Good morning. My name is Denise, and I'll be your conference operator today. At this time, I'd like to welcome everyone to the Canada Goose third quarter 2019 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press star, then the number one on your telephone keypad. If you'd like to withdraw your question, press the pound key. We ask that you limit yourselves to one question to allow others to ask their questions. If you have further questions, you may queue up again. Thank you. Patrick Bourke, Senior Director, Investor Relations, you may begin your conference.
Thank you. Good morning, and thank you for joining us today. With me are Dani Reiss, President and CEO, and Jonathan Sinclair, EVP and CFO. For today's call, Dani will begin with the highlights of our third quarter performance. Following this, Jonathan will provide details on our financial results and our updated outlook for fiscal 2019. After our prepared remarks, we will take your questions. Before we begin, I would like to inform you that this call, including the Q&A portion, includes forward-looking statements, including plans for our business and our updated outlook for fiscal 2019. Each forward-looking statement made on this call is subject to risks and uncertainties that could cause actual results to differ materially from those projected in such statements. Certain material factors and assumptions were considered and applied in making forward-looking statements.
Additional information regarding these forward-looking statements, factors, and assumptions appears under the heading, "Cautionary Note Regarding Forward-Looking Statements and Risk Factors" in our annual report on Form 20-F, which is filed with the SEC and the Canadian Securities Regulatory Authorities. It is also available in the investor relations section of our website at canadagoose.com, and in the earnings press release that we furnish today under the heading, "Cautionary Note Regarding Forward-Looking Statements." The forward-looking statements made on this call speak only as of today, and we undertake no obligation to update or revise any of these statements. During the call, in order to provide greater transparency regarding Canada Goose's operating performance, we refer to certain non-IFRS measures that involve adjustments to IFRS results.
Any non-IFRS measures presented should not be considered to be an alternative to financial measures required by IFRS and are unlikely to be comparable to non-IFRS measures provided by other companies. Any non-IFRS financial measures referenced on this call are reconciled to the most directly comparable IFRS measures in the table at the end of our earnings press release issued this morning. This is also available on the investor relations sections of our website at canadagoose.com. With that, I will turn the call over to Dani.
Thanks, Patrick. Good morning. Thanks for joining us. Happy Valentine's Day. Fiscal 2019 is shaping up to be another year of amazing results and impressive progress against our strategic vision for building Canada Goose into an enduring brand. I'm really proud that we continue to deliver when and where it matters most. I remain as confident as ever about our long-term success. With our largest quarter now behind us, I am excited to share the highlights and give you some context to our great results. The financials are truly impressive. Despite the law of large numbers, we achieved significantly higher rates of growth off of much larger bases. Revenue increased by 50.2% to CAD 399.3 million, and adjusted EPS grew by 65.5% to CAD 0.96 per diluted share. To put that all into perspective, adjusted EPS in the quarter was larger than our annual figure for all of 2018.
On a global stage, our brand voice and consumer connection have never been stronger. Awareness and affinity are growing in the markets that we are prioritizing, and we have a lot of remaining runway. Our results show that we know intuitively and what research confirms, that we continue to be a highly desired and relevant brand. We are clearly seeing the benefit of all the commercial investments we are making in activation, brand storytelling, and presentation. In opening five new stores, we're continually reminded that bricks are not dead. Across a wide range of markets, all of our openings performed well, and existing stores also continue to deliver strong results. I am very encouraged, but not surprised, by guest feedback showing that we are moving the needle on our high-touch experiences.
Getting this right is critical, and doing it in peak season with high traffic is the ultimate test, and we passed that with flying colors. These great results start with great product. The luxury performance outerwear category continues to evolve with consumers looking to express their style in new ways. As part of this, we're seeing a lot of demand for newness through color in the marketplace, and our fall/winter collection delivered that. Amongst our heritage styles, which continue to grow at very healthy rates, we successfully introduced an expanded palette of seasonal colors and prints, with white and silverbirch styles being particularly sought after. Alongside our core primary colors, we staged the flow of these into the marketplace, which elevated floor diversity and sell-through momentum. Our new Approach Jacket made a big splash with its release on Black Friday.
