VANCOUVER, BC, Jan. 9, 2025
/CNW/ - Aritzia Inc. (TSX: ATZ) ("Aritzia", the "Company", "we" or
"our"), a design house with an innovative global platform offering
Everyday Luxury online and in its boutiques, today announced its
financial results for the third quarter ended December 1, 2024
("Q3 2025").
"Our strong performance in the third quarter of Fiscal 2025
underscores the progress we've made across key areas of our
business. We delivered a 12% increase in net revenue compared to
the third quarter of Fiscal 2024, as we drove accelerated momentum
in eCommerce and executed on our real estate expansion strategy,
including the opening of two brand-propelling flagships, one in
SoHo and one on Michigan Avenue. We are particularly pleased with
the outstanding performance of our business in the United States where net revenue increased
24%, illustrating the strength of the Aritzia brand and growing
affinity for our Everyday Luxury offering. We also continued to
meaningfully improve our Adjusted EBITDA margin, with a focus on
regaining our historical levels in the high-teens," said
Jennifer Wong, Chief Executive
Officer.
"Our momentum has continued into the fourth quarter, as a strong
inventory position and positive client response to our Winter
assortment helped drive record-breaking sales over the holiday
period. Looking to the future, we remain steadfast in advancing our
key growth levers. We have several initiatives underway to help
fuel an ongoing acceleration in eCommerce trends, as well as
another exciting pipeline of boutiques planned for the next fiscal
year. We still have a long runway for growth in the United States and remain confident that
our plans for the business will generate long-term profitable
growth," concluded Ms. Wong.
Third Quarter Highlights
For Q3 2025, compared to Q3 20241:
- Net revenue increased 11.5% to $728.7 million, with comparable sales2
growth of 6.6%
- United States net
revenue increased 23.6% to $403.7
million, comprising 55.4% of net revenue
- Retail net revenue increased 10.3% to $486.6 million
- eCommerce net revenue increased 14.0% to $242.1 million, comprising 33.2% of net
revenue
- Gross profit margin2 increased 430 bps to
45.8% from 41.5%
- Selling, general and administrative expenses as a
percentage of net revenue increased 90 bps to 29.6% from 28.7%
- Adjusted EBITDA2 increased 48.7% to
$136.4 million. Adjusted
EBITDA2 as a percentage of net revenue increased 470
bps to 18.7% from 14.0%
- Net income increased 71.9% to $74.1 million, or 10.2% as a percentage of net
revenue. Net income per diluted share was $0.63 per share, compared to $0.38 per share
- Adjusted Net Income2 increased 57.5% to
$83.0 million. Adjusted Net
Income per Diluted Share2 was $0.71 per share, compared to $0.47 per share
___________
|
1 All
references in this press release to "Q3 2025" are to our 13-week
period ended December 1, 2024, to "YTD 2025" are to our 39-week
period ended December 1, 2024, to "Q3 2024" are to our 13-week
period ended November 26, 2023, to "YTD 2024" are to our 39-week
period ended November 26, 2023, to "Fiscal 2024" are to our 53-week
period ended March 3, 2024, to "Fiscal 2025" are to our 52-week
period ending March 2, 2025, to "Fiscal 2026" are to our 52-week
period ending March 1, 2026, and to "Fiscal 2027" are to our
52-week period ending February 28, 2027.
|
2 Certain
metrics, including those expressed on an adjusted or comparable
basis, are non-IFRS measures or supplementary financial
measures. See "Comparable Sales, "Non-IFRS Measures and Retail
Industry Metrics" and "Selected Financial Information".
|
Third Quarter Results Compared to Q3 2024
(unaudited, in
thousands of Canadian dollars, unless
otherwise noted)
|
Q3
2025
|
Q3
2024
|
Change
|
|
|
% of net
revenue
|
|
% of net
revenue
|
%
|
% pts
|
Retail net
revenue
|
$
486,559
|
66.8 %
|
$
441,056
|
67.5 %
|
10.3 %
|
|
eCommerce net
revenue
|
242,142
|
33.2 %
|
212,468
|
32.5 %
|
14.0 %
|
|
Net revenue
|
$
728,701
|
100.0 %
|
$
653,524
|
100.0 %
|
11.5 %
|
|
|
|
|
|
|
|
|
Gross profit
|
$
333,485
|
45.8 %
|
$
270,937
|
41.5 %
|
23.1 %
|
4.3 %
|
|
|
|
|
|
|
|
Selling, general and
administrative ("SG&A")
|
$
215,649
|
29.6 %
|
$
187,373
|
28.7 %
|
15.1 %
|
0.9 %
|
|
|
|
|
|
|
|
Net income
|
$
74,068
|
10.2 %
|
$
43,093
|
6.6 %
|
71.9 %
|
3.6 %
|
|
|
|
|
|
|
|
Net income per diluted
share
|
$
0.63
|
|
$
0.38
|
|
65.8 %
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA2
|
$
136,428
|
18.7 %
|
$
91,763
|
14.0 %
|
48.7 %
|
4.7 %
|
|
|
|
|
|
|
|
Adjusted Net
Income2
|
$
83,000
|
11.4 %
|
$
52,701
|
8.1 %
|
57.5 %
|
3.3 %
|
|
|
|
|
|
|
|
Adjusted Net Income per
Diluted Share2
|
$
0.71
|
|
$
0.47
|
|
51.1 %
|
|
Net revenue increased 11.5% to $728.7 million, compared to $653.5 million in Q3 2024. Comparable
sales2 grew 6.6%, as all channels and all geographies
comped positively. Trends accelerated sequentially each month of
the quarter. Net revenue growth in the third quarter of Fiscal 2025
was impacted by the following two factors which contributed
approximately $25 million in the
third quarter of Fiscal 2024:
- The Digital Archive Sale, which did not reoccur this year,
contributed approximately $15 million
to eCommerce net revenue in Q3 2024, with $9
million impacting the United
States and $6 million
impacting Canada.
