Canada Goose : Q4 2024 MD&A

CANADA GOOSE HOLDINGS INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

For the fourth quarter and year ended March 31, 2024

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 15, 2024 and provides information concerning our results of operations and financial condition for the fourth quarter and fiscal year ended March 31, 2024 ("fiscal 2024"). You should read this MD&A together with our audited consolidated financial statements and the related notes for the year ended March 31, 2024 ("Annual Financial Statements"). Additional information about Canada Goose is available on our website at www.canadagoose.com, on the SEDAR+ website at www.sedarplus.ca, 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," "continue," "could," "estimate," "expect," "forecast," "intend," "may," "plan," "predict," "project," "potential," "will," "would," 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 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;
• our ability to adapt to changes to our business as a whole due to environmental, social and governance ("ESG") considerations;
• the continued absence of material global supply chain disruptions to our business and our ability to fulfill demand and maintain sufficient inventory levels, which we continue to monitor; and
• the absence of material adverse changes in our industry or the global economy.

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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:

• 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;
• our indebtedness may adversely affect our financial condition, and we may not be able to refinance or renegotiate such indebtedness on favourable or satisfactory terms;
• 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 manage inventory and forecast our inventory need, which we continue to monitor, and to manage our production distribution networks. If our supply exceeds demand, we may be required to take certain actions to reduce inventory which could damage our brand;
• we may not be able to protect or preserve our brand image and proprietary rights globally;
• the success of our business strategy;
• our ability to manage our exposure to data security and cyber security events;
• disruptions to manufacturing and distribution activities due to factors such as operational issues, disruptions in transportation logistic functions or labour shortages or disruptions;
• risks and global disruptions associated with geopolitical events, which may further affect general economic and operating conditions;
• fluctuations in raw material costs, interest rates and currency exchange rates;
• we may be unable to maintain effective internal controls over financial reporting; and
• our ability to successfully realize expected benefits from our Transformation Program.

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, liquidity and capital resources, 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

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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 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 this accompanying MD&A are presented in millions of Canadian dollars, except where otherwise indicated. Certain financial measures contained in this MD&A are non-IFRSfinancial 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. Material accounting policy information" to the Annual Financial Statements.

All references to "$", "CAD" and "dollars" refer to Canadian dollars, "USD" refers to U.S. dollars, "GBP" refers to British pounds sterling, "EUR" refers to euros, "CHF" refers to Swiss francs, "CNY" refers to Chinese yuan, "RMB" refers to Chinese renminbi, "HKD" refers to Hong Kong dollars and "JPY" refers to Japanese yen unless otherwise indicated. Certain totals, subtotals and percentages throughout this MD&A may not reconcile due to rounding.

All references to "fiscal 2022" are to the Company's fiscal year ended April 3, 2022; to "fiscal 2023" are to the Company's fiscal year ended April 2, 2023; and to "fiscal 2024" are to the Company's fiscal year ended March 31, 2024.

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. Both fiscal 2024 and fiscal 2023 were 52-week fiscal years.

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Certain comparative figures have been reclassified to conform with the current year presentation, where foreign exchange gains and losses related to the outstanding principal balance on the Term Loan (as defined below), net of hedging, are reflected in the presentation of net interest, finance and other costs; previously this was presented in selling, general and administrative ("SG&A") expenses. This change was made to present all financing costs related to the Term Loan within the same financial statement caption in the consolidated statements of income. For the fourth quarter and year ended April 2, 2023, we reclassified foreign exchange losses of $0.4m and $12.1m, respectively. For the year ended April 3, 2022, we reclassified foreign exchange losses of $2.8m. This reclassification did not impact net income, earnings per share, or the consolidated statement of financial position in the comparative periods.

For the year ended March 31, 2024, the Company amended the allocation basis for certain SG&A expenses between the operating segments to provide more relevant information on financial performance of each operating segment. The reclassification did not impact net income, earnings per share, or the consolidated statements of financial position in the comparative year. Comparative figures have been reclassified to conform with the current year presentation.

