
$
112.6
—
112.6
—
(1.6)
3.7
—
—
114.7
5.8
—
—
120.5
(11.9)
9.9
—
—
—
118.5
$
9.2
—
9.2
—
—
(1.3)
—
7.8
15.7
(1.8)
—
11.3
25.2
—
(2.8)
—
14.0
(0.2)
36.2
Retained
earnings
Restated (Note 1)
$
277.3
(18.9)
258.4
(4.9)
(37.1)
—
150.5
—
366.9
—
65.0
—
431.9
(241.3)
—
82.6
—
—
273.2
Total
$
399.1
(18.9)
380.2
(4.9)
(38.7)
2.4
150.5
7.8
497.3
4.0
65.0
11.3
577.6
(253.2)
7.1
82.6
14.0
(0.2)
427.9
The accompanying notes to the condensed financial statements are an integral part of these financial statements.
F-63
PARENT COMPANY INFORMATION
Canada Goose Holdings Inc.
Schedule I – Condensed Statements of Cash Flows
(in millions of Canadian dollars)
Operating activities
Net income
Items not affecting cash:
Equity in undistributed earnings of subsidiary
Net interest expense
Income tax recovery
Share-based compensation
Changes in assets and liabilities
Intercompany accounts payable
Net cash from (used in) operating activities
Investing activities
Dividend received
Net cash from investing activities
Financing activities
Subordinate voting shares purchased for cancellation
Exercise of stock options
Net cash (used in) from financing activities
(Decrease) increase in cash
Cash, beginning of year
Cash, end of year
April 3,
2022
$
82.6
(88.6)
1.9
(2.0)
14.0
7.9
(20.2)
242.5
230.2
—
—
(241.3)
7.1
(234.2)
(4.0)
4.3
0.3
March 28,
2021
Restated
(Note 1)
$
Year ended
March 29,
2020
Restated
(Note 1)
$
65.0
(74.7)
—
(4.7)
11.3
(3.1)
2.8
—
(0.3)
—
—
—
4.0
4.0
3.7
0.6
4.3
150.5
(152.6)
—
(0.6)
7.8
5.1
(9.6)
—
(4.5)
38.7
38.7
(37.1)
2.4
(34.7)
(0.5)
1.1
0.6
The accompanying notes to the condensed financial statements are an integral part of these financial statements.
F-64
PARENT COMPANY INFORMATION
Canada Goose Holdings Inc.
Schedule I – Notes to the Condensed Financial Statements
(in millions of Canadian dollars)
1. BASIS OF PRESENTATION
Canada Goose Holdings Inc. (the “Parent Company”) is a holding company that conducts substantially all of its business
operations through its subsidiary. The Parent Company (a British Columbia corporation) was incorporated on November 21,
2013.
The Parent Company has accounted for the earnings of its subsidiary under the equity method in these unconsolidated
condensed financial statements.
In April 2021, the International Financial Reporting Interpretations Committee (“IFRIC”) finalized an agenda decision within the
scope of IAS 38, Intangible Assets which clarified the accounting of configuration and customization costs in cloud computing
arrangements often referred to as Software as a Service ("SaaS") arrangements. In accordance with IAS 8, retrospective
application is required for accounting policy changes and comparative financial information was restated in these consolidated
financial statements. See the Annual Consolidated Financial Statements Note 4 in reference to the restatements on the
comparative periods.
2. STATEMENT OF COMPLIANCE
The Parent Company prepared these unconsolidated financial statements in accordance with International Accounting
Standards 27, "Separate Financial Statements", as issued by the International Accounting Standards Board.
3. COMMITMENTS AND CONTINGENCIES
The Parent Company has no material commitments or contingencies during the reported periods.
4. SHAREHOLDERS’ EQUITY
See the Annual Consolidated Financial Statements Note 17 in reference to the normal course issuer bid transaction during the
year ended April 3, 2022.
F-65
Exhibit 8.1
SUBSIDIARIES OF CANADA GOOSE HOLDINGS, INC.
Entity
Jurisdiction
Canada Goose Inc.
Canada Goose International Holdings Limited
Canada Goose US, Inc.