- The Company's annual warehouse sale, which shifted into the
second quarter in Fiscal 2025 compared to the third quarter in
Fiscal 2024, accounted for approximately $10
million in retail net revenue in Canada in the third quarter in Fiscal
2024.
In the United States, net
revenue increased 23.6% to $403.7
million, compared to $326.6
million in Q3 2024. This was primarily driven by further
acceleration in eCommerce growth and the Company's real estate
expansion strategy. Net revenue in Canada decreased 0.6% to $325.0 million, compared to $326.9 million in Q3 2024. The decline in revenue
growth in Canada was driven by the
shift of the annual warehouse sale and the occurrence of the
Digital Archive Sale in Q3 2024.
- Retail net revenue increased 10.3% to
$486.6 million, compared to
$441.1 million in Q3 2024. In
addition to a positive response to the Company's Fall and Winter
product, the increase was primarily driven by strong performance of
the Company's new and repositioned boutiques. Comparable sales
growth in existing boutiques was positive. In the last 12 months,
the Company opened 11 new boutiques and repositioned three
boutiques. Boutique count3 at the end of Q3 2025 totaled
127 compared to 117 boutiques at the end of Q3 2024.
- eCommerce net revenue increased 14.0% to $242.1 million, compared to $212.5 million in Q3 2024. The increase was
primarily driven by a positive response to the Company's Fall and
Winter product as well as the Company's investment in digital
marketing which fueled strong traffic growth, particularly in
the United States .
____________
|
3 There were
four Reigning Champ boutiques as at December 1, 2024 and November
26, 2023 which are excluded from the boutique count. There was one
Aritzia boutique closure in Fiscal 2024.
|
Gross profit increased 23.1% to $333.5 million, compared to $270.9 million in Q3 2024. Gross profit
margin2 was 45.8%, compared to 41.5% in Q3 2024. The
increase in gross profit margin of approximately 430 bps was
primarily driven by IMU improvements, lower markdowns, lower
warehousing costs and savings from the Company's smart spending
initiative, partially offset by higher freight costs.
SG&A expenses increased 15.1% to $215.6 million, compared to $187.4 million in Q3 2024. SG&A expenses were
29.6% of net revenue, compared to 28.7% in Q3 2024. The increase in
SG&A expenses was primarily driven by variable selling costs
associated with the increase in net revenue, as well as investments
in digital marketing, flagship locations, infrastructure projects
and technology initiatives.
Net income was $74.1
million, an increase of 71.9% compared to $43.1 million in Q3 2024, primarily attributable
to the factors described above as well as an increase in other
income due to unrealized foreign exchange gains. Net income per
diluted share was $0.63 per
share, an increase of 65.8% compared to $0.38 per share in Q3 2024.
Adjusted EBITDA2 was $136.4 million or 18.7% of net revenue, an
increase of 48.7% compared to $91.8
million or 14.0% of net revenue in Q3 2024.
Adjusted Net Income2 was $83.0 million, an increase of 57.5% compared to
$52.7 million in Q3 2024. Adjusted
Net Income per Diluted Share2 was $0.71 per share, an increase of 51.1% compared to
$0.47 per share in Q3 2024.
Cash and cash equivalents totaled $207.0 million, compared to $140.8 million at the end of Q3 2024.
Inventory at the end of Q3 2025 was $462.0 million, an increase of 16.4%, compared to
$397.0 million at the end of Q3
2024.
Capital cash expenditures (net of proceeds from lease
incentives)2 were $81.9
million, compared to $41.4
million in Q3 2024. The capital cash expenditures primarily
consist of capital investments in new and repositioned
boutiques.
YTD 2025 Compared to YTD 2024
(unaudited, in
thousands of Canadian dollars, unless
otherwise noted)
|
YTD
2025
|
YTD
2024
|
Change
|
|
|
% of net
revenue
|
|
% of net
revenue
|
%
|
% pts
|
Retail net
revenue
|
$
1,270,023
|
68.9 %
|
$
1,130,640
|
68.5 %
|
12.3 %
|
|
eCommerce net
revenue
|
572,971
|
31.1 %
|
519,740
|
31.5 %
|
10.2 %
|
|
Net revenue
|
$
1,842,994
|
100.0 %
|
$
1,650,380
|
100.0 %
|
11.7 %
|
|
|
|
|
|
|
|
|
Gross profit
|
$
800,515
|
43.4 %
|
$
637,734
|
38.6 %
|
25.5 %
|
4.8 %
|
|
|
|
|
|
|
|
SG&A
|
$
591,441
|
32.1 %
|
$
511,948
|
31.0 %
|
15.5 %
|
1.1 %
|
|
|
|
|
|
|
|
Net income
|
$
108,148
|
5.9 %
|
$
54,573
|
3.3 %
|
98.2 %
|
2.6 %
|
|
|
|
|
|
|
|
Net income per diluted
share
|
$
0.93
|
|
$
0.48
|
|
93.8 %
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA2
|
$
245,472
|
13.3 %
|
$
144,511
|
8.8 %
|
69.9 %
|
4.5 %
|
|
|
|
|
|
|
|
Adjusted Net
Income2
|
$
132,524
|
7.2 %
|
$
67,334
|
4.1 %
|
96.8 %
|
3.1 %
|
|
|
|
|
|
|
|
Adjusted Net Income per
Diluted Share2
|
$
1.14
|
|
$
0.59
|
|
93.2 %
|
|
|
|
|
|
|
|
|
Net revenue increased 11.7% to $1.8 billion, compared to $1.7 billion in YTD 2024. Comparable
sales2 growth was 5.3%. Results continue to be driven by
performance in the United States,
where net revenue increased 20.6% to $1.0
billion, compared to $857.4
million in YTD 2024. Net revenue in Canada increased 2.0% to $809.2 million, compared to $793.0 million in YTD 2024.
