Enhanced Investments - Financial Portal

Published: 2023-02-02

Canada Goose Holdings Inc.
Condensed Consolidated Interim Financial Statements
As at and for the third and three quarters ended
	January 1, 2023 and January 2, 2022
		(Unaudited)

Condensed Consolidated Interim Statements of Income (unaudited)(in mil ions of Canadian dol ars, except per share amounts)
	Third quarter ended	Three quarters ended
				January 1,	January 2,		January 1,	January 2,
			Notes	2023					2022	2023		2022
					Restated			Restated
					(Note 2)			(Note 2)
	$					$				$	$
Revenue			4		576.7					586.1	923.8		875.3
Cost of sales			7		160.3					172.3	298.9		295.8
Gross profit					416.4					413.8	624.9		579.5
Sel ing, general & administrative
expenses					222.1					208.8	506.6		423.7
Operating income					194.3					205.0	118.3		155.8
Net interest, finance and other costs			11		6.0					7.6	20.2		32.0
Income before income taxes					188.3					197.4	98.1		123.8
Income tax expense					50.8					46.1	19.2		20.1
Net income					137.5					151.3	78.9		103.7
Attributable to:
Shareholders of the Company					134.9					151.3	75.8		103.7
Non-control ing interest					2.6					—	3.1		—
Net income					137.5					151.3	78.9		103.7
Earnings per share attributable to
shareholders of the Company
Basic			5	$	1.28 $					1.42 $	0.72 $		0.95
Diluted			5	$	1.28 $					1.40 $	0.72 $		0.94
The accompanying notes to the condensed consolidated interim financial statements are an integral part of these financial statements.
			Canada Goose Holdings Inc.					Page 1 of 37

Condensed Consolidated Interim Statements of Comprehensive Income(unaudited)(in mil ions of Canadian dol ars, except per share amounts)
	Third quarter ended	Three quarters ended
				January 1,	January 2,		January 1,	January 2,
			Notes	2023					2022	2023		2022
					Restated			Restated
					(Note 2)			(Note 2)
	$					$				$	$
Net income					137.5					151.3	78.9		103.7
Other comprehensive income
(loss)Items that wil not be reclassified to
earnings, net of tax:
Actuarial gain on post-
employment obligation					—					—	1.0		0.2
Items that may be reclassified to
earnings, net of tax:
Cumulative translation adjustment
gain (loss)					22.5					(9.9)	10.7		(10.1)
Net (loss) gain on derivatives
designated as cash flow hedges			16		(4.6)					(0.7)	4.5		(2.6)
Reclassification of net loss on
cash flow hedges to income			16		3.4					2.3	4.9		2.8
Other comprehensive income (loss)					21.3					(8.3)	21.1		(9.7)
Comprehensive income					158.8					143.0	100.0		94.0
Attributable to:
Shareholders of the Company					156.6					143.0	96.9		94.0
Non-control ing interest					2.2					—	3.1		—
Comprehensive income					158.8					143.0	100.0		94.0
The accompanying notes to the condensed consolidated interim financial statements are an integral part of these financial statements.
			Canada Goose Holdings Inc.					Page 2 of 37

Condensed Consolidated Interim Statements of Financial Position(unaudited)(in mil ions of Canadian dol ars)
		January 1,		January 2,		April 3,
		2023		2022	2022
				Restated
				(Note 2)
Assets			$		$		$
Current assetsCash
	3								344.2		407.6	287.7
Trade receivables	6								120.9		108.0	42.7
Inventories	3, 7								482.0		368.1	393.3
Income taxes receivable									5.7		0.5	1.1
Other current assets		58.3		38.1	37.5
Total current assets								1,011.1			922.3	762.3
Deferred income taxes									67.7		65.8	53.2
Property, plant and equipment	3								128.5		123.1	114.2
Intangible assets	3								132.9		123.8	122.2
Right-of-use assets	3, 8								275.6		241.2	215.2
Goodwil	3								65.0		53.1	53.1
Other long-term assets	15								22.2		8.2	20.4
Total assets								1,703.0		1,537.5		1,340.6
LiabilitiesCurrent liabilitiesAccounts payable and accrued liabilities
		262.0		244.5	176.2
Provisions	10								46.6		43.2	18.5
Income taxes payable									31.8		36.9	24.5
Short-term borrowings		52.4		3.8	3.8
Current portion of lease liabilities	3, 8								66.6		61.7	58.5
Total current liabilities									459.4		390.1	281.5
Provisions		36.7		30.5	31.3
Deferred income taxes									22.2		13.2	15.8
Term loan		393.4		370.8	366.2
Lease liabilities	3, 8								250.3		208.5	192.2
Other long-term liabilities	3, 15								42.9		22.5	25.7
Total liabilities								1,204.9		1,035.6		912.7
EquityEquity attributable to shareholders of the
Company									484.1		501.9	427.9
Non-control ing interests								14.0		—		—
Total equity									498.1		501.9	427.9
Total liabilities and equity								1,703.0		1,537.5		1,340.6
The accompanying notes to the condensed consolidated interim financial statements are an integral part of these financial statements.
									Canada Goose Holdings Inc.	Page 3 of 37

Condensed Consolidated Interim Statements of Changes in Equity(unaudited) (in mil ions of Canadian dol ars)
				Accumulated
					other	Total		Non-
		Contributed	Retained	comprehensive			attributable to		controlling
	Share capital	surplus	earnings	(loss) income			shareholders	interest		Total
												Multiple	Subordinate
												voting	voting
											Notes	shares	shares								Total
													$	$	$	$							$	$	$		$		$
Balance at April 3, 2022													1.4	117.1 118.5										36.2	290.4		(17.2)	427.9		— 427.9
Non-control ing interest on business
combination											3		—	—	—	—							—	—	—		10.9 10.9
Put option for non-control ing interest											3		—	—	—	—	(21.5)	—	(21.5)	— (21.5)
Normal course issuer bid purchase of
subordinate voting shares											12		—	(1.5)								(1.5)	—	(14.6)		—	(16.1)		— (16.1)
Normal course issuer bid purchase of
subordinate voting shares held for cancel ation											12		—	(0.2)								(0.2)	—	(1.6)		—	(1.8)		— (1.8)
Liability to broker under automatic share
purchase plan											12		—	—	—									(12.5)	—	—	(12.5)		— (12.5)
Issuance of shares											12		—	2.7								2.7		(2.7)	—	—	—		—		—
Net income													—	—	—	—	75.8	—	75.8	3.1 78.9
Other comprehensive income													—	—	—	—							—	21.1	21.1		— 21.1
Share-based payment											13		—	—	—									11.2	—	—	11.2		— 11.2
Balance at January 1, 2023													1.4	118.1 119.5										32.2	328.5		3.9	484.1		14.0 498.1
Balance at March 28, 20211													1.4	119.1 120.5										25.2	437.1		(5.2)	577.6		— 577.6
Normal course issuer bid purchase of
subordinate voting shares											12		—	(8.0)								(8.0)	—	(179.3)		—	(187.3)		— (187.3)
Issuance of shares											12		—	9.9								9.9		(2.8)	—	—	7.1		—		7.1
Net income1													—	—	—	—	103.7	—	103.7	— 103.7
Other comprehensive loss1													—	—	—	—							—	(9.7)	(9.7)		— (9.7)
Share-based payment											13		—	—	—									10.7	—	—	10.7		— 10.7
Deferred tax on share-based payment													—	—	—									(0.2)	—	—	(0.2)		— (0.2)
Balance at January 2, 20221													1.4	121.0 122.4										32.9	361.5		(14.9)	501.9		— 501.9
1	The Company adopted a change in accounting policy for the year ended April 3, 2022, 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 on the comparative period.
The accompanying notes to the condensed consolidated interim financial statements are an integral part of these financial statements.
													Canada Goose Holdings Inc.	Page 4 of 37