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. We continue to monitor these conditions and their potential impact on our ability to achieve positive comparable sales growth in our DTC channel.
• Wholesale. We plan to increasingly control our distribution through progressively shifting sales from our wholesale channel to our DTC channel.
• New Products. We intend to continue investing in design, innovation and the development and introduction of new products, including talent development, as well as expand offerings in our existing product categories, across styles, uses, and climates.
• Inflationary Environment. Inflationary pressures may persist in future fiscal periods and may fluctuate materially between markets. Such pressures may, among other impacts globally, have an adverse effect on our ability to maintain current gross margin and SG&A expenses as a percentage of revenue. Elevated interest rates may impact our business, including borrowing and other costs, and the markets in which we operate. In addition, inflationary pressures may affect the amount of discretionary income available for certain customers to purchase our products.
• Macroeconomic Conditions. We are subject to risks and exposures from the evolving macroeconomic environment, including supply chain disruptions, economic uncertainty, customer budgetary constraints, inflation, and resulting fears of potential economic slowdowns or recessions, all of which may negatively impact consumer demand for our products. We continuously monitor the direct and indirect impacts of these circumstances on our business and financial results.

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• Seasonality. We experience seasonal fluctuations in our revenue and operating results and have historically realized a significant portion of our annual wholesale revenue during our second and third fiscal quarters, and our annual DTC revenue in our third and fourth fiscal quarters. We generated 78.1%, 78.9% and 82.5% of our annual wholesale revenue in the combined second and third fiscal quarters of fiscal 2024, fiscal 2023, and fiscal 2022, respectively. Additionally, we generated 82.6%, 83.9% and 85.0% of our annual DTC revenue in the combined third and fourth fiscal quarters of fiscal 2024, fiscal 2023, and fiscal 2022, 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 EBIT1 in the first and fourth quarters, respectively. As a result of our seasonality, changes that impact gross margin and adjusted EBIT1 among others can have a disproportionate impact on the quarterly results when they are recorded in our off-peak revenue periods. Business performance can also be impacted by the timing and intensity of cold weather, which may affect purchasing behaviour, including causing earlier or later purchases relative to prior periods, especially in our DTC channel.
  1 Adjusted EBIT is a non-IFRS measure. See "Non-IFRS Financial Measures and Other Specified Financial Measures" for a description of this measure.

Working capital requirements typically increase as inventory builds. We finance these needs through a combination of cash on hand and borrowings on our Revolving Facility, the Mainland China Facilities, and the Japan Facility, 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.

• Global Climate Trends. A portion of our business is 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 of cold-weather events or increasing weather volatility.
• 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 2024, 2023 and 2022, we generated 70.5%, 70.1% and 72.5%, respectively, of our revenue in currencies other than Canadian dollars.
  Refer to "Quantitative and Qualitative Disclosures about Market Risk - Foreign exchange risk" below for more details on foreign exchange.
• 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, international travel, credit markets, logistics and foreign exchange in certain countries and travel corridors.
  We remain concerned about the conflicts in Ukraine and the Middle East and continue to suspend all wholesale and e-Commerce sales to Russia. We also continue to monitor the ongoing conflicts and the impacts on human life.
  We have been, and may in the future be, impacted by widespread protests and other disruptions. To the extent that such disruptions persist, we expect that operations and traffic at our retail stores may be impacted.

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BUSINESS DEVELOPMENTS

Business Combination

On November 1, 2023, a newly incorporated subsidiary of the Company, Paola Confectii Manufacturing Limited ("Paola Confectii"), acquired the business of Paola Confectii SRL, a luxury knitwear manufacturer for total cash consideration of $15.9m. Based in Romania, Paola Confectii SRL has been a trusted partner in manufacturing knitwear for Canada Goose since we launched the category in 2017. This acquisition is expected to enhance product margins and supply control, while deepening in-house product expertise and capability.

In connection with the business combination, subject to the controlling shareholders of Paola Confectii SRL ("PCML Vendors") remaining employees through November 1, 2025, a further amount is payable to the PCML Vendors if certain performance conditions are met based on financial results ("Earn-Out"). The estimated value is calculated as a pre-determined percentage of net equity value, determined as a multiple of EBITDA and EBITDA margin for the fiscal year ending March 30, 2025, subject to a floor, less net debt adjustments. As at the reporting date, the estimated value of the payout was $7.4m. The Company recognized the amount as remuneration for future services to be performed conditional on employment until November 1, 2025, which will be expensed over two years.

Paola Confectii's results of operations have been consolidated with those of the Company from the date of acquisition and are presented in the Other operating segment. The results of Paola Confectii were not significant for the period beginning on the date of acquisition and ended on March 31, 2024, and would not have been either during fiscal 2024 if the acquisition had occurred as of the beginning of the fiscal year.

See "Note 5. Business combination" in our Annual Financial Statements for detailed information on the acquisition of Paola Confectii SRL.