- Retail net revenue increased 12.3% to $1.3 billion, compared to $1.1 billion in YTD 2024. The increase in net
revenue was primarily driven by strong performance of the Company's
new and repositioned boutiques, as well as positive comparable
sales growth in its existing boutiques.
- eCommerce net revenue increased 10.2% to $573.0 million, compared to $519.7 million in YTD 2024. The increase was
primarily driven by inventory optimization and traffic growth in
the United States, fueled by the
Company's investments in digital marketing.
Gross profit increased 25.5% to $800.5 million, compared to $637.7 million in YTD 2024. Gross profit
margin2 was 43.4% compared to 38.6% in YTD 2024. The
increase in gross profit margin of approximately 480 bps was
primarily driven by lower markdowns, IMU improvements and lower
warehousing costs and savings from the Company's smart spending
initiative, partially offset by higher freight costs.
SG&A expenses increased 15.5% to $591.4 million, compared to $511.9 million in YTD 2024. SG&A expenses
were 32.1% of net revenue compared to 31.0% in YTD 2024. The
increase in SG&A expenses was primarily driven by investments
in digital marketing to protect and propel the Aritzia brand, as
well as investments in infrastructure projects and technology
initiatives to support the Company's growth.
Net income was $108.1
million, an increase of 98.2% compared to $54.6 million in YTD 2024, primarily attributable
to the factors described above as well as an increase in other
income, partially offset by an increase in stock-based compensation
expense mainly due to the effect of mark-to-market changes. Net
income per diluted share was $0.93, an increase of 93.8%, compared to
$0.48 per share in YTD 2024.
Adjusted EBITDA2 was $245.5 million, or 13.3% of net revenue, an
increase of 69.9%, compared to $144.5
million, or 8.8% of net revenue in YTD 2024.
Adjusted Net Income2 was $132.5 million, an increase of 96.8%, compared to
$67.3 million in YTD 2024.
Adjusted Net Income per Diluted Share2 was
$1.14, an increase of 93.2%, compared
to $0.59 in YTD 2024.
Capital cash expenditures (net of proceeds from
lease incentives)2 were $187.2 million, compared to $113.6 million in YTD 2024. The capital cash
expenditures primarily consist of capital investments in new and
repositioned boutiques.
Outlook
Aritzia expects the following for the fourth quarter of Fiscal
2025:
Based on quarter-to-date trends, Aritzia expects net revenue in
the range of $830 million to
$850 million. This represents growth
of approximately 22% to 25% or growth of approximately 28% to 31%
excluding the 53rd week in the fourth quarter last year.
The Company expects gross profit margin to increase
approximately 400 bps and SG&A as a percentage of net revenue
to decrease approximately 100 bps to 200 bps for the fourth quarter
of Fiscal 2025 compared to the fourth quarter of Fiscal 2024.
Aritzia expects the following for Fiscal 2025:
- Net revenue in the range of $2.67
billion to $2.69
billion4, representing growth of approximately
15% from Fiscal 2024 (excluding the 53rd week in Fiscal 2024, this
represents growth of approximately 16% to 17%). This includes the
contribution from retail expansion with 12 new
boutiques5 and 3 boutique repositions5. All
expected openings are in the United
States. Ten new boutiques and three boutique repositions
have already opened year-to-date.
- Gross profit margin to increase approximately 450 bps compared
to Fiscal 2024, reflecting IMU improvements, lower warehousing
costs, lower markdowns and savings from the Company's smart
spending initiative, partially offset by higher freight costs.
- SG&A as a percentage of net revenue to be approximately
flat to up 50 bps compared to Fiscal 2024, driven by investments in
digital marketing to protect and propel the Aritzia brand, as well
as investments in key strategic initiatives to drive the Company's
growth.
- Adjusted EBITDA as a percentage of net revenue to increase
approximately 400 bps to 450 bps.
- Capital cash expenditures (net of proceeds from lease
incentives)2 of approximately $230 million. This includes approximately
$190 million related to investments
in new and repositioned boutiques expected to open in Fiscal 2025
and Fiscal 2026, as well as $40
million primarily related to the Company's distribution
centre network and technology investments.
- Depreciation and amortization of approximately $80 million.
