Good morning, and thank you for joining us. I will begin with a summary of our results for the third quarter of fiscal 2025.

For the quarter, revenue was $71.5 million, representing a 6.8% increase compared to the same period last year. Direct-to-consumer sales rose 4.8% to $56.8 million, and comparable sales were 6.3%, driven by strong traffic online and conversion in stores.

On a two-year stack basis, comparable sales growth stand at 12.1%. Partners and others also recorded a robust quarter, with sales increasing 15.3%, due partially to earlier orders from our Taiwanese partner and strong growth in our B2B channel.

Our direct-to-consumer gross margin was 65.4% and improved 140 basis points, reflecting continued progress in reducing markdowns, improving product mix, and strengthening our supply chain discipline. Our adjusted EBITDA was $7.5 million, compared to $7.1 million last year.

Excluding the impact of the DSU revaluation, adjusted EBITDA was $7.6 million, compared to $7.0 million last year, an increase of 7.3%. Overall, our Q3 demonstrates that our strategy is working.

We delivered improved execution across merchandising, marketing, and operations, while continuing to invest in the long-term health of the brand. The broader retail environment remained dynamic during the quarter, and we experienced an unusually warm fall.

Despite these conditions, our brand continues to resonate, as evidenced by our strong sales and strong new customer acquisition during the quarter. Our performance reinforces the importance of Roots brand strength, heritage, and commitment to high quality, comfortable clothing that serves as differentiators in this market environment.

Over the last year, we have continued to strengthen our go-to-market process, and our merchandising strategy has gained momentum. During the quarter, we delivered strong results across multiple collections, including our new Roam travel capsule, which features modern basics with technical product attributes, and Cloud, our ultra-plush, minimal logo sweatshirts and sweatpants.

Style productivity has also improved this year, reflecting tighter assortments and more disciplined buys, as well as our investments in AI-driven allocations. Each year, we are making measurable progress in enhancing our product architecture and elevating our offerings.

However, we continue to believe meaningful opportunities remain. Our brand building efforts remain a core driver of our long-term value and an important part of our multifaceted growth strategy.

Q3 marketing efforts centered on new store openings in Vancouver and Toronto, our fall/winter product launches, and our enhanced campus presence at the University of Toronto. These activations exceeded our expectations on engagement and traffic.

In the third quarter, we also continued our testing in paid media, with increased spending across the full marketing funnel. As we enter the fourth quarter and look to 2026, these learnings will help further fine-tune our marketing efforts and create more disciplined creative testing.

We are looking closely at the impact of agentic AI on customer product discovery and continuing to adapt to this changing landscape. We also saw strong storytelling through our brand ambassadors, reinforcing Roots as a brand that connects people to nature, community, and a sense of belonging.

Our omnichannel strategy continues to strengthen our connection with our customers, with a goal of enabling customers to shop Roots wherever, however, and whenever they choose. The 6.3% increase in comparable store sales in the quarter, which is 12.1% on a two-year stack basis, reflects the positive impact of this strategy on performance.

In our retail channel, we saw strong conversion wins, driven by improved cross-storytelling, disciplined inventory management, and refreshed visual merchandising, combined with enhanced sales associate training and scheduling. Our paid media efforts have also driven substantial traffic to the e-commerce channel, which we are focused on converting in the fourth quarter.

In addition, increased personalization in search and product merchandising, the integration of wish lists, more functionality such as filters, and improvements in the shoppability of our landing pages will support both revenue and the customer experience in the fourth quarter and beyond online. As our results highlight, our strategy remains consistent and focused.

We are strengthening our core franchises, expanding into complementary categories, and increasing clarity and differentiation within our assortments. We are also elevating the brand through collaborations, heritage storytelling, and more targeted marketing.

We are also enhancing our omnichannel experience, with a focus on convenience, speed, and personalization, and we are driving operational excellence across the business. I would now like to comment on early Black Friday trends in the fourth quarter.

We've seen good engagement with our product and marketing efforts, with consumers responding positively to curated offers in our core franchises and gifting categories. Early in the holiday season, we continue to experience positive trends.

Our Seth Rogen partnership has been resonating well with consumers, who understand the strong alignment between our brands and have enjoyed the witty, light, quality approach to the campaign. Before I conclude, I would like to thank Roots employees across Canada for their commitment and hard work, and our customers for their ongoing loyalty to the brand.

Roots is a brand with strong heritage, a clear purpose, and significant long-term potential. We remain focused on disciplined execution and on creating long-term sustainable value for all stakeholders.

With that, I will now turn the call over to our Chief Financial Officer, Leon Wu, for a deeper review of our financial results.

Thank you, Meghan, and good morning, everyone. The past quarter marked the fifth consecutive quarter of growth in top-line sales, gross margin, and profitability, while we continue to reduce our year-over-year net debt.

The ongoing momentum reflects the collective efforts of our multipronged product, channel, and marketing functions, working in lockstep to offer the best Roots experience to our global customers. I will now share some more details on the key elements of our results.

Sales in Q3 were $71.5 million, increasing 6.8% as compared to $66.9 million in Q3 2024. The growth in our total sales was driven by both our direct-to-consumer and partners and other segments.