With inspiration from our history working with legendary Canadian adventurer Laurie Skreslet, it features high visibility neon shades for the mountain in an urban and modern silhouette. At a time when consumers are bombarded with promotional messages and brands are competing on the lowest price, we chose to cut through the noise with a high-impact product moment. With a creative integrated marketing campaign focused on eye-popping experiences at retail, we drove global awareness and fast sell-through at full price on one of the biggest discount shopping days of the year. It is a great example of how we can build demand in ways that very few others can, through an authentic story and product. It's this type of swimming upstream that has driven and will continue to drive our business.
When it comes to product, I've often said that the two of the most powerful aspects of our business model are our foundation of enduring iconic styles and how we are able to innovate around the strength of those styles. By introducing newness in an authentic and measured way, we excite our fans and create demand ahead of supply, and we gradually build into that over time. Ultimately, this is about seeding and developing new generations of hero products to add to the depth and diversity of our already very strong core. One great example of this is our new lightweight down Hybridge Base Jacket, which is designed for a wider range of cold temperatures than the classic Hybridge Lite is. It has been a standout performer in its first year, and we look forward to doubling down on that demand in years to come.
More broadly, lightweight down continues to grow significantly. Its DNA is deeply rooted in what has made us the reference parka, and it appeals to consumers looking for more versatility. We made a concerted effort to drive higher awareness coupled with greater year-round distribution. The results strengthen my conviction that we have an incredible opportunity to continue to lead this category going forward. Alongside great product, both distribution channels continue to raise the bar. As a vertical brand, the breadth and quality of our multi-channel distribution model is so powerful. Our strength across e-commerce, stores, and wholesale is truly unique, and it is grounded in how disciplined, maybe even obsessive, we have been about developing them in a balanced and complementary way. Starting with direct-to-consumer, e-commerce continues to be a driver of our growth.
Our existing sites put in another strong performance. As we expected, Tmall has proven to be the right way to serve our fans online in mainland China. On Singles' Day, we were one of the top 10 brands in our space, despite offering no promotions and having only been on the platform for just over a month. Equally as important, we hit all of our operational and customer service metrics. Overall, on our e-commerce channel, we have also been fine-tuning the degree of localization in their merchandising and marketing, and the initial results have been promising. Moving on to stores, we are now in year three of our journey with 11 company-operated stores across three continents. I remember interacting with customers in our first store in Toronto on opening day, and I could see right then and there that we had a massive opportunity in front of us.
Reflecting back on that, it has certainly delivered on that potential and then some. The common thread that I see in each of our stores is consistency in performance. From local-focused markets like Short Hills and Montreal to global shopping destinations like Hong Kong and London, every single store has delivered exceptional experiences and results. Underlying this is our selective focus, tailored approach, and commitment to continuous improvement. We have been, and will continue to be, exclusively focused on only the best retail opportunities. The results speak for themselves. We are not straying from that approach. The second piece to our retail success is recognizing the importance of localization. While brand consistency is key, we are not taking a cookie-cutter approach to any aspect of our stores. From seeding and activation to store environment and merchandise, we are very focused on leading and executing at a local level.
The last part of the equation is continuous improvement. We are constantly elevating our game, and our stores are an immersive gathering place to interact with our fans and help them find new ways to love Canada Goose. We saw great traction this year with our Generations of Warm holiday photo booths and the introduction of our Cold Rooms, which I am really proud to say, Fast Company called the best retail experience of the year. We are excited to continue innovating on experiential retail in new ways in the years to come. In parallel to our great results in DTC, wholesale also had another outstanding quarter. The rate and quality of the growth we have achieved is a real testament to multi-channel distribution done right. Last time we spoke, I went through the great work our team has done with our world-class partners to elevate our storytelling and presentation.