The foregoing outlook is based on management's current
strategies and may be considered forward-looking information under
applicable securities laws. Such outlook is based on estimates and
assumptions made by management regarding, among other things,
general economic and geopolitical conditions and the competitive
environment. This outlook is intended to provide readers
management's projections for the Company as of the date of this
press release. Readers are cautioned that actual results may vary
materially from this outlook and that the information in the
outlook may not be appropriate for other purposes. See also the
"Forward-Looking Information" section of this press release and the
"Forward-Looking Information" and "Risk Factors" sections of our
Management's Discussion & Analysis for the third quarter of
Fiscal 2025 dated January 9, 2025
(the "Q3 2025 MD&A"), for Fiscal 2024 dated May 2, 2024 (the "Fiscal 2024 MD&A") and the
Company's annual information form for Fiscal 2024 dated
May 2, 2024 (the "Fiscal 2024
AIF").
In addition, a discussion of the Company's long-term financial
plan is contained in the Company's press release dated October 27, 2022, "Aritzia Presents its Fiscal
2027 Strategic and Financial Plan, Powering Stronger". This press
release is available on the System for Electronic Data Analysis and
Retrieval + ("SEDAR+") at www.sedarplus.com and on our website at
investors.aritzia.com.
____________
|
4 Compared
to the Company's previous outlook for net revenue of $2.54 billion
to $2.60 billion, representing growth of approximately 9% to
11%
|
5 Compared
to the Company's previous outlook of 12 to 13 new boutiques and 3
to 4 boutique repositions
|
Normal Course Issuer Bid ("NCIB")
On January 18, 2024, the Company
announced that the Toronto Stock Exchange ("TSX") had accepted its
notice of intention to proceed with an NCIB ("2024 NCIB") to
repurchase and cancel up to 3,515,740 of its subordinate voting
shares, representing approximately 5% of the public float of
70,314,808 subordinate voting shares, during the 12-month period
commencing January 22, 2024 and
ending January 21, 2025.
On February 21, 2024, the Company
announced it had entered into an automatic share purchase plan
("ASPP") with a designated broker for the purpose of permitting the
Company to purchase its subordinate voting shares under the 2024
NCIB during predetermined blackout periods. The Company plans to
file a notice of intention with the TSX to renew its NCIB in
January 2025 and enter into an ASPP
thereafter.
Between January 22, 2024 and
January 8, 2025, 134,200 subordinate
voting shares were repurchased for cancellation at an average price
of $44.00 per subordinate voting
share for total cash consideration of $5.9
million (including commissions) under the 2024 NCIB.
Conference Call Details
A conference call to discuss the Company's third quarter results
is scheduled for Thursday, January 9,
2025, at 1:30 p.m. PT /
4:30 p.m. ET. To participate, please
dial 1-844-763-8274 (North America
toll-free) or 1-647-484-8814 (Toronto and overseas long-distance). The call
is also accessible via webcast at
https://investors.aritzia.com/events-and-presentations/. A
recording will be available shortly after the conclusion of the
call. To access the replay, please dial 1-855-669-9658 and the
access code 5238527. An archive of the webcast will be available on
Aritzia's website.
About Aritzia
Aritzia is a design house with an innovative global platform. We
are creators and purveyors of Everyday Luxury, home to an extensive
portfolio of exclusive brands for every function and individual
aesthetic. We're about good design, quality materials and timeless
style — all with the wellbeing of our People and Planet in
mind.
Founded in 1984 in Vancouver,
Canada, we pride ourselves on creating immersive, highly
personalized shopping experiences at aritzia.com and in our 125+
boutiques throughout North America
— for everyone, everywhere.
Our Approach
Aritzia means style, not trend, and quality over everything. We
treat each in-house label as its own atelier, united by premium
fabrics, meticulous construction and an of-the-moment point of
view. We handpick fabrics from the world's best mills for their
feel, function and ability to last. We obsess over proportion, fit
and that just-right silhouette. From hand-painted prints to the art
of pocket placement, our innovative design studio considers and
reconsiders each detail to create essentials you'll reach for
again, and again, and again.
Everyday Luxury. To Elevate Your World.™
Comparable Sales
Comparable sales is a retail industry metric used to explain our
total combined revenue growth (decline) (in absolute dollars or
percentage terms) in eCommerce and established boutiques.
Non-IFRS Measures and Retail Industry Metrics
This press release makes reference to certain non-IFRS measures
and certain retail industry metrics. These measures are not
recognized measures under IFRS, do not have a standardized meaning
prescribed by IFRS, and are therefore unlikely to be comparable to
similar measures presented by other companies. Rather, these
measures are provided as additional information to complement those
IFRS measures by providing further understanding of our results of
operations from management's perspective. Accordingly, these
measures should not be considered in isolation nor as a substitute
for analysis of our financial information reported under IFRS. We
use non-IFRS financial measures including "EBITDA", "Adjusted
EBITDA", and "Adjusted Net Income"; non-IFRS ratios including
"Adjusted Net Income per Diluted Share", "Adjusted EBITDA as a
percentage of net revenue", and "Adjusted Net Income as a
percentage of net revenue"; and capital management measures
including "capital cash expenditures (net of proceeds from lease
incentives)" and "free cash flow." This press release also
makes reference to "gross profit margin" and "comparable sales"
which are commonly used operating metrics in the retail industry
but may be calculated differently by other retailers. Gross profit
margin and comparable sales are considered supplementary
financial measures under applicable securities laws. These non-IFRS
measures and retail industry metrics are used to provide investors
with supplemental measures of our operating performance and thus
highlight trends in our core business that may not otherwise be
apparent when relying solely on IFRS measures. We believe that
securities analysts, investors and other interested parties
frequently use non-IFRS measures and retail industry metrics in the
evaluation of issuers. Our management also uses non-IFRS measures
and retail industry metrics in order to facilitate operating
performance comparisons from period to period, to prepare annual
operating budgets and forecasts and to determine components of
management compensation. Certain information about non-IFRS
financial measures, non-IFRS ratios, capital management measures
and supplementary financial measures is found in the Q3 2025
MD&A and is incorporated by reference. This information is
found in the sections entitled "How We Assess the Performance of
our Business", "Non-IFRS Measures and Retail Industry Metrics" and
"Selected Financial Information" of the Q3 2025 MD&A which is
available under the Company's profile on SEDAR+ at
www.sedarplus.com. Reconciliations for each non-IFRS financial
measure can be found in this press release under the heading
"Selected Financial Information".