Our DTC segment sales were $56.8 million in the quarter, growing 4.8% relative to $54.2 million last year. Our comparable same-store sales grew 6.3% in the quarter and 12.1% on a two-year stack basis.

The continued DTC sales growth reflects a strong omnichannel experience offered to our customers. We have seen a strong response to the investments made into our store renovations and data-enabled technology that offers an elevated and more personalized brand experience.

This was further supported by the curation of new seasonal styles that amplified and complemented our core product offerings and authentic marketing moments. As Meghan mentioned, these initiatives have contributed positively towards our traffic, conversion, and customer count metrics, underpinning our ongoing DTC sales growth.

Our partner and other sales were $14.6 million in Q3 2025, up 15.3% compared to last year's sales of $12.7 million. The growth in the segment was driven by earlier orders by our wholesale operating partner in Taiwan for the upcoming holiday and spring selling season, a portion of which was fulfilled in the fourth quarter last year, as well as higher domestic wholesale sales of custom Roots-branded products.

Total gross profit was $43.4 million in Q3 2025, up 8.1% as compared to $40.2 million last year. The growth in gross profit dollars was driven across both segments and highlighted by the gross margin expansion in the DTC segment.

Total gross margin was 60.8%, up 80 basis points compared to last year. Our Q3 2025 DTC gross margin was 65.4%, up 140 basis points compared to 64% last year.

The DTC gross margin expansion was driven by growth in our product margins, resulting from continued improvements to our product costing and lower discounting. The unfavorable year-over-year foreign exchange on U.S.

dollar purchases in this quarter was offset by improvements in freight costs. SG&A expenses were $38.2 million in Q3 2025, as compared to $34.5 million last year, an increase of 10.6%.

The largest increases in our SG&A expenses were driven by a combination of increased investments in marketing and higher personnel-related costs, along with higher variable selling costs resulting from stronger sales. As referenced over the last few quarters, we have increased our marketing investments in 2025 with the goal of supporting both in-year sales growth and long-term multiyear brand uplift.

Proportionate to the size of the fourth quarter, which represents our largest selling period, we are expecting to invest an incremental $2 million to $3 million in marketing dollars in Q4 2025. The incremental spend will be across a range of initiatives across the full marketing funnel, balanced between top-of-funnel investments to build long-term brand equity, with benefits through the future years, and more immediate bottom-of-funnel sales-driving activities.

We have seen great results thus far in how our marketing contributes towards brand momentum over the last few quarters. As we look forward, we are constantly reflecting on the results of each initiative and will leverage the learnings from this year to refine our marketing strategy, with the goal of maintaining momentum while focusing on the most effective and efficient initiatives.

Additionally, SG&A increased by $0.7 million of higher non-cash stock option expenses and costs related to changes in key personnel; $0.3 million as a result of higher U.S. tariffs on sales to U.S.

customers after the U.S. duty-free de minimis exemption was eliminated in August; and $0.1 million from the unfavorable revaluation of cash-settled instruments under our share-based compensation plan, which is directly tied to increases in our share price.

During Q3 2025, we generated $2.3 million of net income, down 4.5% as compared to $2.4 million last year. This equates to 6 cents per share in both years.

Excluding the impact of our DSU revaluation expense headwinds resulting from our share price appreciation, our net income would have been $2.4 million, improving 1.5% compared to last year. Our adjusted EBITDA was $7.5 million, increasing $0.4 million, or 5.3%, compared to $7.1 million last year.

Adjusted EBITDA would have grown by 7.4% without the aforementioned DSU revaluation impacts. The strong improvement in our profitability reflects the sales growth and margin expansion achieved during the quarter.

Now turning to our balance sheet and cash flow metrics, which also reflects the strong results for the quarter. Our Q3 ending inventory was $66.6 million, increasing 10.3% as compared to $60.4 million last year.

Approximately $0.7 million of the increase was driven by the higher U.S. dollar foreign exchange paid on our inventory.

The remaining year-over-year increase in inventory was driven by improved inventory positions ahead of the peak holiday selling period and higher in-transit inventory to support sales for the next year. Our Q3 free cash outflow was $4.6 million, improving from an outflow of $6.0 million last year.

The year-over-year improvements in free cash flow were driven by sales growth and ongoing management of working capital, partially offset by higher capital investments during the quarter. Due to the seasonality of our business, we typically see cash outflows as we build up our working capital ahead of our peak season, before generating larger cash inflows through the upcoming holiday selling period.

During Q3, we repurchased 415,000 common shares for $1.3 million under our normal course issuer bid. As of the end of the quarter, we were eligible to repurchase up to 325,000 common shares under the current NCIB program, which is in effect until April 10th, 2026.

Net debt was $44.1 million at the end of Q3 2025, down 5.9% as compared to $46.9 million at the same time last year. Our net leverage ratio, measured as net debt over trailing 12-month adjusted EBITDA, was approximately 1.9 times.

With that, operator, you may now open the call for questions.

Morning, Meghan. Morning, Leon.

Morning, Brian.

Morning.