Transformation Program

In fiscal 2023, the Company announced its Transformation Program. This multi-phase program is expected to increase operational efficiencies by optimizing production and procurement, developing people and resources, and focusing on our consumers to allow sustainable growth, profitability and long term value.

• During the first quarter of fiscal 2024, the Company completed the consolidation of one of our manufacturing facilities in Montreal to improve efficiencies in our supply chain.
• During the second quarter of fiscal 2024, the Company reduced its global corporate workforce by approximately 10% to improve efficiencies in the workforce and yield savings in labour costs moving forward.
• On March 26, 2024, the Company undertook a workforce reduction as part of the Transformation Program, to streamline our business, accelerate decision-making, and increase efficiencies across our operating platform impacting approximately 17% of headcount.

SEGMENTS

Our reporting segments align with our sales channels: DTC, Wholesale, and Other. We measure each reportable operating segment's performance based on revenue and operating income.

Our DTC segment includes sales to customers through our directly operated retail stores and our e-Commerce website available across numerous markets, which includes the newly launched recommerce platform Canada Goose Generations, currently available in the United States and Canada.

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Through our Wholesale segment, we sell to a mix of retailers and international distributors, who are partners that have partial or full exclusive territory rights to sell our products to a particular market through their own DTC channels or local wholesalers. The Wholesale segment includes the introduction of travel retail starting in the second quarter ended of fiscal 2024.

The Other segment comprises revenue and costs that are not related to the Company's DTC or Wholesale segments, such as sales to employees, friends and family sales, and results from the newly acquired Paola Confectii business (see "Business Developments" above).

For the fiscal year ended March 31, 2024, the performance measure for our Other segment was revised to exclude corporate general and administrative expenses; these expenses are now presented as a reconciling item to the Company's consolidated operating income. This change in segment reporting was made to improve the understanding of financial performance in the Other segment.

Corporate expenses comprises costs that do not occur through the DTC, Wholesale, or Other segments, including the cost of marketing expenditures to build brand awareness across all segments, management overhead costs in support of manufacturing operations, other corporate costs, and foreign exchange gains and losses not specifically associated with segment operations.

As at March 31, 2024, our DTC segment by geography included the following directly operated permanent retail stores:

					Fiscal 2024
	April 2,	Q1	Q2	Q3	Q4	March 31,
	2023	Additions	Additions	Additions	Additions	2024
Canada	9	-	-	-	-	9
United States	8	2	3	2	1	16
North America	17	2	3	2	1	25
Greater China1	23	-	2	-	1	26
Asia Pacific (excluding	3	-	3	1	1	8
Greater China1)
Asia Pacific	26	-	5	1	2	34
EMEA2	8	1	-	-	-	9
Total permanent stores	51	3	8	3	3	68
					Fiscal 2023
	April 3,	Q1	Q2	Q3	Q4	April 2,
	2022	Additions	Additions	Additions	Additions	2023
Canada	9	-	-	-	-	9
United States	6	-	-	2	-	8
North America	15	-	-	2	-	17
Greater China1	19	1	2	1	-	23
Asia Pacific (excluding	-	1	-	2	-	3
Greater China1)
Asia Pacific	19	2	2	3	-	26
EMEA2	7	-	-	1	-	8
Total permanent stores	41	2	2	6	-	51

1

2

Greater China comprises Mainland China, Hong Kong, Macau, and Taiwan. EMEA comprises Europe, the Middle East, Africa, and Latin America.

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SUMMARY OF FINANCIAL PERFORMANCE

The following table summarizes results of operations for the years ended March 31, 2024, April 2, 2023 and April 3, 2022 and the fourth quarters ended March 31, 2024 and April 2, 2023, and expresses the percentage relationship to revenues of certain financial statement captions. Basis points ("bps") expresses the changes between percentages. See "Results of Operations" for additional details and for the comparison discussions between the years ended March 31, 2024 and April 2, 2023.

For the comparison discussions between the years ended April 2, 2023 and April 3, 2022, please see Item 5. "Operating and Financial Review and Prospects" of our Annual Report on Form 20-F for the year ended April 2, 2023, filed with Canadian securities commissions on SEDAR+ and with the SEC on May 18, 2023. See "Basis of Presentation" for details on impacts of reclassifications on comparative information.