Forward-Looking Information
Certain statements made in this document may constitute
forward-looking information under applicable securities laws.
Statements containing forward-looking information are neither
historical facts nor assurances of future performance, but instead,
provide insights regarding management's current expectations and
plans and allows investors and others to better understand the
Company's anticipated business strategy, financial position,
results of operations and operating environment. Readers are
cautioned that such information may not be appropriate for other
purposes. Although the Company believes that the forward-looking
statements are based on information, assumptions and beliefs that
are current, reasonable, and complete, such information is
necessarily subject to a number of business, economic, competitive
and other risk factors that could cause actual results to differ
materially from management's expectations and plans as set forth in
such forward-looking information.
Specific forward-looking information in this document include,
but are not limited to, statements relating to:
- our Fiscal 2027 strategic and financial plan and anticipated
results therefrom,
- our fourth quarter Fiscal 2025 financial outlook, including our
expected outlook for net revenue and related impacts, gross profit
margin, and SG&A as a percentage of net revenue,
- our full Fiscal 2025 financial outlook, including our expected
outlook for net revenue, new and repositioned boutiques and timing
of openings, gross profit margin, SG&A as a percentage of net
revenue, Adjusted EBITDA as a percentage of net revenue, capital
cash expenditures (net of proceeds from lease incentives) and the
composition thereof, and depreciation and amortization,
- our focus on advancing our key growth levers,
- future strategic initiatives and the anticipated eCommerce
trends resulting therefrom,
- our pipeline of boutiques planned for Fiscal 2026,
- our expectations with respect to future growth in the United States and our ability to generate
long-term profitable growth, and
- our potential future purchases of subordinate voting shares
pursuant to the 2024 NCIB and our potential renewal thereof and
entry into an ASPP thereafter.
Particularly, information regarding our expectations of future
results, targets, performance achievements, intentions, prospects,
opportunities or other characterizations of future events or
developments or the markets in which we operate is forward-looking
information. Often but not always, forward-looking statements can
be identified by the use of forward-looking terminology such as
"plans", "targets", "expects", "is expected", "an opportunity
exists", "budget", "scheduled", "estimates", "outlook",
"forecasts", "projection", "prospects", "strategy", "intends",
"anticipates", "believes", or positive or negative variations of
such words and phrases or state that certain actions, events or
results "may", "could", "would", "might", "will", "will be taken",
"occur", "continue", or "be achieved".
Forward-looking statements are based on information currently
available to management and on estimates and assumptions, including
assumptions about future economic conditions and courses of action.
Examples of material estimates and assumptions and beliefs made by
management in preparing such forward looking statements include,
but are not limited to:
- anticipated growth across our retail and eCommerce
channels,
- anticipated growth in the United
States and Canada,
- general economic and geopolitical conditions, including no
unforeseen changes to applicable duties, tariffs and trade
restrictions,
- changes in laws, rules, regulations, and global standards,
- our competitive position in our industry,
- our ability to keep pace with changing consumer
preferences,
- no public health related restrictions impacting client shopping
patterns or incremental direct costs related to health and safety
measures,
- our future financial outlook,
- our ability to drive ongoing development and innovation of our
exclusive brands and product categories,
- our ability to realize our eCommerce 2.0 strategy and optimize
our omni-channel capabilities,
- our expectations for optimized inventory composition,
- our ability to recruit and retain exceptional talent,
- our expectations regarding new boutique openings, repositioning
of existing boutiques, and the timing thereof, and growth of our
boutique network and annual square footage,
- our ability to mitigate business disruptions, including our
sourcing and production activities,
- our expectations for capital expenditures,
- our ability to generate positive cash flow,
- anticipated run rate savings from our smart spending
initiative,
- availability of sufficient liquidity,
- warehousing costs and expedited freight costs, and
- currency exchange and interest rates.
In addition to the assumptions noted above, specific assumptions
in support of our Fiscal 2025 outlook include:
- macroeconomic uncertainty,
- improved product assortment mix,
- anticipated benefits from product margin improvements including
IMU improvements and lower markdowns,
- our approach and expectations with respect to our real estate
expansion strategy, including boutique payback period expectations
and timing of openings, that our planned boutique openings and
repositions will proceed as anticipated and on-time,
- anticipated total square footage growth of our boutiques,
- infrastructure investments including our new distribution
centre in Delta, British Columbia,
new and repositioned flagship boutiques, expanded support office
space, and eCommerce technology to drive eCommerce 2.0,
- cost efficiencies, including estimated annualized run rate
savings of approximately $60 million
from our smart spending initiative,
- subsiding transitory cost pressures, including pre-opening
lease amortization for our new distribution centre in the
Greater Toronto Area and flagship
boutiques, and warehouse costs related to inventory management,
and
- foreign exchange rates for the fourth quarter of Fiscal 2025:
USD:CAD = 1.42.