Meghan, you comment and you said in the transcript that you continue to experience positive trends. Maybe just, I know you don't want to go into detail, but maybe just talk about the consumer behavior you've seen going into Black Friday and early in the, as you approach the holidays.

Are you seeing any change in maybe the basket size or the AUR? Then lastly, is there any bifurcation of consumer you're seeing with respect to income demographics or by region?

Thanks, Brian. Nice to hear from you.

I would say overall, the trends from a Black Friday perspective, I think are really reflecting the overall economy that we see today, right? I would say that from a consumer perspective, we're definitely seeing people shop earlier.

I think that Black Friday for a lot of people was pulled forward into early November. I think we've seen a continuation of some of the discounting trends kind of post-Black Friday, which reflect changes in the economic environment as we see today.

Our consumer continues to be strong, and so we were happy to see those positive trends overall. I would say fundamentally, the consumer continues during this time period to look for both uniqueness as well as deals, and that's something we've seen kind of year-over-year.

That trend continues. That's been a trend we've seen for the last number of years also.

I think fundamentally the consumer is, as you've seen broadly from a market perspective, continuing to reflect the current economic reality, and our consumer has continued to be positive, which is good for us. I think our product categories are, unique position from a, heritage perspective, comfort perspective.

I think the fact that we have sustainability in our products now is very unique to us also. We've been happy to see the positive reaction that the consumers have had to our overall product collection.

I think getting in front of those consumers also early, as well as with, the right type of marketing, has been helpful to us.

Right. You can see in store the uniqueness and expansion of the product breadth.

I guess in terms of marketing, you addressed this on the call, but I think you said $2 to $3 million additional in Q4. Maybe can you just talk about when you look forward to next year, I think you're still in the assessment phase, but is there, maybe talk about the options.

Is the plan to wean off marketing a little bit, or do you maintain at full steam ahead to further stimulate top-line growth in order to drive operating leverage? Maybe just talk about how you're looking at that for next year.

Yes, absolutely. What I would say is I think we want to continue to trade through December.

We still have, quite a lot of the month left to go. Typically at this point in time, we have kind of almost half of the quarter left.

There's still a lot of time to go from that perspective. I think the marketing efforts that we have put into the fourth quarter, we want to continue to evaluate those on a full-year basis.

That being said, I think when we look holistically at what we're trying to accomplish, we're obviously, this year doing a bit more of a mix between that top-of-funnel awareness building, brand growth perspective, which will help us over a multiyear basis, and then that short-term conversion-driving activities. That blend has obviously shifted a bit this year to have a little bit more of that top-of-funnel approach to it.

When we're looking to next year, really what we're looking at is really making sure that we go through all the marketing we've spent this year, have a fantastic understanding of what generated return, immediate return to us, and what we think is important to drive longer-term value from a brand perspective. Roots is in a unique position because we do have significant awareness across the country.

We have, 80%-plus, in some cases we see 90%-plus awareness, depending on the surveys you look like from a brand perspective. A lot of what we're attempting to do from a marketing perspective is really not to drive awareness to the brand, but it's really about making them aware of the things that we have today, how the brand has changed, the broad collection that we have.

Also, we're looking at different channels. If you think about the changes that are happening with, the ChatGPTs, the Geminis, the AIs of the world, obviously making sure that we have the right investments and put behind making sure our website, our brand broadly is searchable and findable on those platforms is really important to us.

I think that there are marketing investments as a whole are continuing to reflect the changing reality of how you have to get in front of consumers. I won't give you direction in terms of what the marketing dollars look like overall for next year, but I would say that this year was definitely a year where we were testing and learning across a multitude of different things, and so we will be tweaking our marketing overall from a mix perspective next year as we take those learnings and apply those to thinking about both short-term and long-term growth.

That's helpful. Then a last one, maybe Leon, the gross margin, product costing seems to be an ongoing strength here.

I get the lower promo contribution to gross margin, but how are you achieving ongoing product costs? Is it sourcing?

Is there more room to go? Maybe just comment on that.

Yeah. For the sourcing, we've really built out a robust process over the last few years in terms of understanding how we procure our products from overseas.

One of the main drivers of it is understanding with our vendors how we continue to maintain the quality of our products, but then source it with buying deeper or buying earlier to bring that product at a better cost. Another area that we have achieved a lot of the sourcing gains recently has been shifting where the manufacturer is coming from, where there's more duty-favorable countries to source from to bring into Canada.

That is also helping us gain a lot of the margins.

Is that a function of tariffs on the U.S. on to China as well?

No, the tariffs for the U.S. that we reference is just related to the U.S.

e-commerce part of our business, which is a smaller part of our overall business. In Canada, we pay import duties to bring goods from overseas, and that has slightly different tariff structures or duty structures than the U.S.

On the U.S. side, again, it's a small part of our business.

No, I'll take it offline. I think I was going somewhere else with that.

I appreciate it, and look forward to seeing the strength in the Q4 results. Wish you both a prosperous holiday season.

Great,

thank you.

Thank you, everyone, for joining the call today. For those of you celebrating, we wish you a wonderful holiday season, and we look forward to updating you on our fourth quarter results in the new year.