We continued to see the benefit of that in the latter innings of the fall-winter shipping period. On the back of high sell-through levels early in the season, retailers continued to request earlier shipments of remaining order book commitments and reorder allocations. Because of our success expanding in-house manufacturing, we were able to respond to this faster, putting our partners in stronger merchandising positions to meet peak consumer demand. To sum it up, both DTC and wholesale channels outperformed. Neither channel impeded the growth of the other. They both delivered exceptional results. Continuing on to the topic of manufacturing, we have just hit another major milestone. Earlier this morning, we announced that we are opening our second Quebec production facility in Montreal, closely following the opening of our third Winnipeg facility.
In Montreal, we will have 100 employees producing jackets by the end of March, and we expect to create over 300 new jobs in its first year of operation. At full capacity, the new site will employ 650 people. With this addition, we now have a total of eight in-house manufacturing facilities in Canada. This is yet another example of how scaling Canadian production is a core competency at Canada Goose. It is a foundational part of our long-term vision, and it is something that we are executing on consistently. We have had great success in Boisbriand, Quebec, since opening our first facility there in 2017. In just over two years, we've created over 500 new jobs. The city has a great history in apparel manufacturing, and our sewer training school has been integral in creating a pipeline of skilled labor that we need to support our growth.
This is also a major point and significant point of leadership for us. Montreal's Chabanel district was once a central part of apparel manufacturing in Canada, but this has been eroded by the shift offshore in pursuit of margin. While some brands only have their headquarters in the city, they're missing the great history and potential that this area has. This is the perfect opportunity for us to rebuild and revitalize the cut-and-sew industry there and have a lasting impact on the community. In summary, going back to my initial remarks, fiscal 2019 is going to be another great year at Canada Goose. Our brand and products continue to resonate globally. Both channels are going from strength to strength, and we have made massive progress expanding in-house capacity. We are excited about next year as well, and we remain deeply committed to our long-term vision.
With that, I will turn over to Jonathan to go over our financial results.
Thanks, Dani. Good morning, everyone, and thank you for joining us. Before I go through the numbers, I would like to remind you that they are stated in Canadian dollars. I shall comment on the quarter then update you on guidance. As Dani just said, our financial performance in the quarter was outstanding in this, our largest quarter. Revenue increased by 50.2% to CAD 399.3 million, or 49% on a constant currency basis. Relative to last year, the Canadian dollar depreciated relative to the U.S. dollar and to a smaller degree, the euro and the pound, which somewhat benefited our reported top line. Our DTC channel led the way, with revenue increasing to CAD 235 million, up from CAD 131.7 million last year. All of our new stores put in a great performance relative to previous openings, Tmall also had a strong start.
Our well-established stores and our e-commerce sites also went from strength to strength. Like Dani, I am really encouraged by the quality of guest feedback on our retail experience during peak trading. On the back of sell-through momentum, wholesale also put in a very strong quarter. Revenue grew to CAD 164 million from CAD 134.2 million, driven by higher order values from existing partners earlier shipment timing. In response to customer requests and supported by expanded capacity, we have fulfilled a higher proportion of our order book reorder allocations relative to last year. It's great to see wholesale perform so well this year alongside our expanding DTC footprint. This reflects all the work our team has done with our best-in-class partners to elevate our storytelling, our presentation, the customer experience.
Done right, wholesale is a complementary channel which extends the reach diversity of our distribution, it will continue to be an important driver of our business going forward. Consolidated gross margin expanded to 64.4% from 63.6%, driven by the higher proportion of DTC revenue. DTC gross margin was 76.1% compared to 76.4%. This was due to sold inventory manufactured at higher labor costs related to the onset of the Ontario minimum wage increase, which happened at the start of 2018. Wholesale gross margin was 47.7% compared to 51%. The flow-through of the higher labor costs affected the channel more significantly due to the difference between wholesale and DTC selling prices. Purchase accounting adjustments relating to Baffin and changes in product mix with a higher proportion of newer product also impacted margin.