Condensed Consolidated Interim Statements of Cash Flows(unaudited)(in mil ions of Canadian dol ars)
	Third quarter ended	Three quarters ended
				January 1,	January 2,	January 1,					January 2,
			2023					2022	2023				2022
					Restated		Restated
					(Note 2)		(Note 2)
	$					$	$					$
Operating activitiesNet income
					137.5				151.3	78.9			103.7
Items not affecting cash:
Depreciation and amortization				27.0					26.3	79.2				70.0
Income tax expense				50.8					46.1	19.2				20.1
Interest expense			11	8.7					6.9	24.9				21.0
Foreign exchange (gain) loss				(14.9)					(2.2)	4.3				5.9
Acceleration of unamortized costs on debt extinguishment			11	—					—	—				9.5
Loss (gain) on disposal of assets				—					0.1	(0.1)				0.1
Share-based payment			13	4.2					3.8	11.2				10.7
Remeasurement of put option			3	(0.5)					—	1.2				—
Remeasurement of contingent consideration			3	(2.2)					—	(5.9)				—
					210.6				232.3	212.9			241.0
Changes in non-cash operating items				154.6				143.1	(48.1)				(24.0)
Income taxes paid				(5.6)					(5.9)	(31.9)				(18.1)
Interest paid				(8.6)					(11.0)	(23.6)				(24.7)
Net cash from operating activities					351.0				358.5	109.3			174.2
Investing activitiesPurchase of property, plant and equipment
				(12.6)					(8.7)	(22.9)				(22.5)
Investment in intangible assets				(0.2)					—	(0.9)				(1.6)
Initial direct costs of right-of-use assets			8	—					(0.3)	(0.4)				(0.8)
Net cash inflow from business combination			3	—					—	2.8				—
Net cash used in investing activities				(12.8)					(9.0)	(21.4)				(24.9)
Financing activitiesMainland China Facilities (repayments) borrowings
			11	(8.4)					(23.5)	15.7				—
Japan Facility borrowings			3, 11	3.4					—	13.1				—
Term loan repayments			11	(1.0)					(1.9)	(3.0)				(3.8)
Revolving facility repayments			11	(55.9)					—	(0.5)				—
Transaction costs on financing activities			11	—					—	—				(0.9)
Subordinate voting shares purchased and cancel ed under			12
NCIB					(16.1)					(10.4)	(16.1)			(187.3)
Subordinate voting shares purchased and held for			12
cancel ation under NCIB				—					2.7	—				—
Principal payments on lease liabilities			8	(17.2)					(13.2)	(44.5)				(32.8)
Issuance of shares			13	—					1.3	—				7.1
Net cash used in financing activities					(95.2)					(45.0)	(35.3)			(217.7)
Effects of foreign currency exchange rate changes on cash				4.1					4.2	3.9				(1.9)
Increase (decrease) in cash					247.1				308.7	56.5				(70.3)
Cash, beginning of period					97.1					98.9	287.7			477.9
Cash, end of period					344.2				407.6	344.2			407.6
The accompanying notes to the condensed consolidated interim financial statements are an integral part of these financial statements.
									Canada Goose Holdings Inc.	Page 5 of 37

		Notes to the Condensed Consolidated Interim Financial Statements(unaudited)
Note 1.	The Company
Organization
Canada Goose Holdings Inc. and its subsidiaries (the “Company”) design, manufacture, and sel performance luxury apparel for men, women, youth, children, and babies. The Company’s product offerings include various styles of parkas, lightweight down jackets, rainwear, windwear, apparel, fleece, footwear, and accessories for the fal , winter, and spring seasons. The Company’s head office is located at 250 Bowie Avenue, Toronto, Canada M6E 4Y2. The use of the terms “Canada Goose”, “we”, and “our” throughout these notes to the condensed consolidated interim financial statements ("Interim Financial Statements") refer to the Company.
Canada Goose is a public company listed on the Toronto Stock Exchange and the New York Stock Exchange under the trading symbol “GOOS”. The principal shareholders of the Company are investment funds advised by Bain Capital LP and its affiliates (“Bain Capital”), and DTR LLC ("DTR"), an entity indirectly control ed by the Chairman and Chief Executive Officer of the Company. The principal shareholders hold multiple voting shares representing 48.8% of the total shares outstanding as at January 1, 2023, or 90.5% of the combined voting power of the total voting shares outstanding. Subordinate voting shares that trade on public markets represent 51.2% of the total shares outstanding as at January 1, 2023, or 9.5% of the combined voting power of the total voting shares outstanding.
Statement of compliance
The Interim Financial Statements are prepared in accordance with International Accounting Standard (“IAS”) 34, Interim Financial Reporting, as issued by the International Accounting Standards Board (“IASB”). Certain information, which is considered material to the understanding of the Interim Financial Statements and is normal y included in the Annual Financial Statements prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the IASB, is not provided in these notes. These Interim Financial Statements should be read in conjunction with the Company's Annual Financial Statements for the year ended April 3, 2022.
The Interim Financial Statements were authorized for issuance in accordance with a resolution of the Company’s Board of Directors on February 1, 2023.
Seasonality
Our business is seasonal, and we have historical y realized a significant portion of our Wholesale revenue and operating income in the second and third quarters of the fiscal year and Direct-to-Consumer ("DTC") revenue and operating income in the third and fourth quarters of the fiscal year. Thus, lower-than-expected revenue in these periods could have an adverse impact on our annual operating results.
Cash flows from operating activities are typical y highest in the third and fourth quarters of the fiscal year due to revenue from the DTC segment and the col ection of trade receivables from Wholesale revenue earlier in the year. Working capital requirements typical y increase as inventory builds.
			Canada Goose Holdings Inc.	Page 6 of 37

		Notes to the Condensed Consolidated Interim Financial Statements(unaudited)
Note 2.	Significant accounting policies and critical accounting estimates and
judgments
Basis of presentation
The significant accounting policies and critical accounting estimates and judgments as disclosed in the Company's Annual Financial Statements for the year ended April 3, 2022 have been applied consistently in the preparation of these Interim Financial Statements except as noted below. The Interim Financial Statements are presented in Canadian dol ars, the Company’s functional and presentation currency.
The Company's fiscal year is a 52 or 53-week reporting cycle with the fiscal year ending on the Sunday closest to March 31. Each fiscal quarter is 13 weeks for a 52-week fiscal year. Fiscal 2023 is a 52-week fiscal year. Fiscal 2022 was 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.
Management identified an immaterial reclassification in the interim statement of cash flows and related note disclosure for the second and two quarters ended October 2, 2022 increasing cash outflows from investing activities and decreasing cash outflows from operating activities of $7.0m due to translation of foreign currency. The reclassification has been appropriately reflected in the interim statement of cash flows and related note disclosure for the third and three quarters ended January 1, 2023.
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 sel ing, general, and administrative ("SG&A") expenses.
COVID-19 pandemic
Global y, public health officials have imposed restrictions and recommended precautions to mitigate the spread of the novel coronavirus pandemic ("COVID-19"). While restrictions have been lifted across al geographies with the exception of the Asia Pacific region, we continue to be impacted to some extent. In the third quarter of fiscal 2023, store operations were negatively impacted in the Asia Pacific region by COVID-19 related restrictions resulting in store closures, reduced hours, and significantly lower retail traffic.
As a result of the temporary store closures, net costs of $0.8m and $3.3m were recognized in SG&A expenses and net interest, finance and other costs during the third and three quarters ended January 1, 2023, respectively (third and three quarters ended January 2, 2022 - $nil and $0.2m, respectively).
Management assessed whether indicators of impairment existed as at January 1, 2023 in accordance with IAS 36, Impairment of Assets. Management has identified indicators of impairment as at January 1, 2023, however based on the analysis performed, no impairment charges or reversals have been recorded in the three quarters ended January 1, 2023.
Principles of consolidation
The Interim Financial Statements include the accounts of the Company and its subsidiaries and those investments over which the Company has control. Al intercompany transactions and balances have been eliminated.
			Canada Goose Holdings Inc.	Page 7 of 37

	Notes to the Condensed Consolidated Interim Financial Statements(unaudited)
Operating segments
The Company classifies its business in three operating and reportable segments: DTC, Wholesale, and Other. The DTC segment comprises sales through country-specific e-Commerce platforms and our Company-operated retail stores located in luxury shopping locations.
The Wholesale segment comprises sales made to a mix of retailers and international distributors, who are partners that have exclusive rights to an entire market.
The Other segment comprises sales and costs not directly al ocated to the DTC or Wholesale channels, including sales to employees and SG&A expenses. The Other segment includes the cost of marketing expenditures to build brand awareness across al segments, corporate costs in support of manufacturing operations, other corporate costs, and foreign exchange gains and losses not specifical y associated with DTC or Wholesale segment operations.
Summary of accounting policies adopted
Non-controlling interest
In connection with the Japan Joint Venture (refer to note 3), a non-control ing interest accounting policy was adopted. At the date of acquisition, the Company elected to measure the non-control ing interest for the Japan Joint Venture based on the proportionate share of the acquiree's identifiable net assets. Transactions with non-control ing interests are treated as transactions with equity owners of the Company. Changes in the Company's ownership interest of CG Japan (refer to note 3) are accounted for as equity transactions.
Financial instruments
In connection with the Japan Joint Venture (refer to note 3), the Company established a financial liability for the put option in respect of non-control ing interests based on the present value of the amount expected to be paid to the non-control ing shareholder if exercised. Subsequently, the put option liability is adjusted to reflect changes in the present value of the amount that could be required to be paid at each reporting date, with fluctuations being recorded within the interim statements of income, until it is exercised or expires. The put option is measured at fair value through profit or loss and the fair value of the put option is classified as Level 3 in accordance with IFRS 13, Fair value measurement.
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 wil be adopted in the Company’s accounting policies 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 wil 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. On October 31, 2022, the IASB issued Non-
		Canada Goose Holdings Inc.	Page 8 of 37