Canada Goose International AG
Canada Goose Services Limited
Canada Goose UK Retail Limited
Canada Goose France Retail SAS
Canada Goose Italy Retail S.r.l
Canada Goose Germany Retail GmbH
Canada Goose Netherlands Retail B.V.
Canada Goose Asia Holdings Limited
CG (Shanghai) Trading Co., Ltd.
Canada Goose HK Limited
Canada Goose Japan, K.K.
Baffin Limited
Baffin US, Inc.
(1)
(1)
50% owned by Canada Goose International AG.
97800087_1
Ontario
United Kingdom
Delaware
Zug (Switzerland)
United Kingdom
United Kingdom
France
Italy
Germany
Netherlands
Hong Kong
Jing’an, Shanghai
Hong Kong
Japan
Ontario
Delaware
I, Dani Reiss, certify that:
CERTIFICATION
1.
I have reviewed this annual report on Form 20-F of Canada Goose Holdings Inc.;
Exhibit 12.1
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in
all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods
presented in this report;
4.
The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as
defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed
under our supervision, to ensure that material information relating to the company, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is
being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be
designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)
Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by
this report based on such evaluation; and
d) Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the
period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the
company’s internal control over financial reporting; and
5.
The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over
financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons
performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial
reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and
report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the
company’s internal control over financial reporting.
Date: May 19, 2022
By:
/s/ Dani Reiss
Dani Reiss
Chairman and Chief Executive Officer
I, Jonathan Sinclair, certify that:
CERTIFICATION
1.
I have reviewed this annual report on Form 20-F of Canada Goose Holdings Inc.;
Exhibit 12.2
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in
all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods
presented in this report;
4.
The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as
defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed
under our supervision, to ensure that material information relating to the company, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is
being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be
designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)
Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by
this report based on such evaluation; and
d) Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the
period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the
company’s internal control over financial reporting; and
5.
The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over
financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons
performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial
reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and
report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the
company’s internal control over financial reporting.
Date: May 19, 2022
By:
/s/ Jonathan Sinclair
Jonathan Sinclair
Executive Vice President and
Chief Financial Officer
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Exhibit 13.1
In connection with this annual report on Form 20-F of Canada Goose Holdings Inc. (the “Company”) for the fiscal year ended
April 3, 2022 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Dani Reiss, Chairman
and Chief Executive Officer of the Company, hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:
(i)
The Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of
1934, as amended; and
(ii) The information contained in the Report fairly presents, in all material respects, the financial condition and results of
operations of the Company.
Date: May 19, 2022
By:
/s/ Dani Reiss
Dani Reiss
Chairman and Chief Executive Officer
(Principal Executive Officer)
The foregoing certification is being furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a)
and (b) of Section 1350, Chapter 63 of Title 18, United States Code) and is not being filed as part of the Form 20-F or as a
separate disclosure document.
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Exhibit 13.2
In connection with this annual report on Form 20-F of Canada Goose Holdings Inc. (the “Company”) for the fiscal year ended
April 3, 2022 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jonathan Sinclair,
Executive Vice President and Chief Financial Officer of the Company, hereby certify pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:
(i)
(ii)
The Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of
1934, as amended; and
The information contained in the Report fairly presents, in all material respects, the financial condition and results of
operations of the Company.
Date: May 19, 2022
By:
/s/ Jonathan Sinclair
Jonathan Sinclair
Executive Vice President and
Chief Financial Officer
(Principal Financial Officer)
The foregoing certification is being furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a)
and (b) of Section 1350, Chapter 63 of Title 18, United States Code) and is not being filed as part of the Form 20-F or as a
separate disclosure document.
Consent of Independent Registered Public Accounting Firm
We consent to the incorporation by reference in Registration Statement No. 333-216812 on Form S-8 of our reports dated May 18, 2022, relating to the
financial statements of Canada Goose Holdings Inc. (the “Company”) and the effectiveness of the Company’s internal control over financial reporting,
appearing in this Annual Report on Form 20-F for the year ended April 3, 2022.
/s/ Deloitte LLP
Chartered Professional Accountants
Licensed Public Accountants
Toronto, Canada
May 19, 2022