I'd stress that the point of comparison is also elevated relative to typical levels due to a combination of one-off material savings and favorable external factors, which we also had the benefit of but earlier this year. On a more representative year-to-date basis, wholesale gross margin is 49.2% compared to 48.2% last year. DTC operating income was CAD 141.4 million, an operating margin of 60.1%. This compares with CAD 79.1 million last year, or an operating margin of 60%. We're pleased to have maintained a strong DTC operating margin, even as we absorbed incremental SG&A fees, which relate to our operating partners in Greater China. Wholesale operating income was CAD 65.1 million, an operating margin of 39.7% compared to CAD 57.2 million, or an operating margin of 42.7%. SG&A decreased as a percentage of sales on a larger quarterly revenue base. Unallocated corporate expenses were CAD 61.3 million compared to CAD 44 million.
This was driven by planned growth investments in marketing, corporate headcount, and IT, including our Greater China operations. We also incurred higher professional fees and other costs relating to public company compliance. Unallocated depreciation and amortization was CAD 5.3 million compared to CAD 2.4 million, and that increase is driven by the retail opening program and IT investments. Combined, this resulted in total operating income of CAD 139.9 million, up CAD 50 million from the CAD 89.9 million last year. On a non-IFRS basis, adjusted EBITDA was CAD 151.1 million compared to CAD 94.7 million last year. Net income was CAD 103.4 million or CAD 0.93 per diluted share, compared to CAD 63 million or CAD 0.56 per share. Adjusted net income was CAD 107.2 million or CAD 0.96 per diluted share, compared to CAD 64.5 million or CAD 0.58. Turning quickly to the balance sheet, we ended the quarter with a net cash position of CAD 55.8 million and net working capital of CAD 170.7 million.
Relative to last year, net working capital has increased due to the consolidation of Baffin, including inventory marked at full resale value, and the planned build of inventory for future growth in fiscal 2020. Now turning to our revised guidance for fiscal 2019. With the majority of the fiscal year now complete, we have refined our guidance based on the strength of our year-to-date performance and current trends in the business. We currently expect annual revenue growth in the mid to high 30s on a percentage basis compared to what we said previously, which was at least 30%. This assumes annual wholesale revenue growth in the mid to high teens.
Adjusted EBITDA margin expansion of at least 150 basis points, unchanged from last time, and annual growth in adjusted net income per diluted share in the mid to high 40s as expressed as a percentage, compared to our previous guidance of at least 40%. I would also note that the back half of fiscal 2019 is more front-weighted to Q3 relative to last year. We build demands on an annual basis, and as investment pieces, there is inevitably variability in buying patterns for our products across years. This is playing out across our business as a general trend across channels, geographies, and customer demographics. We've seen a higher proportion of purchasing in the earlier months of the season. You can really see this when you compare our Q3 growth rate relative to last year.
Despite a larger base and a more mature DTC footprint, revenue increased by 50.2% this year, compared to 27.2% increase a year ago. With significantly more purchasing occurring earlier, this implies a naturally lower rate of speed in both channels through the remainder of the fiscal year in a smaller shoulder quarter. By all accounts, fiscal 2019 will be our best ever year and by a wide margin. We have undertaken an ambitious expansion of our DTC footprint and made significant investment in our platform for long-term growth. All of this while delivering exceptional results. On a global stage, our business has never been stronger, and we are still just getting started. I look forward to speaking with you again on our next call to update you on our progress and outlook. Now I will turn it back to Dani for some closing remarks.
Thank you, Jonathan. The first three quarters of fiscal 2019 have been amazing, and I'm feeling really, really good about the year as a whole, which, as you know, we look at our business on an annual basis. I encourage you all to check out a new brand initiative that we've started called Project Atigi, which we launched in January. It's a truly amazing, one-of-a-kind artwork collection designed and made by Inuit seamstresses, and is an example of social entrepreneurship at its very best. Believe me, we are just getting started. I believe this project can and will be transformative. We are also excited about our upcoming spring collection, which is hitting shelves as we speak, and there's a lot of consumer excitement about that. With that, I will turn it over to the operator to begin our Q&A session.
At this time, I'd like to remind everyone, in order to ask a question, press star, then the number one on your telephone keypad. As a reminder, we ask that you limit yourself to one question to allow time for others to ask their questions. If you have further questions, you may queue up again. We'll pause for just a moment to compile the Q&A roster. Your first question comes from Michael Binetti with Credit Suisse. Your line is open.