											Notes to the Condensed Consolidated Interim Financial Statements(unaudited)
Current Liabilities with Covenants (Amendments to IAS 1). These amendments specify that covenants to be complied with after the reporting date do not affect the classification of debt as current or non-current at the reporting date. The amendment is effective for annual reporting periods beginning on or after January 1, 2024. 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 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 ("IAS 8"). 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 interim financial statements. Refer to the Company's Annual Financial Statements for the year ended April 3, 2022 for information on the opening balance sheet as a result of the retrospective application. The fol owing tables outline the impacts of the restatements on the comparative periods:
Condensed Comprehensive Income Information
Increase (decrease)
	January 2, 2022
		Third quarter ended	Three quarters ended
				As		As
					previously		previously
					reported Adjustments Restated		reported Adjustments Restated
				$				$	$	$				$	$
SG&A expenses						207.9				0.9	208.8	423.0	0.7				423.7
Income tax expense						46.4				(0.3)	46.1	20.3	(0.2)			20.1
Net income						151.9				(0.6)	151.3	104.2	(0.5)				103.7
Cumulative translation
adjustment						(9.9)				—	(9.9)	(10.1)	—			(10.1)
		Canada Goose Holdings Inc.							Page 9 of 37

													Notes to the Condensed Consolidated Interim Financial Statements(unaudited)
Condensed Financial Position Information
Increase (decrease)
	January 2, 2022
		As previously
			reported	Adjustments	Restated
						$	$	$
Deferred income taxes (asset)										64.1				1.7	65.8
Intangible assets										154.7				(30.9)	123.8
Deferred income taxes (liability)										19.4				(6.2)	13.2
Equity										524.9				(23.0)	501.9
Condensed Cash Flow Information
Increase (decrease)
	January 2, 2022
		Third quarter ended					Three quarters ended
									As		As
										previously	previously
										reported Adjustments Restated	reported Adjustments Restated
									$	$			$	$	$				$
Net income												151.9	(0.6)			151.3	104.2	(0.5)		103.7
Depreciation and
amortization												27.2	(0.9)			26.3			76.5	(6.5)	70.0
Income tax expense												46.4	(0.3)			46.1			20.3	(0.2)	20.1
Changes in non-cash
items												144.4	(1.3)			143.1	(25.0)	1.0		(24.0)
Investment in
intangible assets												(3.1)	3.1			—			(7.8)	6.2		(1.6)
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, al owing 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 al ows 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 facility at a net book value of $397.5m, is impacted by the IBOR reform. As such, the reformed
									Canada Goose Holdings Inc.	Page 10 of 37

		Notes to the Condensed Consolidated Interim Financial Statements(unaudited)
IFRS guidance has been adopted, however, accounting under the adopted standard wil 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 January 1, 2023. The Company is in discussions with its lenders and is currently determining if any modifications wil meet the requirements for the application of the practical expedient.
Note 3.	Business combination
The Company and a former distributor of the Company's products in Japan, Sazaby League, Ltd. ("Sazaby League"), entered into an agreement (the "Joint Venture Agreement") to form a joint venture (the “Japan Joint Venture”) pursuant to which the Company acquired 50% of the issued and outstanding voting shares of the legal entity comprising the joint venture, Canada Goose Japan, K.K. (“CG Japan”), on April 4, 2022. CG Japan was established to market, distribute and sel Canada Goose products, and to operate retail stores and e-Commerce in Japan. Prior to the establishment of CG Japan, the Company sold its products to the former distributor. The majority of sales historical y occurred in the first and second quarters and were recorded in the Wholesale operating segment. Subsequent to the transaction, the Company wil consolidate the results of CG Japan and revenue and results of operations wil be aligned to the respective operating segments and are expected to occur more in line with the seasonality of the Company's Wholesale and DTC segments.Management performed an analysis under IFRS 10, Consolidated Financial Statements and since the Company has the power to direct the relevant activities of CG Japan, is exposed to variable returns, and can use its power to influence those returns, management determined that the Company has control over CG Japan for accounting purposes. In addition, management performed an analysis under IFRS 3, Business Combinations and has determined that the Company is the acquirer of CG Japan. Management determined that the assets and processes acquired comprised a business and therefore, accounted for the transaction as a business combination using the acquisition method of accounting. Under the acquisition method, assets and liabilities of the acquiree are recorded at their fair values.The Company paid cash consideration to CG Japan of JPY250.0m ($2.6m) plus deferred contingent consideration to the non-control ing shareholder with an estimated fair value of JPY1,958.9m ($20.0m) resulting in total consideration of JPY2,208.9m ($22.6m). The deferred contingent consideration is payable if an agreed cumulative adjusted EBIT target is not reached through the period ended June 30, 2026. The fair value of the applicable contingent consideration is determined based on the estimated financial outcome and the resulting expected contingent consideration to be paid, discounted using an appropriate rate. As at April 4, 2022, the contingent consideration amount was recorded in other long-term liabilities. The amount of contingent consideration is remeasured at its fair value each reporting period, with changes in fair value recorded in the consolidated statement of income and comprehensive income. The Company recorded a decrease of JPY215.7m ($2.2m, excluding translation losses of $1.2m) and JPY603.9m ($5.9m, excluding translation gains of $0.1m) on the remeasurement of the contingent consideration during the third and three quarters ended January 1, 2023, respectively, resulting in the fair value of the contingent consideration of JPY1,355.0m ($14.0m). For the third and three quarters ended January 1, 2023, the gains on the fair value remeasurement were recorded within net interest, finance and other costs in the consolidated interim statements of income.The Company incurred $0.1m and $1.1m, in transaction related costs which are included in SG&A expenses in the consolidated interim statements of income and consolidated interim
			Canada Goose Holdings Inc.	Page 11 of 37

			Notes to the Condensed Consolidated Interim Financial Statements(unaudited)
statements of	comprehensive income for the third and three quarters ended January 1, 2023,
respectively. For the year ended April 3, 2022, the Company incurred $0.7m in transaction related costs.Assets acquired and liabilities assumed have been recorded based on a preliminary valuation at their fair values at the date of acquisition as fol ows:
		$
Assets acquiredCash
		5.4
Inventories		27.3
Property, plant and equipment		1.2
Intangible assets		12.1
Right-of-use assets		3.3
Goodwil		11.8
Other assets		2.4
		63.5
Liabilities assumedBank loan
		19.4
Lease liabilities		3.2
Warranty provision		0.3
		22.9
Total identifiable net assets acquired		40.6
Less: Deferred tax liability		7.2
Less: Non-control ing interests		10.8
Net assets acquired		22.6
ConsiderationCash paid
		2.6
Contingent consideration		20.0
Total purchase consideration		22.6
Cash consideration paid			(2.6)
Plus: Cash balance acquired			5.4
Net cash inflow on business combination			2.8
The determination of the fair value of assets acquired and liabilities assumed is based on preliminary estimates and certain assumptions with respect to the fair values of the assets acquired and liabilities assumed and are expected to be finalized within one year of the acquisition.
Goodwil is calculated as the difference between total consideration and the fair value of the net assets acquired and is attributable to expected synergies between CG Japan and the Company’s existing operations. Goodwil of $11.8m was recognized as the excess of the
				Canada Goose Holdings Inc.	Page 12 of 37