					Year ended			Fourth quarter ended
CAD $ millions (except per share	March 31,		April 2,		April 3,		March 31,		April 2,
data)		2024		2023		2022			2024		2023
Statement of Operations data:			Reclassified	Reclassified				Reclassified
Revenue		1,333.8		1,217.0		1,098.4			358.0		293.2
Gross profit		917.4		815.2		733.6			233.0		190.3
Gross margin		68.8 %		67.0 %		66.8 %			65.1 %		64.9 %
Operating income		124.5		147.6		159.5			23.1		17.6
Net income (loss)		58.1		68.9		94.6			7.6		(10.0)
Net income (loss) attributable to		58.4		72.7		94.6			5.0		(3.1)
shareholders of the Company
Earnings (loss) per share
attributable to shareholders of
the Company
Basic	$	0.58	$	0.69	$	0.87	$	0.05	$	(0.03)
Diluted1	$	0.57	$	0.69	$	0.87	$	0.05	$	(0.03)

1. Subordinate voting shares issuable on exercise of stock options are not treated as dilutive if including them would decrease the loss per share, or if the weighted average daily closing share price for the period was greater than the exercise price. For the fourth quarter and year ended March 31, 2024, there were 3,904,366 and 3,904,366 shares, respectively (fourth quarter and year ended April 2, 2023 - 643,505 and 2,231,231 shares, respectively) that were not taken into account in the calculation of diluted earnings per share because their effect was anti-dilutive.

CAD $ millions	March 31,		April 2,
2024	2023
Financial Position:
Cash	144.9	286.5
Total assets	1,481.6	1,590.0
Total non-current liabilities	748.2	760.1
Equity	423.5	477.5

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.

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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 of sales that do not occur through DTC or Wholesale segments, including sales to employees, friends and family sales, and results from the newly acquired Paola Confectii business.

Gross Profit

Gross profit is our revenue less cost of sales. Cost of sales comprises the cost associated with manufacturing our products, goods purchased from other manufacturers and bringing products to their place of sale. These include:

Manufacturing costs including raw materials, direct labour, and overhead. 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.

Costs of goods purchased include the cost to source the product at our third party manufacturers, the product cost, freight and duty costs of shipping to our warehouses around the world.

Costs related to bringing products to their place of sale include freight, duty, and non-refundable taxes incurred in delivering the goods to distribution centres managed by third parties or to our retail stores.

Gross margin measures our gross profit as a percentage of revenue.

SG&A Expenses

SG&A expenses are incurred in our operating segments and at the corporate level. 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 other than on manufacturing right-of-use assets and plant assets.

SG&A expenses within our operating segments include:

• Selling costs which generally correlate to revenue timing and would typically experience similar seasonal trends. As a percentage of sales, we expect these selling costs to change as our business evolves. This change has been and is expected to be primarily driven by the expansion of our DTC segment, including the investment required to support e-Commerce sites and retail stores. Retail store costs are mostly fixed and are incurred throughout the year.
• General and administrative expenses which are directly related to our operating segments primarily include personnel costs (including salaries, variable incentive compensation, and benefits), technology support, other professional service costs, and marketing.

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• Depreciation and amortization which 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.

SG&A expenses at the corporate level include:

• General and administrative expenses which generally represent costs incurred in our corporate offices, primarily related to marketing, personnel costs (including salaries, variable incentive compensation, benefits, and share-based compensation), technology support, and other professional service costs. We have invested considerably in this area to support the growing volume and complexity of our business.
• Depreciation and amortization which represent the economic benefit incurred in using corporate property, plant and equipment, intangible assets, and right-of-use assets.

Operating Income and Operating Margin

Operating income is our gross profit less SG&A expenses. Operating margin measures our operating income as a percentage of revenue.

Net Interest, Finance and Other Costs

Net interest, finance and other costs represents interest expense on our borrowings including the Revolving Facility, the Term Loan, the Mainland China Facilities, the Japan Facility, each as defined below, and lease liabilities, as well as standby fees and other financing costs, net of interest income. Net interest, finance and other costs also includes the fair value remeasurements of the contingent consideration, put option liability related to the agreement entered between the Company and Sazaby League to form the Japan Joint Venture ("Joint Venture Agreement"), and foreign exchange gains and losses related to the outstanding principal balance on the Term Loan, net of the impact of hedging which previously was presented in SG&A expenses.

See "Note 5. Business Combination" of the Annual Financial Statements for a description of the put option and contingent consideration under Japan Joint Venture.

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.

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 affect our business, financial condition and operating results.

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