Given the current challenging operating environment, there can
be no assurances regarding: (a) the macroeconomic impacts on
Aritzia's business, operations, labour force, supply chain
performance and growth strategies; (b) Aritzia's ability to
mitigate such impacts, including ongoing measures to enhance
short-term liquidity, contain costs and safeguard the business; (c)
general economic conditions and impacts to consumer discretionary
spending and shopping habits (including impacts from changes to
interest rate environments); (d) credit, market, currency,
commodity market, inflation, interest rates, global supply chains,
operational, and liquidity risks generally; (e) geopolitical events
including no unforeseen changes in applicable duties, tariffs and
trade restrictions; (f) public health related limitations or
restrictions that may be placed on servicing our clients or the
duration of any such limitations or restrictions; and (g) other
risks inherent to Aritzia's business and/or factors beyond its
control which could have a material adverse effect on the
Company.
Many factors could cause our actual results, performance,
achievements or future events or developments to differ materially
from those expressed or implied by the forward-looking statements,
including, without limitation, the factors discussed in the "Risk
Factors" section of our Q3 2025 MD&A and Fiscal 2024
MD&A, and the Company's Fiscal 2024 AIF which are incorporated
by reference into this document. A copy of the Q3 2025 MD&A,
the Fiscal 2024 MD&A and the Fiscal 2024 AIF and the Company's
other publicly filed documents can be accessed under the Company's
profile on SEDAR+ at www.sedarplus.com.
The Company cautions that the foregoing list of risk factors and
uncertainties is not exhaustive and other factors could also
adversely affect its results. We operate in a highly competitive
and rapidly changing environment in which new risks often emerge.
It is not possible for management to predict all risks, nor assess
the impact of all risk factors on our business or the extent to
which any factor, or combination of factors, may cause actual
results to differ materially from those contained in any
forward-looking statements. Readers are urged to consider the
risks, uncertainties and assumptions carefully in evaluating the
forward-looking information and are cautioned not to place undue
reliance on such information. The forward-looking information
contained in this document represents our expectations as of the
date of this document (or as of the date they are otherwise stated
to be made) and are subject to change after such date. We disclaim
any intention, obligation or undertaking to update or revise any
forward-looking information, whether written or oral, as a result
of new information, future events or otherwise, except as required
under applicable securities laws.
Selected Financial Information
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in
thousands of Canadian dollars, unless otherwise
noted)
|
Q3
2025
|
Q3
2024
|
YTD 2025
|
YTD
2024
|
|
|
% of net
revenue
|
|
% of net
revenue
|
|
% of net
revenue
|
|
% of net
revenue
|
Net
revenue
|
$ 728,701
|
100.0 %
|
$
653,524
|
100.0 %
|
$
1,842,994
|
100.0 %
|
$
1,650,380
|
100.0 %
|
Cost of goods
sold
|
395,216
|
54.2 %
|
382,587
|
58.5 %
|
1,042,479
|
56.6 %
|
1,012,646
|
61.4 %
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
333,485
|
45.8 %
|
270,937
|
41.5 %
|
800,515
|
43.4 %
|
637,734
|
38.6 %
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative
|
215,649
|
29.6 %
|
187,373
|
28.7 %
|
591,441
|
32.1 %
|
511,948
|
31.0 %
|
Stock-based
compensation expense
|
10,244
|
1.4 %
|
9,449
|
1.4 %
|
30,997
|
1.7 %
|
16,428
|
1.0 %
|
|
|
|
|
|
|
|
|
|
Income from
operations
|
107,592
|
14.8 %
|
74,115
|
11.3 %
|
178,077
|
9.7 %
|
109,358
|
6.6 %
|
Finance
expense
|
12,750
|
1.7 %
|
13,637
|
2.1 %
|
38,173
|
2.1 %
|
36,662
|
2.2 %
|
Other expense
(income)
|
(9,918)
|
(1.4) %
|
(1,726)
|
(0.3) %
|
(15,409)
|
(0.8) %
|
(4,809)
|
(0.3) %
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
104,760
|
14.4 %
|
62,204
|
9.5 %
|
155,313
|
8.4 %
|
77,505
|
4.7 %
|
Income tax
expense
|
30,692
|
4.2 %
|
19,111
|
2.9 %
|
47,165
|
2.6 %
|
22,932
|
1.4 %
|
|
|
|
|
|
|
|
|
|
Net
income
|
$
74,068
|
10.2 %
|
$
43,093
|
6.6 %
|
$
108,148
|
5.9 %
|
$
54,573
|
3.3 %
|
|
|
|
|
|
|
|
|
|
Other Performance
Measures:
|
|
|
|
|
|
|
|
|
Year-over-year net
revenue growth
|
11.5 %
|
|
4.6 %
|
|
11.7 %
|
|
5.9 %
|
|
Comparable
sales6,7 growth (decline)
|
6.6 %
|
|
0.5 %
|
|
5.3 %
|
|
(0.2) %
|
|
Capital cash
expenditures (net of proceeds from lease
incentives)7
|
$
(81,948)
|
|
$
(41,368)
|
|
$
(187,175)
|
|
$
(113,575)
|
|
Free cash
flow7
|
$ 103,996
|
|
$
171,607
|
|
$
30,000
|
|
$
76,631
|
|
NET REVENUE BY GEOGRAPHIC LOCATION
(unaudited,
in thousands of Canadian dollars)
|
Q3
2025
|
Q3
2024
|
YTD
2025
|
YTD
2024
|
|
|
|
|
|
United States net
revenue
|
$
403,720
|
$
326,605
|
$
1,033,776
|
$
857,355
|
Canada net
revenue
|
324,981
|
326,919
|
809,218
|
793,025
|
|
|
|
|
|
Net revenue
|
$
728,701
|
$
653,524
|
$
1,842,994
|
$
1,650,380
|
CONSOLIDATED CASH FLOWS
(unaudited, in
thousands of Canadian dollars)
|
Q3
2025
|
Q3
2024
|
YTD
2025
|
YTD
2024
|
|
|
|
|
|
Net cash generated from
(used in) operating activities
|
$
214,867
|
$
241,079
|
$
297,161
|
$
259,135
|
Net cash generated from
(used in) financing activities
|
(28,170)
|
(130,971)
|
(56,731)
|
(68,901)
|
Cash used in investing
activities
|
(85,507)
|
(45,344)
|
(197,584)
|
(135,728)
|
Effect of exchange rate
changes on cash and cash equivalents
|
1,834
|
(476)
|
884
|
(212)
|
|
|
|
|
|
Change in cash and cash
equivalents
|
$
103,024
|
$
64,288
|
$
43,730
|
$
54,294
|
_____________
|
6 Please see
the "Comparable Sales" section above for more details.