	Notes to the Condensed Consolidated Interim Financial Statements(unaudited)
acquisition cost over the fair value of net identifiable assets at the date of acquisition. Goodwil recognized is not expected to be deductible for income tax purposes. Intangible assets of $12.1m relate to the fair value of the customer list and reacquired distribution rights of the Japan market, which wil be amortized over a 10-year period.
The fair value of property, plant and equipment and right-of-use assets was based on management’s assessment of the acquired assets’ condition, as wel as an evaluation of the current market value for such assets. In addition, the Company considered the length of time over which the economic benefit of these assets is expected to be realized and estimated the useful life of such assets as of the acquisition date. The fair value of inventories has been measured at net realizable value, less cost to sel . Final valuations of certain assets and liabilities including inventory, property, plant and equipment, intangible assets, right-of-use assets, other assets and warranty provisions are not yet complete due to the inherent complexity associated with valuations. Therefore, the purchase price al ocation is preliminary and is subject to adjustment upon completion of the valuation process.
CG Japan’s results are consolidated into the Company’s financial results effective April 4, 2022. For the third and three quarters ended January 1, 2023, CG Japan contributed approximately $27.3m and $41.6m to the Company’s consolidated revenue, respectively, and $4.6m and $1.1m to the Company’s operating income, respectively.
In connection with the business combination, the Joint Venture Agreement includes a put option that al ows the non-control ing shareholder to sel its 50% interest to the Company within six months after certain circumstances constituting a "put option trigger" event occurs. If the put option is not exercised during such six-month period the put option wil expire. The Company established a financial liability for the put option in respect of non-control ing interests. The fair value of the put option is classified as Level 3 within IFRS 13, Fair value measurement. As at April 4, 2022, the fair value of the put option held in Japanese yen by the non-control ing shareholder was recorded in other long-term liabilities in the amount of JPY2,076.4m ($21.2m).
The Company recorded the put option liability based on the present value of the amount expected to be paid to the non-control ing shareholder if exercised. Subsequently, the put option liability is adjusted to reflect changes in the present value of the amount that could be required to be paid at each reporting date, with fluctuations being recorded within the Company's consolidated interim statements of income, until it is exercised or expires. The Company recorded a decrease of JPY44.6m ($0.5m, excluding translation losses of $1.8m) and an increase of JPY130.3m ($1.2m, excluding translation losses of $0.4m) on the remeasurement of the put option liability during the third and three quarters ended January 1, 2023, respectively, resulting in a balance of JPY2,206.7m ($22.8m). For the third and three quarters ended January 1, 2023, the gain and loss on the fair value remeasurement, respectively, were recorded within net interest, finance and other costs in the interim statements of income.
		Canada Goose Holdings Inc.	Page 13 of 37

							Notes to the Condensed Consolidated Interim Financial Statements(unaudited)
Note 4.	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 (loss), 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.
		Third quarter ended January 1, 2023
(in millions of Canadian
dollars)DTCWholesaleOtherTotal
			$	$	$	$
Revenue						450.2	114.4		12.1	576.7
Cost of sales						99.1	53.8		7.4	160.3
Gross profit						351.1	60.6		4.7	416.4
SG&A expenses						92.3	21.8		108.0	222.1
Operating income (loss)						258.8	38.8		(103.3)	194.3
Net interest, finance and other
costs							6.0
Income before income taxes							188.3
		Third quarter ended January 2, 2022
(in millions of Canadian
dollars)DTCWholesaleOtherTotal
			$	$	$	$
Revenue						443.7	138.4		4.0	586.1
Cost of sales						101.2	68.9		2.2	172.3
Gross profit						342.5	69.5		1.8	413.8
SG&A expenses						90.1	19.7		99.0	208.8
Operating income (loss)						252.4	49.8		(97.2)	205.0
Net interest, finance and other
costs							7.6
Income before income taxes							197.4
					Canada Goose Holdings Inc.			Page 14 of 37

											Notes to the Condensed Consolidated Interim Financial Statements(unaudited)
Three quarters ended January 1, 2023
	(in millions of Canadian
	dollars)	DTC	Wholesale		Other	Total
		$		$	$	$
	Revenue					579.8	328.3			15.7	923.8
	Cost of sales					130.4	158.8			9.7	298.9
	Gross profit					449.4	169.5			6.0	624.9
	SG&A expenses					184.0			51.0	271.6	506.6
	Operating income (loss)					265.4	118.5			(265.6)	118.3
	Net interest, finance and other
	costs						20.2
	Income before income taxes						98.1
Three quarters ended January 2, 2022
	(in millions of Canadian
	dollars)	DTC	Wholesale		Other	Total
		$		$	$	$
	Revenue					554.8	313.6			6.9	875.3
	Cost of sales					133.0	159.0			3.8	295.8
	Gross profit					421.8	154.6			3.1	579.5
	SG&A expenses					161.6			41.6	220.5	423.7
	Operating income (loss)					260.2	113.0			(217.4)	155.8
	Net interest, finance and other
	costs						32.0
	Income before income taxes						123.8
	Geographic information
	The Company determines the geographic location of revenue based on the location of its customers.
							Third quarter ended	Three quarters ended
	(in millions of Canadian				January 1,			January 2,	January 1,		January 2,
	dollars)				2023	2022			2023	2022
		$		$	$							$
	Canada										109.2	117.2	185.8	174.0
	United States										182.8	164.2	272.7	235.2
	Asia Pacific										167.6	176.8	240.1	258.1
	EMEA1										117.1	127.9	225.2	208.0
	Revenue										576.7	586.1	923.8	875.3
	1	EMEA comprises Europe, the Middle East, Africa, and Latin America.
					Canada Goose Holdings Inc.							Page 15 of 37

										Notes to the Condensed Consolidated Interim Financial Statements(unaudited)
Note 5.	Earnings per share
The fol owing table presents details for the calculation of basic and diluted earnings per share:
		Third quarter ended	Three quarters ended
(in millions of Canadian
dollars, except share and per				January 1,	January 2,		January 1,	January 2,
share amounts)		2023				2022	2023					2022
Net income attributable to
shareholders of the Company $		134.9 $				151.3 $	75.8 $					103.7
Weighted average number of
multiple and subordinate voting
shares outstanding				105,146,788 106,915,147 105,238,509 108,999,722
Weighted average number of
shares on exercise of stock
options and RSUs1					521,820			925,848	539,842				970,234
Diluted weighted average
number of multiple and
subordinate voting shares
outstanding				105,668,608 107,840,995 105,778,351 109,969,956
Earnings per share
attributable to shareholders of
the Company
Basic				$	1.28 $				1.42 $	0.72 $				0.95
Diluted				$	1.28 $				1.40 $	0.72 $				0.94
1	Applicable to dilutive shares and when the weighted average daily closing share price for the year was greater than the exercise price for stock options. For the third and three quarters ended January 1, 2023, there were 3,791,027 and 2,256,738 shares, respectively, (third and three quarters ended January 2, 2022 - 558,438 and 558,438 shares, respectively) that were not taken into account in the calculation of diluted earnings per share because their effect was anti-dilutive.
Note 6.	Trade receivables
					January 1,		January 2,	April 3,
(in millions of Canadian dollars)					2023	2022					2022
						$	$					$
Trade accounts receivable					103.3	83.2					22.0
Credit card receivables						5.8	12.7					2.5
Other receivables					13.5	13.3					19.3
					122.6	109.2					43.8
Less: expected credit loss and sales
al owances					(1.7)	(1.2)					(1.1)
Trade receivables					120.9	108.0					42.7
				Canada Goose Holdings Inc.				Page 16 of 37

											Notes to the Condensed Consolidated Interim Financial Statements(unaudited)
Note 7.	Inventories
		January 1,		January 2,		April 3,
(in millions of Canadian dollars)			2023		2022	2022
			$		$		$
Raw materials									71.3		75.4	71.3
Work in progress									15.4		17.0	14.9
Finished goods									395.3		275.7	307.1
Total inventories at the lower of cost
and net realizable value									482.0		368.1	393.3
Inventories are written down to net realizable value when the cost of inventories is estimated to be unrecoverable due to obsolescence, damage, or declining rate of sale. As at January 1, 2023, the provision for obsolescence amounted to $32.7m (January 2, 2022 - $21.4m, April 3, 2022 - $23.6m).
Amounts charged to cost of sales comprise the fol owing:
								Third quarter ended	Three quarters ended
(in millions of Canadian									January 1,	January 2,		January 1,		January 2,
dollars)								2023	2022		2023	2022
								$		$	$		$
Cost of goods manufactured										157.9	168.9		291.8	285.3
Depreciation and amortization										2.4		3.4	7.1	10.5
										160.3	172.3		298.9	295.8
									Canada Goose Holdings Inc.	Page 17 of 37

