Aritzia delievers Q4 revenue growth of 7 percent

Aritzia delivered fourth quarter net revenue of 682 million Canadian dollars, an increase of 7 percent, while comparable sales declined 3 percent.

Full year net revenue increased by 6.2 percent to 2.33 billion Canadian dollars, resulting in a three year CAGR of 39.6 percent. Comparable sales decreased 1 percent.

“As expected, we also delivered further sequential margin improvement. Although the consumer environment remains mixed, clients responded well to our product launches and to the improved level of newness in our assortment," said Jennifer Wong, the company’s chief executive officer in a statement.

Commenting on the outlook, Wong said: "In fiscal 2025 we expect our revenue growth to improve, fueled by our real estate expansion strategy, as well as momentum in eCommerce. In addition, we expect to generate meaningful margin expansion, while also continuing to invest in our future infrastructure.”

Highlights of Aritzia’s Q4 results

The company’s revenues in the United States increased 9.4 percent to 369.1 million Canadian dollars, comprising 54.1 percent of net revenue. Retail net revenue increased 14.7 percent to 416.4 million Canadian dollars.

Ecommerce net revenue decreased 3.2 percent to 265.6 million Canadian dollars, comprising 38.9 percent of net revenue.

Gross profit margin increased 30 bps to 38.3 percent, net income decreased 35.2 percent to 24.2 million Canadian dollars, adjusted EBITDA decreased 8.6 percent to 72.5 million Canadian dollars and net income per diluted share decreased to 0.21 Canadian dollars, while adjusted net income per diluted share was 0.34 Canadian dollars per share.

Review of Aritzia’s FY24 performance

In the United States, net revenue increased by 9.4 percent to 1.23 billion Canadian dollars, while net revenue in Canada increased by 2.9 percent to 1.11 billion Canadian dollars.

Retail net revenue increased by 8.5 percent to 1.55 billion Canadian dollars, and eCommerce net revenue increased by 2 percent to 785.3 million Canadian dollars.

Gross profit decreased by 1.6 percent to 899 million Canadian dollars while gross profit margin was 38.5 percent, down 310 bps. Net income was 78.8 million Canadian dollars, a decrease of 58 percent and net income per diluted share was 0.69 Canadian dollars, a decrease of 57.7 percent. Adjusted EBITDA was 217.1 million Canadian dollars or 9.3 percent of net revenue, a decrease of 38.2 percent. Adjusted net income was 105.6 million Canadian dollars, a decrease of 50.9 percent, while adjusted net income per diluted share was 0.92 Canadian dollars, a decrease of 50.5 percent.

Aritzia expects 8 to 12 percent revenue growth for FY25

Based on quarter-to-date trends, Aritzia expects net revenue in the range of 475 million Canadian dollars to 495 million Canadian dollars in the first quarter of fiscal 2025, representing growth of approximately 3 percent to 7 percent. The Company expects gross profit margin to increase approximately 450 bps.

For fiscal 2025, the company expects net revenue in the range of 2.52 billion Canadian dollars to 2.62 billion Canadian dollars, representing growth of approximately 8 percent to 12 percent. This includes the contribution from retail expansion with 11 to 13 new boutiques and three to four boutique repositions.

Gross profit margin is expected to increase by approximately 400 to 450 bps compared to fiscal 2024 and adjusted EBITDA as a percentage of net revenue to increase by approximately 400 to 500 bps.