Aritzia sets sights on U.S. growth following pandemic-era success (2024)

Fashion retailer Aritzia Inc. is aiming to significantly grow its brick-and-mortar footprint in the United States and expand its e-commerce offerings as part of a five-year plan to extend its pandemic-era success.

The Vancouver-based company, which has 67 stores in Canada and 46 in the U.S., laid out the growth strategy that will guide it through 2027 during its first investor day on Thursday. For the 2027 fiscal year, the company plans to bring in between $3.5 and $3.8 billion in net revenue — up from an estimated $2 billion in fiscal 2023 — and to have adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of 19 per cent of revenue, up from 15.7 per cent in the second quarter of fiscal 2023.

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“The majority of our stores are in Canada but the growth in the coming years will be primarily from the U.S.,” recently minted CEO Jennifer Wong said during the presentation.

In the throes of the pandemic, the 38-year-old retailer crossed the $1 billion sales threshold for the first time. The company attributed the growth to a lack of competition in the type of clothing it provides — which it describes as “everyday luxury” — strong brand loyalty from customers and the overall surge in e-commerce during the pandemic.

Now it’s taking that growth and betting it can accelerate it south of the border. The retailer said it will add eight to 10 stores per year in the U.S. to bring its total number of boutiques stateside to 150 by 2027, while expanding three to five existing boutiques annually.

In its latest quarter, the company topped analyst expectations by reporting net revenue of $525.5 million, a 50-per-cent increase from the same period a year earlier. That prompted CIBC Capital Markets analyst Mark Petrie to raise his price target from $59 to $60 earlier this month.

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“Concerns about a slowdown in consumer spending, elevated inventories and a return to discounting across the industry have weighed on apparel stocks, but ATZ has showcased — once again — brand momentum is accelerating, particularly in the U.S.,” Petrie said in an Oct. 12 note to clients.

Aritzia also said Thursday that it expects e-commerce to make up 45 per cent of the company’s total net revenue by the end of the five-year plan. Online sales made up 35 per cent of revenue in the second quarter. The company said it plans to grow e-commerce by “connecting clients to tailored product discovery, creative innovation, and intuitive experiences,” but did not elaborate on details in its press release.

It said it will also create an app for customers and use strategic marketing to amplify its brand on social media.

Aritzia shares closed down four per cent at $51.72 in Toronto on Thursday but have approximately doubled since the onset of the pandemic.

• Email: bbharti@postmedia.com | Twitter: biancabharti

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