Aritzia ups FY revenue outlook on strong Q2

Canadian womenswear brand Aritzia has increased its full-year revenue guidance after reporting a 50 percent sales increase in the second quarter.

In the three months to August 28, sales came in at 525.5 million Canadian dollars, up from the 350.1 million Canadian dollars it posted a year earlier. On a comparable basis, sales were up 28.3 percent.

The better than expected results were driven by a strong client response to the brand’s new product assortment across all geographies and all channels, said CEO Jennifer Wong.

“Our performance in the US continued to surge, with revenue growth of 80 percent, as our existing and new boutiques once again outperformed expectations, underscoring our growing brand awareness,” she said.

Aritzia’s e-commerce business in the US and Canada grew 33 percent during the period.

Profits widen

The brand’s net income widened to 46.3 million Canadian dollars from 39.8 million Canadian dollars a year earlier.

The company said it expects its strong momentum to continue into the third quarter, with revenue estimated to be in the range of 565 million Canadian dollars to 590 million Canadian dollars, representing growth of between 25 percent and 30 percent.

It expects this growth to reflect continued strength in the US across retail and e-commerce channels, combined with a “strong recovery” of the company's business in Canada.

For the full year, Aritzia has upped its revenue outlook and now expects it to be in the range of 2 billion Canadian dollars to 2.05 billion Canadian dollars, compared to its previous guidance of between 1.875 billion Canadian dollars and 1.9 billion Canadian dollars.

That would represent year-on-year growth of between 34 percent and 37 percent.

However, it expects gross profit margin to decrease by approximately 100 bps to 150 bps compared to last year amid ongoing supply chain disruptions, inflationary pressure, and discontinued Covid-19 relief subsidies.