New styles and outerwear offering drive revenue growth at Aritzia

For the third quarter, Aritzia net revenue increased by 4.6 percent to 653.5 million dollars, resulting in a three year compound annual growth rate (CAGR) of 32.9 percent.

Comparable sales growth for the quarter was 0.5 percent, compared to 22.8 percent in the third quarter of 2023.

"Although the consumer environment remains mixed, we generated sales growth across all of our geographies and channels, as clients responded well to our new styles and outerwear offering," said Jennifer Wong, the company’s chief executive officer in a media release.

“Looking ahead, we expect to launch spring 2024 with an improved product assortment and inventory position. We are also accelerating our real estate expansion strategy into fiscal 2025 and diligently working to increase our ecommerce momentum through strategic investments in leadership, digital marketing and technology," added Wong.

Highlights of Aritzia’s Q3 performance

In the United States, the company’s net revenue increased by 4.2 percent to 326.6 million dollars, while net revenue in Canada increased by 5.1 percent to 326.9 million dollars.

Retail net revenue increased by 4.2 percent to 441.1 million dollars driven by strong performance of the company's new and repositioned boutiques. Boutique count at the end of the third quarter totaled 117.

Ecommerce net revenue increased by 5.5 percent to 212.5 million dollars driven by growth in Canada as well as the company's digital warehouse sale in Q3 2024.

Gross profit increased by 0.1 percent to 270.9 million dollars, while gross profit margin was 41.5 percent, compared to 43.3 percent in Q3 2023. Net income was 43.1 million dollars, a decrease of 39.1 percent and net income per diluted share was 38 cents per share, a decrease of 37.7 percent.

Adjusted EBITDA for the quarter was 91.8 million dollars or 14 percent of net revenue, a decrease of 23.3 percent, adjusted net income was 52.7 million dollars, a decrease of 31.2 percent and adjusted net income per diluted share was 47 cents per share, a decrease of 29.9 percent.

Aritzia’s year-to-date revenues increase by 5.9 percent

Net revenue for the nine-month period increased by 5.9 percent to 1.7 billion dollars with a comparable sales decline of 0.2 percent. Results continued to be driven by performance in the United States, where net revenue increased by 9.4 percent to 857.4 million dollars, while in Canada, net revenue increased by 2.4 percent to 793 million dollars.

Retail net revenue for the period increased by 6.4 percent to 1.13 billion dollars led by strong performance of new boutiques in the United States, partially offset by softer comparable sales.

Ecommerce net revenue increased by 4.9 percent to 519.7 million dollars.

Gross profit decreased by 5.1 percent to 637.7 million dollars and gross profit margin decreased to 38.6 percent. Net income was 54.6 million dollars, a decrease of 63.7 percent, while net income per diluted share was 48 cents, a decrease of 63.1 percent.

Adjusted EBITDA was 144.5 million dollars or 8.8 percent of net revenue, a decrease of 46.8 percent, adjusted net income was 67.3 million dollars, a decrease of 59.9 percent and adjusted net income per diluted share was 59 cents, a decrease of 59.6 percent.

Aritzia forecasts Q4 revenue growth between 5 to 8 percent

Based on quarter-to-date trends, Aritzia expects net revenue in the range of 670 million dollars to 690 million dollars in the fourth quarter. This represents growth of approximately 5 percent to 8 percent. The company expects gross profit margin to be flat to slightly up.

For fiscal 2024, Aritzia expects net revenue in the range of 2.32 billion dollars to 2.34 billion dollars, representing growth of approximately 6 percent to 7 percent compared to the company's previous outlook of 2.25 billion dollars to 2.35 billion dollars.

Compared to the company's prior outlook of eight new boutiques and four boutique expansions, two new boutiques are now expected to open in fiscal 2025.

Gross profit margin is expected to decrease by approximately 300 bps compared to fiscal 2023.