- Aritzia Inc. (TSX:ATZ) stock jumped 10.89 per cent early Friday after the Canada-based fashion design house reported second quarter results for its fiscal 2024
- Aritzia delivered second quarter net revenue of $534.2 million, an increase of 1.6 per cent
- In the United States, net revenue increased by 6.0 per cent to $278.9 million
- Aritzia Inc. shares were trading at C$24.75 as of 11:40 am ET
Aritzia Inc. (TSX:ATZ) stock jumped 10.89 per cent early Friday after the Canada-based fashion design house reported second quarter results for its fiscal 2024.
“Aritzia delivered second quarter net revenue of $534 million, an increase of approximately 2 per cent on top of outstanding growth of 50 per cent in the second quarter of Fiscal 2023 and 75 per cent in the second quarter of Fiscal 2022. As we highlighted last quarter, we believe our top line trend is being impacted by missed opportunities in the level of new styles in our product assortment as well as a mixed consumer environment,” Aritzia CEO Jennifer Wong said in a news release after markets closed Thursday. “While our quarterly results do not meet our high standards, our performance was better than anticipated, and we made significant progress in executing against our Fiscal 2024 priorities. As planned, we opened our new Toronto area distribution centre at the end of August and meaningfully improved our inventory position.”
The company stated the recent numbers have resulted in a three-year compound annual growth rate (CAGR) of 38.7 per cent. Sales declined of 4.3 per cent compared with an increase of 28.3 per cent in Q2 2023. Aritzia stated in its news release that its second quarter net revenue trend was impacted by the level of new styles in its product assortment as well as a mixed consumer environment.
In the United States, net revenue increased by 6.0 per cent to $278.9 million, compared with $263.2 million in Q2 2023. This represented 52.2 per cent of net revenue in Q2 2024.
Net revenue in Canada decreased by 2.7 per cent to $255.3 million, compared with $262.3 million in Q2 2023.
Meanwhile, gross profit decreased by 15.2 per cent to $186.8 million, compared with $220.3 million in Q2 2023. Gross profit margin was 35.0 per cent, compared to 41.9 per cent in Q2 2023.
Other Aritzia Q2 2024 highlights
- Net revenue increased 1.6 per cent from Q2 2023 to $534.2 million, with a comparable sales decline of 4.3 per cent
- Retail net revenue increased 3.0 per cent from Q2 2023 to $362.0 million
- e-commerce net revenue decreased 1.0 per cent from Q2 2023 to $172.2 million, comprising 32.2 per cent of net revenue in Q2 2024
- Gross profit margin decreased 690 bps to 35.0 per cent from 41.9 per cent in Q2 2023
- Net income (loss) decreased 112.9 per cent from Q2 2023 to $(6.0) million
- Adjusted EBITDA decreased 74.4 per cent from Q2 2023 to $21.2 million
- Net income (loss) per diluted share of $(0.05) per share, compared to $0.40 per share in Q2 2023
- Adjusted net income per diluted share of $0.03 per share, compared to $0.44 per share in Q2 2023
Based on quarter-to-date trends, Aritzia stated it expects net revenue in the third quarter of Fiscal 2024 to be flat to slightly down compared to the third quarter of fiscal 2023 on top of strong growth of 50 per cent in the third quarter last year and 75 per cent in the third quarter of fiscal 2022. The company also expects gross profit margin to decrease by approximately 200 bps and SG&A as a percent of net revenue to increase by approximately 300 bps in the third quarter of fiscal 2024 compared to the third quarter of fiscal 2023.
“Entering the third quarter, our new styles for fall are resonating well with our clients, and we expect our assortment to be in a strong position for spring/summer 2024. Our new and expanded boutiques continue to deliver better-than-expected results, which provides us confidence as we enter into a period of rapid square footage expansion, as well as continue to advance our e-commerce 2.0 strategy and re-accelerate our adjusted EBITDA margin,” Wong said in a statement.
Aritzia is a vertically integrated design house with an innovative global platform, home to an extensive portfolio of exclusive brands available online and at more than 115 boutiques throughout Canada and the United States.
Aritzia Inc. shares were trading at C$24.75, up 10.89 per cent, as of 11:40 am ET.
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