Hey, guys. Good morning. Congrats on a nice quarter. First, just a quick modeling question for Jonathan, then I have a bigger picture question. On the gross margin, Jonathan, I think that the different growth rates in the different businesses moving the mix around makes it a little bit hard to forecast. I think it'd be helpful if you walked us through how you see gross margins evolving going forward, in each channel. If I can be direct, do you think a lot of the gross margin low-hanging fruit is behind us at this point and more of the path to the EBITDA margin expansion you laid out is from the SG&A side? I guess secondly, I'm a little confused when I look at the inventory up 75%, but you said sales were pulled significantly forward within the second half of your fiscal year.
It seems like there's quite a bit of inventory ready for the fourth quarter. You're saying the growth rates will slow on a rate basis. Maybe you could help just reconcile those two.
Okay. Taking the gross margin question first. When we've talked about gross margin before. This is something that we very much continue to believe. There is forward potential in gross margin. However, the factors that take us forward are around production efficiency, scale benefits. Those help to fund investment in new product, and also offset things like the increase in the Ontario minimum wage raises, increases in raw material costs and so on. As a result, we expect to see gross margins advance within channel, so ignoring the channel mix point, within channel, but by a small number of bips, not by huge leaps and bounds, and that won't necessarily unfold in a linear way. It will be a little bit bumpy as it goes. It's absolutely forward momentum in each channel, in addition to the overall channel mix.
Okay.
As far as the inventory is concerned, you rightly observed, we've got more inventory than we had a year ago by a significant margin. What you have to be aware of course, is that we produce our inventory on a linear basis ahead of the planned growth for future seasons and for future years. What you see now is an inventory being built in advance of our fiscal year 2020.
Yeah. If I could add.
I guess, go ahead.
If I could add one thing to that, just to say, in terms of inventory, we're right where we want to be. We're happy with our inventory position. A lot of it, as Jonathan mentioned, is for next year. Also to point out that we do have more stores, in having more stores, by definition, we need more inventory to fill those stores, and that also adds to the increase in inventory level.
Okay. Dani, if I could ask just maybe on a more fun basis. On China, how's it going? This is the first big quarter there. What are you learning now that you're on the ground there? Specifically, how do you look at the opportunity there for physical stores and then the ramp in China on Tmall? Is the plan there to constrain supply into Tmall similar to wholesale and rest of world? Any kind of outlook there as you've had a little bit of time in the saddle now would be helpful.
For sure. Yeah. We remain really bullish and excited about China. We're really happy to be serving our fans in Greater China. We know that we have a tremendous amount of demand in that marketplace. That's been demonstrated. There have been all sorts of reports of lineups outside of our stores in both Beijing and Hong Kong, and that's just an indication of how strong the demand is for our brand in China, and we intend to continue to expand there.
Thanks a lot.
Your next question comes from Oliver Chen with Cowen and Company. Your line is open.
Thank you. Congrats on a great quarter. On the wholesale channel, as your product assortment continues to broaden and as you think about product opportunities and line extensions, how has the nature of orders been changing? Related to this is we're seeing competitors do frequency of monthly drops. What are your thoughts on balancing speed and novelty versus essentials as you think about that from both the merchandising and supply chain sensibility? Would love your thoughts, particularly as you have seen so much success in wholesale, and it feels like there's a lot of floor space as well as comp opportunity within this channel.
Yeah. Thanks, Oliver. We're really excited and happy about how well wholesale has been performing. A lot of that is due to the fact that we're working closely with our wholesalers to create optimal environments within our wholesale doors, to put shop in shops there, to make sure we have trained and educated brand ambassadors in the stores and in all the shops. As we look at our merchandising assortment and our merchandising planning teams.
Definitely, we want and we're achieving the outcome of the spaces looking new and fresh on a regular basis. I think that's table stakes for us now, and it's certainly a very important part of how we perform and why we're performing so well.
Okay. On monthly drops and just streetification of the category, do you have any thoughts there as well as how should we model the evolution of your average unit retail as you continue to innovate in the new wearing occasions?