|
7 Please see
the "Non-IFRS Measures and Retail Industry Metrics" section above
for more details.
|
RECONCILIATION OF NET INCOME TO EBITDA, ADJUSTED EBITDA AND
ADJUSTED NET INCOME
(unaudited, in
thousands of Canadian dollars, unless otherwise
noted)
|
Q3
2025
|
Q3
2024
|
YTD
2025
|
YTD
2024
|
Reconciliation of
Net Income to EBITDA and Adjusted EBITDA:
|
|
|
|
|
Net income
|
$
74,068
|
$
43,093
|
$
108,148
|
$
54,573
|
Depreciation and
amortization
|
20,275
|
16,847
|
59,052
|
46,352
|
Depreciation on
right-of-use assets
|
26,459
|
25,524
|
79,690
|
75,358
|
Finance
expense
|
12,750
|
13,637
|
38,173
|
36,662
|
Income tax
expense
|
30,692
|
19,111
|
47,165
|
22,932
|
|
|
|
|
|
EBITDA
|
164,244
|
118,212
|
332,228
|
235,877
|
|
|
|
|
|
Adjustments to
EBITDA:
|
|
|
|
|
Stock-based
compensation expense
|
10,244
|
9,449
|
30,997
|
16,428
|
Rent impact from IFRS
16, Leases8
|
(37,634)
|
(36,390)
|
(114,111)
|
(106,270)
|
Unrealized loss on
equity derivatives contracts
|
(292)
|
390
|
(6,129)
|
11,623
|
Fair value adjustment
of non-controlling interest ("NCI") in exchangeable shares
liability
|
—
|
—
|
—
|
(15,000)
|
CYC Design Corporation
("CYC") related costs and other expenses
|
(134)
|
102
|
2,487
|
1,853
|
|
|
|
|
|
Adjusted
EBITDA
|
$
136,428
|
$
91,763
|
$
245,472
|
$
144,511
|
Adjusted EBITDA as a
percentage of net revenue
|
18.7 %
|
14.0 %
|
13.3 %
|
8.8 %
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$
74,068
|
$
43,093
|
$
108,148
|
$
54,573
|
Adjustments to net
income:
|
|
|
|
|
Stock-based
compensation expense
|
10,244
|
9,449
|
30,997
|
16,428
|
Unrealized loss on
equity derivatives contracts
|
(292)
|
390
|
(6,129)
|
11,623
|
Fair value adjustment
of NCI in exchangeable shares liability
|
—
|
—
|
—
|
(15,000)
|
CYC related costs and
other expenses
|
(134)
|
102
|
2,487
|
1,853
|
Related tax
effects
|
(886)
|
(333)
|
(2,979)
|
(2,143)
|
Adjusted Net
Income
|
$
83,000
|
$
52,701
|
$
132,524
|
$
67,334
|
Adjusted Net Income
as a percentage of net revenue
|
11.4 %
|
8.1 %
|
7.2 %
|
4.1 %
|
Weighted average
number of diluted shares outstanding (thousands)
|
116,836
|
113,332
|
115,860
|
114,232
|
Adjusted Net Income
per Diluted Share
|
$
0.71
|
$
0.47
|
$
1.14
|
$
0.59
|
8 RENT IMPACT FROM IFRS 16,
LEASES
|
|
|
|
|
(unaudited, in
thousands of Canadian dollars)
|
Q3
2025
|
Q3
2024
|
YTD
2025
|
YTD
2024
|
|
|
|
|
|
Depreciation of
right-of-use assets, excluding fair value adjustments
|
$
(26,392)
|
$
(25,391)
|
$
(79,251)
|
$
(74,959)
|
Interest expense on
lease liabilities
|
(11,242)
|
(10,999)
|
(34,860)
|
(31,311)
|
|
|
|
|
|
Rent impact from IFRS
16, leases
|
$
(37,634)
|
$
(36,390)
|
$
(114,111)
|
$
(106,270)
|
RECONCILIATION OF COMPARABLE SALES TO NET REVENUE
(unaudited, in
thousands of Canadian dollars)
|
Q3
2025
|
Q3
2024
|
Fiscal
2025
|
Fiscal
2024
|
Comparable
sales
|
$
660,120
|
$
573,537
|
$
1,662,152
|
$
1,455,304
|
Non-comparable
sales
|
68,581
|
79,987
|
180,842
|
195,076
|
|
|
|
|
|
Net revenue
|
$
728,701
|
$
653,524
|
$
1,842,994
|
$
1,650,380
|
RECONCILIATION OF CASH USED IN INVESTING ACTIVITIES TO
CAPITAL CASH EXPENDITURES (NET OF PROCEEDS FROM LEASE
INCENTIVES)
(unaudited, in
thousands of Canadian dollars)
|
Q3
2025
|
Q3
2024
|
YTD
2025
|
YTD
2024
|
Cash used in investing