										Notes to the Condensed Consolidated Interim Financial Statements(unaudited)
Note 8.	Leases
Right-of-use assets
The fol owing table presents changes in the cost and the accumulated depreciation of the Company’s right-of-use assets:
(in millions of Canadian			Manufacturing
dollars)		Retail stores		facilities	Other	Total
Cost			$				$	$	$
April 3, 2022									296.3	36.7	17.4	350.4
Additions									46.5	6.2	42.3	95.0
Additions from business
combinations (note 3)									1.5	—	1.8	3.3
Lease modifications									2.4	—	—	2.4
Derecognition on
termination									(1.8)	—	—	(1.8)
Impact of foreign currency
translation									14.6	—	0.7	15.3
January 1, 2023									359.5	42.9	62.2	464.6
March 28, 2021									253.3	36.7	18.4	308.4
Additions									49.0	—	0.4	49.4
Lease modifications									1.9	—	(1.2)	0.7
Impact of foreign currency
translation									(1.0)	—	—	(1.0)
January 2, 2022									303.2	36.7	17.6	357.5
									Canada Goose Holdings Inc.		Page 18 of 37

									Notes to the Condensed Consolidated Interim Financial Statements(unaudited)
(in millions of Canadian		Manufacturing
dollars)	Retail stores		facilities	Other	Total
Accumulated
depreciation		$				$	$	$
April 3, 2022								110.1	15.2	9.9	135.2
Depreciation								40.3	3.7	5.2	49.2
Derecognition on
termination								(1.2)	—	—	(1.2)
Impact of foreign currency
translation								5.4	—	0.4	5.8
January 1, 2023								154.6	18.9	15.5	189.0
March 28, 2021								58.8	9.9	6.0	74.7
Depreciation								34.6	4.0	3.0	41.6
Impact of foreign currency
translation		—				—	—	—
January 2, 2022								93.4	13.9	9.0	116.3
Net book valueJanuary 1, 2023
								204.9	24.0	46.7	275.6
January 2, 2022								209.8	22.8	8.6	241.2
April 3, 2022								186.2	21.5	7.5	215.2
								Canada Goose Holdings Inc.		Page 19 of 37

									Notes to the Condensed Consolidated Interim Financial Statements(unaudited)
Lease liabilities
The fol owing table presents the changes in the Company's lease liabilities:
(in millions of Canadian		Manufacturing
dollars)	Retail stores		facilities	Other	Total
		$				$	$	$
April 3, 2022								217.2	24.8	8.7	250.7
Additions								46.1	6.2	42.3	94.6
Additions from business
combinations (note 3)								1.5	—	1.7	3.2
Lease modifications								2.4	—	—	2.4
Derecognition on
termination								(0.7)	—	—	(0.7)
Principal payments								(38.8)	(3.9)	(1.8)	(44.5)
Impact of foreign currency
translation								10.8	—	0.4	11.2
January 1, 2023								238.5	27.1	51.3	316.9
March 28, 2021								211.0	29.9	13.9	254.8
Additions								48.2	—	0.4	48.6
Lease modifications								1.8	—	(1.2)	0.6
Principal payments								(25.8)	(4.0)	(3.0)	(32.8)
Impact of foreign currency
translation								(1.0)	—	—	(1.0)
January 2, 2022								234.2	25.9	10.1	270.2
								Canada Goose Holdings Inc.		Page 20 of 37

											Notes to the Condensed Consolidated Interim Financial Statements(unaudited)
Lease liabilities are classified as current and non-current liabilities as fol ows:
(in millions of Canadian		Manufacturing
dollars)	Retail stores		facilities	Other	Total
		$				$	$	$
Current lease liabilities								56.1	5.7	4.8	66.6
Non-current lease liabilities								182.4	21.4	46.5	250.3
January 1, 2023								238.5	27.1	51.3	316.9
Current lease liabilities								52.5	5.0	4.2	61.7
Non-current lease liabilities								181.7	20.9	5.9	208.5
January 2, 2022								234.2	25.9	10.1	270.2
Current lease liabilities								49.7	5.8	3.0	58.5
Non-current lease liabilities								167.5	19.0	5.7	192.2
April 3, 2022								217.2	24.8	8.7	250.7
Leases of low-value assets and short-term leases are not included in the calculation of lease liabilities. These lease expenses, as wel as variable rent payments, are recognized in cost of sales or SG&A expenses on a straight-line or other systematic basis.
For the third and three quarters ended January 1, 2023, $11.3m and $14.0m of lease payments, respectively, were not included in the measurement of lease liabilities (third and three quarters ended January 2, 2022 - $14.3m and $16.4m, respectively). The majority of these balances related to short-term leases and variable rent payments.
Note 9.									Accounts payable and accrued liabilities
Accounts payable and accrued liabilities consist of the fol owing:
		January 1,								January 2,	April 3,
(in millions of Canadian dollars)			2023	2022	2022
						$	$	$
Trade payables			72.7	71.4	63.9
Accrued liabilities			119.0	103.6	67.0
Employee benefits			24.1	28.1	26.5
Derivative financial instruments						7.4	11.4	10.4
Other payables			38.8	30.0	8.4
Accounts payable and accrued liabilities			262.0	244.5	176.2
								Canada Goose Holdings Inc.				Page 21 of 37

										Notes to the Condensed Consolidated Interim Financial Statements(unaudited)
Note 10.	Provisions
Provisions are classified as current and non-current liabilities based on management's expectations of the timing of settlement, as fol ows:
			Asset
(in millions of Canadian				retirement
dollars)		Warranty Sales returns		obligations	Total
						$	$	$	$
Current provisions										6.0	40.6	—	46.6
Non-current provisions										27.0	—	9.7	36.7
January 1, 2023										33.0	40.6	9.7	83.3
Current provisions										5.8	37.4	—	43.2
Non-current provisions										22.8	—	7.7	30.5
January 2, 2022										28.6	37.4	7.7	73.7
Current provisions										5.6	12.9	—	18.5
Non-current provisions										23.6	—	7.7	31.3
April 3, 2022										29.2	12.9	7.7	49.8
Note 11.	Borrowings
Revolving facility
The Company has an agreement with a syndicate of lenders for a senior secured asset-based 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 substantial y al of its assets as col ateral for the revolving facility. The revolving facility contains financial and non-financial covenants which could impact the Company’s ability to draw funds.
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 January 1, 2023, the Company had repaid al amounts owing on the revolving facility (January 2, 2022 - $nil, April 3, 2022 - $nil). As at January 1, 2023, no interest and administrative fees (January 2, 2022 - $nil, April 3, 2022 - $0.5m) remain outstanding. Deferred financing charges in the amounts of $0.6m (January 2, 2022 - $1.0m, April 3, 2022 - $0.9m) were included in other long-term liabilities. As at and during the three quarters ended January 1, 2023, the Company was in compliance with al covenants.
The Company had unused borrowing capacity available under the revolving facility of $240.0m as at January 1, 2023 (January 2, 2022 - $158.4m, April 3, 2022 - $191.8m).
		Canada Goose Holdings Inc.									Page 22 of 37

							Notes to the Condensed Consolidated Interim Financial Statements(unaudited)
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 dol ars, U.S. dol ars, euros or British pounds sterling, and a swingline commitment for $25.0m. As at January 1, 2023, the Company had letters of credit outstanding under the revolving facility of $1.8m (January 2, 2022 - $4.8m, April 3, 2022 - $4.6m).
Term loan
The Company has a senior secured loan agreement with a syndicate of lenders that is secured on a split col ateral basis alongside the revolving facility. The facility has an aggregate principal amount of USD300.0m, with quarterly repayments of USD0.75m on the principal amount and a maturity date of October 7, 2027. Moreover, the facility has an interest rate of LIBOR plus an applicable margin of 3.50% payable quarterly in arrears and LIBOR may not be less than 0.75%. The Company incurred transaction costs of $0.9m related to the facility which are being amortized using the effective interest rate method over the term to maturity.
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. As at January 1, 2023, the Company had USD294.0m (January 2, 2022 - USD297.0m, April 3, 2022 - USD296.3m) aggregate principal amount outstanding under the term loan. The Company has pledged substantial y al of its assets as col ateral 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 three quarters ended January 1, 2023, the Company was in compliance with al covenants.
As the term loan is denominated in U.S. dol ars, 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 fol ows:
	January 1,		January 2,		April 3,
(in millions of Canadian dollars)		2023		2022	2022
		$		$		$
Term loan							398.2		375.5	370.8
Unamortized portion of deferred transaction
costs							(0.7)		(0.9)	(0.8)
							397.5		374.6	370.0
Mainland China Facilities
A subsidiary of the Company in Mainland China has two uncommitted loan facilities in the aggregate amount of RMB310.0m ($60.9m) ("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 shal not exceed twelve months (including any extension or rol over). The interest rate on each facility is equal to the 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 January 1, 2023, the Company had $15.7m (RMB80.0m) owing on the Mainland China Facilities (January 2, 2022 - $nil (RMBnil), April 3, 2022 - $nil (RMBnil)).
								Canada Goose Holdings Inc.	Page 23 of 37