I think that we're going to continue to plan our merchandising in a similar fashion to the way we've always planned it, and it's been working really well for us. We don't intend to introduce any radical shifts or changes to the diversification of product and the cadence of that diversification than we have currently. We're pleased with it.
As you come to think about how average unit retail evolves, you should consider that we typically take price in the low to mid-single digits, and that will impact on the average unit retail in-channel.
Okay. Thank you. Just the last modeling on the mix impact on the margin from newer product as well as labor. How many more quarters will that be a headwind? Just what should we think about as we consider our within channel margins and our models, and the new product mix impact. Could you just elaborate on what that is so we understand how that may manifest? Thank you.
The point I was just making, we manage margins like we manage the business on an annual basis. Therefore, my comments from the earlier question really apply. You need to take a longer-term view of margins on an annual basis. On an annual basis, we expect margins to expand slightly in-channel. That's true for both wholesale and DTC. You have the forward momentum, as I said before, of pricing and efficiency and scale and the manufacturing capacity that we're opening up, funding the newness of the price increases and resulting in a small forward momentum in margin over time.
Your next question comes from Kate Fitzsimons with RBC Capital Markets. Your line is open.
Yes. Good morning, guys. Congratulations on a strong quarter. I guess when we look at the guidance for this year, the direct channel is going to land at just over 50% of sales. Dani, when you think about the strength of the stores and the e-commerce channel, do you think there's anything structural preventing that mix from moving higher? Some of your peers have direct channel penetration well into the 70s, just your longer-term view on channel mix there would be helpful. Thank you.
Yeah, for sure. Thanks for the question. Yeah, I think we still have a lot of runway to continue to grow our direct-to-consumer sales as a percentage of our overall revenue, while at the same time still growing wholesale. Wholesale is still important to us, and we feel it's going to continue to grow. Definitely as a percentage, to your point, we feel that DTC sales, there's more runway to increase the percentage. No question.
Great. Secondly, just when we think about the fourth quarter, certainly, Jonathan, understood your comments on the revenue expectations. When we're looking at the EBITDA margins, just given the year-to-date trends, is there anything to consider in terms of 4Q expense shifts impacting results? Thank you.
I think the best way to approach the guidance is really to think about it in the round. We're very confident in what we've said. We've got the peak selling season behind us. We've got a small shoulder quarter remaining, therefore the majority of the fiscal year is complete. I think we've got a really high level of visibility that helps us give more precise assumptions. When you consider what's happened to the evolution of the chain in the quarter, obviously we've got a larger number of stores. We continue to invest in building demand in the business, both for the current year and future seasons. Therefore, that's all reflected in our cost base.
As a reminder, we ask that you limit yourself to one question to allow others time to ask their questions. Your next question comes from Omar Saad with Evercore ISI. Your line is open.
Great. Thanks for taking my question. Super quarter. It seems to us, looking at the brand across channels and the product availability, given the stock-outs and extreme demand, it seems like it's continually a supply-constrained brand, which is obviously a great situation to be in relative to demand, especially as a luxury brand made in Canada. I wanted to get your viewpoint. How do you think about allocating as you build inventory and you add more own production and you expand your manufacturing base, made in Canada manufacturing base. How do you think about philosophically allocating incremental supply to your own channels, to your e-commerce channels, to new opportunities in Asia versus wholesale? I know there's not a lot of wholesale distribution expansion.
It seems like it's a much more productivity gains and space gains within existing channels. How do you think about that philosophically, where you want to direct that incremental supply build, given the supply constraints on the business relative to the demand? Thanks.
I think, let's start with the question of supply constraint and then talk about allocation. The reality is that we continue to increase the proportion of our down product that we manufacture. Not only that, but we are also, as you heard today, continuing to expand our capacity, both through the earlier opening of Winnipeg, which we'll continue to scale up, and of course, the opening of our second Quebec production facility. Honestly, we are laying in the capacity that allows us to deliver current and future growth. When it comes to our plans in terms of how we allocate product, we have ample inventory to meet the demand, both in wholesale and DTC. You've seen us do that through this year.
You've seen us building inventory this year that allow us to be very confident about next year and how we'll be able to continue to deliver growth in future seasons. We don't see that as a constraint either for wholesale or for DTC.