activities
|
$
(85,507)
|
$
(45,344)
|
$
(197,584)
|
$
(135,728)
|
Contingent
consideration payout, net relating to the acquisition of CYC
|
—
|
—
|
—
|
6,303
|
Proceeds from lease
incentives
|
3,559
|
3,976
|
10,409
|
15,850
|
|
|
|
|
|
Capital cash
expenditures (net of proceeds from lease incentives)
|
$
(81,948)
|
$
(41,368)
|
$
(187,175)
|
$
(113,575)
|
RECONCILIATION OF NET CASH GENERATED FROM OPERATING
ACTIVITIES TO FREE CASH FLOW
(unaudited, in
thousands of Canadian dollars)
|
Q3
2025
|
Q3
2024
|
YTD
2025
|
YTD
2024
|
Net cash generated from
(used in) operating activities
|
$
214,867
|
$
241,079
|
$
297,161
|
$
259,135
|
Interest
paid
|
1,431
|
2,328
|
3,086
|
5,148
|
Proceeds from lease
incentives
|
3,559
|
3,976
|
10,409
|
15,850
|
Repayments of principal
on lease liabilities
|
(30,354)
|
(30,432)
|
(83,072)
|
(74,077)
|
Purchase of property,
equipment and intangible assets
|
(85,507)
|
(45,344)
|
(197,584)
|
(129,425)
|
|
|
|
|
|
Free cash
flow
|
$
103,996
|
$
171,607
|
$
30,000
|
$
76,631
|
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(interim periods
unaudited, in thousands of Canadian dollars)
|
As at
December 1, 2024
|
As at
March 3,
2024
|
As at
November 26,
2023
|
Assets
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
207,007
|
$
163,277
|
$
140,804
|
Accounts
receivable
|
21,379
|
18,473
|
19,759
|
Income taxes
recoverable
|
7,191
|
7,055
|
16,482
|
Inventory
|
461,990
|
340,145
|
397,002
|
Prepaid expenses and
other current assets
|
52,410
|
37,270
|
34,510
|
Total current
assets
|
749,977
|
566,220
|
608,557
|
Property and
equipment
|
617,458
|
431,365
|
406,887
|
Intangible
assets
|
89,385
|
84,975
|
85,082
|
Goodwill
|
198,846
|
198,846
|
198,846
|
Right-of-use
assets
|
707,214
|
632,291
|
630,370
|
Other assets
|
6,131
|
5,164
|
5,422
|
Deferred tax
assets
|
16,169
|
27,272
|
14,938
|
|
|
|
|
Total
assets
|
$
2,385,180
|
$
1,946,133
|
$
1,950,102
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
Accounts payable and
accrued liabilities
|
$
354,331
|
$
212,835
|
$
248,450
|
Income taxes
payable
|
2,096
|
1,606
|
—
|
Current portion of
lease liabilities
|
88,718
|
107,322
|
116,889
|
Deferred
revenue
|
136,955
|
81,669
|
95,235
|
Total current
liabilities
|
582,100
|
403,432
|
460,574
|
Lease
liabilities
|
806,092
|
698,564
|
682,761
|
Other non-current
liabilities
|
16,909
|
13,451
|
11,218
|
Deferred tax
liabilities
|
23,157
|
23,191
|
22,067
|
Total
liabilities
|
1,428,258
|
1,138,638
|
1,176,620
|
|
|
|
|
Shareholders'
equity
|
|
|
|
Share
capital
|
346,165
|
307,737
|
292,911
|
Contributed
surplus
|
103,957
|
96,249
|
92,857
|
Retained
earnings
|
510,053
|
407,337
|
391,950
|
Accumulated other
comprehensive loss
|
(3,253)
|
(3,828)
|
(4,236)
|
Total shareholders'
equity
|
956,922
|
807,495
|
773,482
|
|
|
|
|
Total liabilities
and shareholders' equity
|
$
2,385,180
|
$
1,946,133
|
$
1,950,102
|
BOUTIQUE COUNT SUMMARY3
|
Q3
2025
|
Q3
2024
|
YTD
2025
|
YTD
2024
|
|
|
|
|
|
Number of boutiques,
beginning of period
|
122
|
116
|
119
|
114
|
New
boutiques
|
5
|
1
|
8
|
3
|
|
|
|
|
|
Number of boutiques,
end of period
|
127
|
117
|
127
|
117
|
Repositioned
boutiques
|
1
|
1
|
2
|
2
|
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SOURCE Aritzia Inc.