										Notes to the Condensed Consolidated Interim Financial Statements(unaudited)
Japan Facility
A subsidiary of the Company in Japan has a loan facility in the aggregate amount of JPY4,000.0m ($41.3m) ("Japan Facility") with a floating interest rate of JBA TIBOR plus an applicable margin of 0.3%. The term of the facility is twelve months and each draw on the facility is payable within the term. Proceeds drawn on the Japan Facility are being used to support build up of inventory for peak season sales. As at January 1, 2023, the Company had $32.6m (JPY3,150.0m) owing on the Japan Facility.
Short-term Borrowings
As at January 1, 2023, the Company has short-term borrowings in the amount of $52.4m. Short-term borrowings include $15.7m (January 2, 2022 - $nil, April 3, 2022 - $nil) owing on the Mainland China Facilities, $32.6m (January 2, 2022 - $nil, April 3, 2022 - $nil) owing on the Japan Facility, and $4.1m (January 2, 2022 - $3.8m, April 3, 2022 - $3.8m) for the current portion of the quarterly principal repayments on the term loan. Short-term borrowings are al due within the next 12 months.
Net interest, finance and other costs consist of the fol owing:
	Third quarter ended	Three quarters ended
(in millions of Canadian			January 1,	January 2,		January 1,	January 2,
dollars)	2023				2022	2023					2022
	$				$				$	$
Interest expense
Mainland China Facilities				0.3				0.2	0.5			0.4
Japan Facility				0.1				—	0.1			—
Revolving facility				0.1				0.1	0.9			0.8
Term loan				4.9				4.5	13.8			13.1
Lease liabilities				2.8				2.3	8.2			7.0
Standby fees				0.5				0.4	1.4			1.4
Acceleration of unamortized
costs on debt extinguishment				—				—	—			9.5
Net fair value remeasurement
on the contingent consideration
and put option liability (note 3)				(2.7)				—	(4.7)			—
Interest income				(0.2)				(0.1)	(0.4)			(0.4)
Other costs				0.2				0.2	0.4			0.2
Net interest, finance and other
costs				6.0				7.6	20.2			32.0
			Canada Goose Holdings Inc.				Page 24 of 37

		Notes to the Condensed Consolidated Interim Financial Statements(unaudited)
Note 12.	Shareholders' equity
Share capital transactions for the three quarters ended January 1, 2023
Normal course issuer bid
During the third quarter ended January 1, 2023, the Company has renewed its normal course issuer bid ("NCIB") in relation to its subordinate voting shares. The Company is authorized to make purchases under such NCIB from November 22, 2022 to November 21, 2023, 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 5,421,685 subordinate voting shares, representing approximately 10.0% of the issued and outstanding subordinate voting shares as at November 10, 2022. Purchases wil 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, and wil conform to their regulations. Under the NCIB, the Company is al owed to repurchase daily, through the facilities of the TSX, a maximum of 86,637 subordinate voting shares, representing 25% of the average daily trading volume, as calculated per the TSX rules for the six-month period starting on May 1, 2022 and ending on October 31, 2022.
In connection with the NCIB, the Company also entered 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 periods of the Company. The repurchases made under the ASPP wil be made in accordance with certain purchasing parameters and wil 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 three quarters ended January 1, 2023, the Company purchased 745,381 subordinate voting shares for cancel ation for total cash consideration of $17.9m, of which $1.8m was payable to the designated broker as at the period end. The amount to purchase the subordinate voting shares was charged to share capital, with the remaining $16.2m charged to retained earnings. Of the 745,381 subordinate voting shares purchased, 414,201 were purchased under the ASPP for total cash consideration of $10.0m.
A liability representing the maximum amount that the Company could be required to pay the designated broker under the ASPP was $12.5m as at January 1, 2023. The amount was charged to contributed surplus. Subsequent to the three quarters ended January 1, 2023, the Company purchased an additional 36,400 subordinate voting shares for cancel ation for total cash consideration of $0.9m under the ASPP, and the remaining liability to the designated broker is $nil.
			Canada Goose Holdings Inc.	Page 25 of 37

								Notes to the Condensed Consolidated Interim Financial Statements(unaudited)
The transactions affecting the issued and outstanding share capital of the Company are described below:
	Multiple voting		Subordinate voting
(in millions of Canadian
		shares		shares	Total
dollars, except share
amounts)Number					$	Number		$	Number	$
April 3, 2022							51,004,076	1.4 54,190,432		117.1 105,194,508 118.5
Purchase of
subordinate voting
shares								—			— (670,080)	(1.5)		(670,080)	(1.5)
Purchase of
subordinate voting
shares held for
cancel ation								—			—	(75,301)	(0.2)		(75,301)	(0.2)
Total share purchases								—			— (745,381)	(1.7)		(745,381)	(1.7)
Exercise of stock
options								—			—	60,248		—	60,248	—
Settlement of RSUs								—			—	87,034	2.7		87,034	2.7
Total share issuances								—			—	147,282	2.7		147,282	2.7
January 1, 2023							51,004,076	1.4 53,592,333		118.1 104,596,409 119.5
Share capital transactions for the three quarters ended January 2, 2022
Normal course issuer bid
The Company previously maintained another NCIB in relation to its subordinate voting shares. The Company was authorized to make purchases from August 20, 2021 to August 19, 2022, in accordance with the requirements of the TSX. The Board of Directors of the Company had 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 were made during the validity of such NCIB by means of open market transactions on the TSX, the NYSE and one Canadian alternative trading system.
During the three quarters ended January 2, 2022, the Company purchased 3,865,136 subordinate voting shares for cancel ation for total cash consideration of $187.3m and a payable to the designated broker of $nil. The amount to purchase the subordinate voting shares was charged to share capital, with the remaining $179.3m charged to retained earnings.
		Canada Goose Holdings Inc.							Page 26 of 37

													Notes to the Condensed Consolidated Interim Financial Statements(unaudited)
The transactions affecting the issued and outstanding share capital of the Company are described below:
	Multiple voting		Subordinate voting
(in millions of
		shares		shares	Total
Canadian dollars,
except share amounts)	Number					$	Number				$	Number	$
March 28, 2021									51,004,076	1.4 59,435,079 119.1 110,439,155 120.5
Purchase of
subordinate voting
shares										—				— (3,865,136)	(8.0) (3,865,136)	(8.0)
Total share purchases		—				— (3,865,136)	(8.0) (3,865,136)	(8.0)
Exercise of stock
options										—				—	341,799	8.5			341,799	8.5
Settlement of RSUs										—				—			49,968	1.4			49,968	1.4
Total share issuances		—				—	391,767	9.9				391,767	9.9
January 2, 2022									51,004,076	1.4 55,961,710 121.0 106,965,786 122.4
Note 13.											Share-based payments
Stock options
The Company 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. Al 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.
Stock option transactions are as fol ows:
							Three quarters ended
										January 1,		January 2,
				2023	2022
						Weighted	Weighted
						average	average
(in millions of Canadian dollars,						exercise				Number of	exercise					Number of
except share and per share amounts)			price	shares				price	shares
Options outstanding, beginning of
period		$	42.99							2,722,690 $	38.32 2,498,973
Granted to purchase shares		$	24.63							1,580,506 $	48.92	739,420
Exercised		$	0.23							(60,248) $	20.72 (341,799)
Cancel ed		$	41.29							(146,079) $	44.72 (129,007)
Options outstanding, end of period		$	36.60							4,096,869 $	43.03				2,767,587
		Canada Goose Holdings Inc.										Page 27 of 37

							Notes to the Condensed Consolidated Interim Financial Statements(unaudited)
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 wil 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 fol ows:
	Three quarters ended
		January 1,	January 2,
	2023			2022
		Number	Number
RSUs outstanding, beginning of period						215,590	137,117
Granted						209,187	152,320
Settled						(87,034)	(49,968)
Cancel ed						(14,039)	(17,373)
RSUs outstanding, end of period		323,704	222,096
During the second quarter ended October 2, 2022, the Company amended the Omnibus Plan to replenish and increase the number of shares reserved for issuance under the plan by the addition of 5,266,699 subordinate voting shares of the Company.
As at January 1, 2023, subordinate voting shares, to a maximum of 6,584,625 shares, have been reserved for issuance under equity incentive plans to select employees of the Company, with vesting contingent upon meeting the service, performance goals and other conditions of the Omnibus Plan.
Accounting for share-based awards
For the third and three quarters ended January 1, 2023, the Company recorded $4.2m and $11.2m, respectively, as contributed surplus and compensation expense for the vesting of stock options and RSUs (third and three quarters ended January 2, 2022 - $3.8m and $10.7m, respectively). 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 fol ows:
	Three quarters ended
(in millions of Canadian dollars, except share and		January 1,	January 2,
per share amounts)	2023			2022
Weighted average stock price valuation					$	24.63				$	48.92
Weighted average exercise price					$	24.63				$	48.92
Risk-free interest rate	2.52 %			0.44 %
Expected life in years						5						5
Expected dividend yield	— %			— %
Volatility	40 %			40 %
Weighted average fair value of options issued					$	7.86					$	14.36
								Canada Goose Holdings Inc.	Page 28 of 37