If I just jump in and add a little bit to that what Jonathan said. I've been doing this for 22 years, every year is different. Shape of our growth every year is different. Just to point to the growth itself, it's amazing to be in a position where there's perceived scarcity for our brand, there is a lot of scarcity. It's hard to find our products, year-over-year growth percentages continue to be as strong as they are. I think that those things together create a little bit of magic, which is why we continue to do so well.
Agreed. Is it fair to say that some of the inventory build at the end of the quarter that you're holding for next year, for fiscal 2020 and the following winter, that's inventory you could sell now if you wanted to, you want to build it for next year. Is that the right way to think about your strategy there?
I think that's the first statement, for sure. We start building inventory for next year, even in this season, though in some cases it's possible to pull forward and cannibalize some of that stuff for next year, we don't want to disappoint our customers next year at all. So, we don't.
Your next question comes from Camilo Lyon with Canaccord Genuity. Your line is open.
Thank you. Good morning, and I'll add my congrats on the great quarter. Dani, I was hoping you could give us some insights into how you're thinking about your regional growth opportunities. Your home market of Canada showed another tremendous growth rate in the quarter. I think it was up 38%, U.S. up 45%, rest of world, obviously a big opportunity for you. I'm pretty surprised at how great these growth rates are in your very established market. How do you think about the growth opportunities in that home market? Maybe you can help us provide some shape around the composition of the future expectations of growth by those regions.
We're very pleased with and very excited about our growth so far and future growth opportunities in all of our regions. The report, as you can see in our results, we have continued to grow our business significantly in all of our geographies, as you mentioned, including our home market of Canada. With that, we're also pursuing a global penetration opportunity, and we'll continue to develop our brand and distribution both in North America and in Europe and in Asia. As you know, China has a massive amount of white space for us, as do all of our regions, Europe and North America still do as well. We're just getting started in Greater China, and we're very encouraged by the results so far. Can't wait to talk more about that next time we get together.
Is there anything that you're seeing that would suggest that there's a maturation that you're reaching in your home market?
No, there is not.
Great. Just my final question is on store openings for 2020. If you could just remind us what you've got planned and what cities you'll be going into?
I can't wait to discuss at next quarter when we announce our year-end results. At that time, we'll be talking about our plans for the future year. Obviously I know some of them are starting to take shape, and I can't wait to discuss them with you at that time, and I think it's going to be a lot of fun.
Your next question comes from Robbie Holmes with Bank of America Merrill Lynch. Your line is open.
Oh, hi guys. My one question is, could you give us some color on your tourist business? I'd be curious if you've seen any changes in particular on the China tourist business in North America as you've opened up in Asia, and then just generally what you've seen from your tourism customers. Thanks.
Tourist business continues to be strong in all of our stores across all of our geographies. Opening in China has not negatively impacted our tourist business anywhere else in the world.
Terrific. Thanks so much.
Your next question comes from Ike Boruchow with Wells Fargo. Your line is open.
Hey, congrats on a great quarter, everyone. I have a higher-level question to start. Just, I guess, Jonathan or Dani, can you talk about the margin structure in China? I know it's early, but just what you're seeing from the profitability, maybe the contribution margin with Tmall or the initial margins on the retail doors there, knowing that the costs are a little bit higher, just how that compares to the existing base of business that you guys currently operate.
Yeah. What we've said all along and what continues to be the case is that, we're having a great experience there. Excuse me. As Dani said, we're very happy with how it's all performing. Of course, we do have to wear a slightly higher level of SG&A cost, because we have partner fees. Those partner fees vary directly in line with revenue. Therefore structurally, the margins are a little bit lower there than they are in the rest of the world.
Got it. Just a quick follow-up. Understanding this is a full year business, as we look to model the fourth quarter, it seems like wholesale should be down. I know you guys talked about timing that maybe helped you in Q3. Jonathan, any way you could quantify timing shifts or timing benefits that maybe shifted out of Q4 and into Q3?