		Notes to the Condensed Consolidated Interim Financial Statements(unaudited)
Fair value for RSUs is determined based on the market value of the subordinate voting shares at the time of grant. As at January 1, 2023, the weighted average fair value of the RSUs issued was $24.63 (January 2, 2022 - $48.92).
Note 14.	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 third and three quarters ended January 1, 2023, the Company incurred expenses with related parties of $0.3m and $0.8m, respectively (third and three quarters ended January 2, 2022 - $0.8m and $1.4m, respectively) from companies related to certain shareholders. Balances owing to related parties as at January 1, 2023 were $0.4m (January 2, 2022 - $0.7m, April 3, 2022 - $0.3m).
A lease liability due to the control ing shareholder of the acquired Baffin Inc. business (the "Baffin Vendor") for leased premises was $3.3m as at January 1, 2023 (January 2, 2022 - $4.0m, April 3, 2022 - $3.8m). During the third and three quarters ended January 1, 2023, 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 total ing $0.4m and $1.1m, respectively (third and three quarters ended January 2, 2022 - $0.4m and $1.1m, respectively). No amounts were owing to Baffin entities as at January 1, 2023, January 2, 2022, and April 3, 2022.
Lease liabilities due to the non-control ing shareholder of the Japan Joint Venture, Sazaby League, for leased premises, was $2.8m as at January 1, 2023. During the third and three quarters ended January 1, 2023, the Company incurred principal and interest on lease liabilities, royalty fees, and other operating costs to Sazaby League total ing $1.0m and $3.5m, respectively. Balances owing to Sazaby League as at January 1, 2023 were $0.6m.
Pursuant to the Joint Venture Agreement, during the third and three quarters ended January 1, 2023 the Company sold inventory of $0.7m and $11.9m, respectively, to Sazaby League for repurchase by the Japan Joint Venture for inventory fulfil ment. There was no outstanding receivable from Sazaby League as at January 1, 2023. During the third and three quarters ended January 1, 2023, the Japan Joint Venture repurchased $0.3m and $11.5m, respectively, of inventory from Sazaby League and the Japan Joint Venture recognized a payable to Sazaby League of less than $0.1m as at January 1, 2023 in accounts payable and accrued liabilities. These transactions were measured based on pricing established through the Joint Venture Agreement at market terms and were not recognized as sales transactions.
During the third and three quarters ended January 1, 2023, the Japan Joint Venture sold inventory of $1.1m and $1.2m, respectively, to companies whol y owned by Sazaby League. As at January 1, 2023, the Japan Joint Venture recognized a trade receivable of $0.7m from these companies.
			Canada Goose Holdings Inc.	Page 29 of 37

												Notes to the Condensed Consolidated Interim Financial Statements(unaudited)
Note 15.	Financial instruments and fair value
The fol owing 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:
		January 1,
			2023
							Carrying
(in millions of Canadian dollars)				Level 1	Level 2	Level 3	value Fair value
								$	$	$	$	$
Financial assetsDerivatives included in other
current assets								—	18.9					—	18.9	18.9
Derivatives included in other long-
term assets								—	22.1					—	22.1	22.1
Financial liabilitiesDerivatives included in accounts
payable and accrued liabilities								—	7.4	—	7.4	7.4
Mainland China Facilities								—	—	15.7					15.7	15.7
Japan Facility								—	32.6					—	32.6	32.6
Term loan								—	397.5					—	397.5	432.3
Derivatives included in other long-
term liabilities								—	4.0	—	4.0	4.0
Put option liability included in other
long-term liabilities (note 3)								—	—	22.8					22.8	22.8
Contingent consideration included
in other long-term liabilities (note 3)								—	—	14.0					14.0	14.0
		January 2,
			2022
							Carrying
(in millions of Canadian dollars)				Level 1	Level 2	Level 3	value Fair value
								$	$	$	$	$
Financial assetsDerivatives included in other
current assets								—	5.2	—	5.2	5.2
Derivatives included in other long-
term assets								—	8.2	—	8.2	8.2
Financial liabilitiesDerivatives included in accounts
payable and accrued liabilities								—	11.4					—	11.4	11.4
Derivatives included in other long-
term liabilities								—	21.0					—	21.0	21.0
Term loan								—	374.6					—	374.6	391.3
													Canada Goose Holdings Inc.	Page 30 of 37

												Notes to the Condensed Consolidated Interim Financial Statements(unaudited)
April 3,
2022
					Carrying
	(in millions of Canadian dollars)	Level 1	Level 2	Level 3	value Fair value
						$	$	$	$	$
	Financial assetsDerivatives included in other
	current assets					—	9.5	—	9.5	9.5
	Derivatives included in other long-
	term assets					—	20.4					—	20.4	20.4
	Financial liabilitiesDerivatives included in accounts
	payable and accrued liabilities					—	10.4					—	10.4	10.4
	Derivatives included in other long-
	term liabilities					—	23.1					—	23.1	23.1
	Term loan					—	370.0					—	370.0	386.9
	There were no transfers between the levels of fair value hierarchy.
	Note 16.										Financial risk management objectives and policies
	The Company’s primary risk management objective is to protect the Company’s assets and cash flow, in order to increase the Company’s enterprise value.
	The Company is exposed to capital management risk, liquidity risk, credit risk, market risk, foreign exchange risk, and interest rate risk. The Company’s senior management and Board of Directors oversee the management of these risks. The Board of Directors reviews and agrees upon policies for managing each of these risks which are summarized below.
	Capital management
	The Company manages its capital and capital structure with the objectives of safeguarding sufficient net working capital over the annual operating cycle and providing sufficient financial resources to grow operations to meet long-term consumer demand. The Board of Directors of the Company monitors the Company’s capital management on a regular basis. The Company wil continual y 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 wil not be able to meet its financial obligations as they fal due. The Company’s approach to managing liquidity is to ensure, as far as possible, that it wil 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 Mainland China Facilities and the Japan Facility as sources of funds for short term working capital needs. The Company continuously reviews both actual and forecasted cash flows to ensure that the Company has appropriate capital capacity.
													Canada Goose Holdings Inc.	Page 31 of 37

										Notes to the Condensed Consolidated Interim Financial Statements(unaudited)
The fol owing table summarizes the amount of contractual undiscounted future cash flow requirements as at January 1, 2023:
Contractual obligations by fiscal year Q4 2023	2024	2025	2026	2027	2028 Thereafter	Total
(in millions of Canadian dollars)	$	$	$	$	$	$	$	$
Accounts payable and accrued liabilities 262.0	—	—	—	—	—		— 262.0
Mainland China Facilities									15.7	—	—	—	—	—	— 15.7
Japan Facility									32.6	—	—	—	—	—	— 32.6
Term loan									1.0	4.1	4.1	4.1	4.1 380.8		— 398.2
Interest commitments relating to
borrowings1									8.4 33.3 32.8 32.8 32.8 16.4	— 156.5
Lease obligations									20.6 77.3 71.2 55.6 47.5 35.9	97.8 405.9
Pension obligation									—	—	—	—	—	—	1.1	1.1
Total contractual obligations								340.3 114.7 108.1 92.5 84.4 433.1	98.9 1,272.0
1	Interest commitments are calculated based on the loan balance and the interest rate payable on the Mainland China Facilities, the Japan Facility, and the term loan of 3.85%, 0.38%, and 8.23% respectively, as at January 1, 2023.
As at January 1, 2023, we had additional liabilities which included provisions for warranty, sales returns, asset retirement obligations, deferred income tax liabilities, as wel as the put option liability and the contingent consideration on the Japan Joint Venture. 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 wil 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 wil be used to finance working capital requirements of Canada Goose Inc. 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 January 1, 2023, the Company had $6.4m outstanding.
In addition, a subsidiary of the Company in Mainland China entered into letters of guarantee and as at January 1, 2023 the amount outstanding was $5.4m. Amounts wil be used to support retail operations of such subsidiaries 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 wil 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 wil 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 trade accounts receivable from certain designated customers subject to a total deductible of $0.1m, to a maximum of $30.0m per year. As at January 1, 2023, trade accounts receivable total ing approximately $49.5m (January 2, 2022 -
								Canada Goose Holdings Inc.	Page 32 of 37

	Notes to the Condensed Consolidated Interim Financial Statements(unaudited)
$36.4m, April 3, 2022 - $8.1m) 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 trade accounts receivable credit risk exposure.
Within CG Japan, the Company has an agreement with a third party who has insured the risk of loss for up to 45% of trade accounts receivable for certain designated customers for a maximum of JPY450.0m per annum subject to a deductible of 10% and applicable only to accounts with receivables over JPY100k. As at January 1, 2023, trade accounts receivable total ing approximately $4.1m (JPY392.2m) were insured subject to the policy cap.
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 EUR20.0m in exchange for advanced funding equal to 100% of the principal value of the invoice.
For the three quarters ended January 1, 2023, the Company received total cash proceeds from the sale of trade accounts receivable with carrying values of $37.3m which were derecognized from the Company's statement of financial position (three quarters ended January 2, 2022 - $24.9m). Fees of $0.2m were incurred during the three quarters ended January 1, 2023 (three quarters ended January 2, 2022 - less than $0.1m) and included in net interest, finance and other costs in the interim statements of income. As at January 1, 2023, the outstanding amount of trade accounts receivable derecognized from the Company’s statement of financial position, but which the Company continued to service, was $8.5m (January 2, 2022 - $10.3m, April 3, 2022 - $2.0m).
Market risk
Market risk is the risk that the fair value of future cash flows of a financial instrument wil fluctuate because of changes in market prices. Market prices comprise foreign exchange risk and interest rate risk.
Foreign exchange risk
Foreign exchange risk in operating cash flows
The Company’s Interim Financial Statements are expressed in Canadian dol ars, but a substantial portion of the Company’s revenues, purchases, and expenses are denominated in other currencies, principal y U.S. dol ars, euros, British pounds sterling, Swiss francs, Chinese yuan, Hong Kong dol ars and since the formation of the Japan Joint Venture, Japanese yen. 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. During the second quarter of fiscal 2022, the Company initiated the operating hedge program for the fiscal year ending April 2, 2023. During the third quarter of fiscal 2023, the Company initiated the operating hedge program for the fiscal year ending March 31, 2024.
Revenues and expenses of al foreign operations are translated into Canadian dol ars 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 dol ar, to the extent they are not hedged, wil positively impact operating income and net income by increasing our revenue, while depreciating foreign currencies relative to the Canadian dol ar wil have the opposite impact.
		Canada Goose Holdings Inc.	Page 33 of 37

													Notes to the Condensed Consolidated Interim Financial Statements(unaudited)
The Company recognized the fol owing unrealized losses in the fair value of derivatives designated as cash flow hedges in other comprehensive income:
	Third quarter ended	Three quarters ended
			January 1,		January 2,		January 1,	January 2,
				2023		2022	2023							2022
(in millions of
Canadian	Tax					Tax	Tax							Tax
dollars)										Net loss	recovery Net loss		expense Net loss		recovery Net loss	recovery
			$	$				$	$	$	$						$	$
Forward foreign
exchange
contracts
designated as
cash flow hedges			(2.8)	0.7				(2.8)	(0.2)	(3.0)	0.8						(4.3)	0.3
The Company reclassified the fol owing losses and gains from other comprehensive income on derivatives designated as cash flow hedges to locations in the consolidated interim financial statements described below:
					Third quarter ended	Three quarters ended
	January 1,					January 2,	January 1,	January 2,
(in millions of Canadian dollars)					2023						2022	2023							2022
Loss (gain) from other
comprehensive income					$		$	$							$
Forward foreign exchange
contracts designated as cash flow
hedges
												Revenue					1.4			2.1	4.0	2.0
												SG&A expenses					(0.4)			(0.1)	0.3	(0.2)
												Inventory					0.1			0.2	—	(0.8)
For the third and three quarters ended January 1, 2023, unrealized gains of $6.2m and $4.3m, respectively (third and three quarters ended January 2, 2022 - unrealized gains of $0.2m and $0.4m, respectively) on forward exchange contracts that were not treated as hedges were recognized in SG&A expenses in the interim statements of income.
	Canada Goose Holdings Inc.							Page 34 of 37

Notes to the Condensed Consolidated Interim Financial Statements(unaudited)

Foreign currency forward exchange contracts outstanding as at January 1, 2023 related to operating cash flows were:

(in millions)

Aggregate Amounts

Currency

Forward contract to purchase Canadian dol ars USD

83.1

U.S. dol ars

€

111.8

euros

1,670.9

Japanese yen

Forward contract to sel Canadian dol ars

USD

65.0

U.S. dol ars

€

34.6

euros

Forward contract to purchase euros

CHF

1.5

Swiss francs

CNY

1,020.3

Chinese yuan

29.2 British pounds sterling

HKD

68.2

Hong Kong dol ars

Forward contract to sel euros

CHF

14.7

Swiss francs

CNY

180.0

Chinese yuan

1.1 British pounds sterling

HKD

17.2

Hong Kong dol ars

Foreign exchange risk on borrowings

The Company enters into derivative transactions to hedge a portion of its exposure to interest rate risk and foreign currency exchange risk related to principal and interest payments on the term loan denominated in U.S. dol ars (note 11). The Company also entered into a five-year forward exchange contract by sel ing $368.5m and receiving USD270.0m as measured on the trade date, to fix the foreign exchange risk on a portion of the term loan borrowings.

The Company recognized the fol owing unrealized losses and gains in the fair value of derivatives designated as hedging instruments in other comprehensive income:

Third quarter ended

Three quarters ended

January 1,

January 2,

January 1,

January 2,

2023

2022

2023

2022

(in millions of

Canadian

Tax

dollars)

Net loss

recovery Net gain

expense Net gain

expense

Swaps designated

as cash flow

hedges

(1.8)

0.6

2.1

(0.7)

7.5

(2.6)

1.7

(0.6)

Canada Goose Holdings Inc.

Page 35 of 37

Notes to the Condensed Consolidated Interim Financial Statements(unaudited)

The Company reclassified the fol owing losses from other comprehensive income on derivatives designated as hedging instruments to SG&A expenses:

Third quarter ended

Three quarters ended

January 1,

January 2,

January 1,

January 2,

(in millions of Canadian dollars)

2023

2022

2023

2022

Loss from other comprehensive

income

Swaps designated as cash flow

hedges

0.2

0.6

0.7

For the third and three quarters ended January 1, 2023, an unrealized loss of $4.6m and an unrealized gain of $18.8m, respectively (third and three quarters ended January 2, 2022 - unrealized gains of $0.3m and $0.4m, 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 interim statements of income.

Interest rate risk

The Company is exposed to interest rate risk related to the effect of interest rate changes on the borrowings outstanding under the Mainland China Facilities, Japan Facility, and the term loan, which currently bear interest rates at 3.85%, 0.38%, and 8.23%, respectively.

Based on the weighted average amount of outstanding borrowings, a 1.00% increase in the average interest rate during the three quarters ended January 1, 2023 would have increased interest expense on the Mainland China Facilities and the term loan by $0.1m and $2.9m, respectively (three quarters ended January 2, 2022 - $0.1m and $2.8m, respectively). Correspondingly, a 1.00% increase in the average interest rate would have increased interest expense on our Japan Facility by $0.2m.

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 USD270.0m. The swaps terminate on December 31, 2025. 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 partial y mitigated by interest rate swap hedges. The impact on future interest expense as a result of future changes in interest rates wil depend largely on the gross amount of borrowings at that time.

Canada Goose Holdings Inc.

Page 36 of 37

											Notes to the Condensed Consolidated Interim Financial Statements(unaudited)
Note 17.	Selected cash flow information
Changes in non-cash operating items
		Third quarter ended	Three quarters ended
				January 1,	January 2,		January 1,	January 2,
(in millions of Canadian dollars)		2023				2022	2023					2022
					Restated			Restated
					(Note 2)			(Note 2)
		$				$				$	$
Trade receivables					36.0				2.1	(75.0)			(68.4)
Inventories					35.3				46.1	(60.0)			(28.6)
Other current assets					3.8				12.2	(8.9)			(7.9)
Accounts payable and accrued
liabilities					42.6				56.6	66.9			55.6
Provisions					30.5				27.9	33.9			27.3
Other					6.4				(1.8)	(5.0)			(2.0)
Change in non-cash operating
items					154.6				143.1	(48.1)			(24.0)
				Canada Goose Holdings Inc.				Page 37 of 37