Well, I think, what I would say is that we've clearly built our capacity. That's allowed us, I've been saying it pretty much since I've been here, that's allowed us each quarter to get our product in front of consumers through the wholesale channel, faster than we've been able to do previously in responding to the requests from our partners in the wholesale channel. Therefore, we've exited Q3 with a pretty clean order book. As a result of which, Q4, as you correctly observed, will be a bit smaller.
All right. Thanks.
Your next question comes from Mark Petrie with CIBC. Your line is open.
Hey, good morning. Jonathan, you mentioned the pricing dynamic generally low to mid-single digit. In the past, you've acknowledged that there are some psychological barriers, particularly on some of your longer-standing repeat products in some of your core markets, I guess, here in Canada in particular. I'm just wondering if today, you think that presents a bit of a barrier to that level of price increase, or if you're still looking to that over the course of time?
No, that's all factored into what we're saying. We continue to be able to run a model which allows us to take price in the low to mid-single digits. We benefit from the level of demand in the market with consumers generally, such that we're able to convert that into revenue.
In Canada specifically, have you seen any sort of different reaction to the greater introduction of products over, I guess, the CAD 1,000 mark as opposed to the products under CAD 1,000 that have been increased over time?
No. What I just said applies to each and every one of our markets. We simply don't come up against that barrier.
Okay. Thanks.
Doesn't mean that we don't concentrate on sweet spots. Of course, we do. We do not come up against barriers.
Yeah. Okay, thanks. I guess just secondly, recognizing that wholesale is an important part of your growth strategy and remains in healthy growth, how would you characterize the opportunities from here in terms of refining both your mix of wholesale partners, and how those partners support your brand, either in-store experience or in terms of assortment that they carry? Is there still an opportunity to prune to drive growth, or should we expect it to be relatively stable from here?
We're happy with our wholesale partners where they are right now. We're always every year going through a process of sometimes editing and sometimes adding new entrants into the market that are brand enhancing. We continue to work and develop, and strengthen presentations in our wholesale partners with brand ambassadors who speak directly to our brand so that just elevates the brand, and the brand perception around the world. That's part of building a global brand. It's really important. We're really happy with the performance of wholesale this year, and from what we've seen, our early indications for our wholesale order book next year, we're really happy with that as well.
Okay. Appreciate the color. Thanks.
Your last question comes from James Allison with Barclays. Your line is open.
Good morning. Dani, in your opening remarks, you referenced research you've done that reaffirms the strength of Canada Goose's brand. Can you share some of the color of the research? Are you seeing brand recognition tick up in some of the white space in the U.S. and in Europe? Have you plateaued in Canada from a brand recognition standpoint?
Great question. We have a dedicated in-house insights team, they continually monitor a wide range of data related to the brand health in all of our key markets, we use this to serve as an important input to both our tactical and strategic decision making. Since going public, we have significantly grown our brand awareness and affinity in the markets that we have prioritized. Examples of that could be London, Boston, Chicago, this is reflected very much in the growth we are achieving outside of our home market as well. For example, in Q3, in the U.S. and the rest of the world, our revenue grew by almost 45% and 75.4% respectively. We continue to believe that our brand has a large amount of white space globally, our research confirms that. Canada is a market that loves Canada Goose.
We're a brand that in Canada, we've become something of a national brand here and a point of pride for Canadians. As we continue to produce new styles and new colors and new collections, our core customer here in Canada continues to gravitate towards those.
I guess connected to that, are you seeing increased interest from your U.S. retail partners to sell your product in some of the white space in the U.S.? I'm thinking of states in the Western side or in the South.
Absolutely. We continue to work with all of those partners that are best in class at expanding doors where appropriate, we'll continue to do that.
Okay, thank you.
There are no further questions queued up at this time. I turn the call back over to management for closing remarks.
Great. Well, thank you all very much for taking the time to be here with us today. Really appreciate you being here, appreciate your interest in Canada Goose, and I'm really excited, and I really look forward to updating you on our progress and outlook when we report our fiscal year-end results and provide some insight into the year to come after that. Thanks a lot and have a great day.
Thank you. This concludes today's conference call. You may now disconnect.