Canada's Aritzia projects up to 24% Q3 growth, eyes $3.35 bn in FY26

For the full FY26, the company projects net revenue between $3.3 billion and $3.35 billion, up 21–22 per cent from FY25, propelled by continued expansion in the United States, digital growth, and growing brand awareness. Aritzia plans to open 13 new boutiques and reposition four existing ones, with 12 of the new stores located in the US and the remainder in Canada. Adjusted EBITDA margin is expected to improve to 15.5–16.5 per cent, supported by higher merchandise margins, freight cost efficiencies, and its smart spending initiative. However, the company warned that higher US tariffs could partially offset these gains.

For FY27, Aritzia revised its adjusted EBITDA margin forecast to the high teens, down slightly from the previous outlook of around 19 per cent, due to expected tariff pressures and the elimination of the de minimis exemption, Aritzia said in a press release.

Meanwhile, Aritzia delivered a stellar performance, achieving net revenue of $812.1 million in the second quarter (Q2) of FY26 ended August 31, 2025, witnessing an increase of 31.9 per cent year-over-year (YoY). Comparable sales rose 21.6 per cent, with double-digit growth across all channels and geographies.

The United States remained the key growth driver, with net revenue soaring 40.7 per cent to $486.1 million, accounting for nearly 60 per cent of total revenue. This momentum was fuelled by new boutique openings, strong e-commerce demand, and heightened brand visibility. In Canada, net revenue increased 20.6 per cent to $326 million, reflecting robust performance supported by strategic marketing investments.

Channel-wise, retail net revenue surged 34.3 per cent to $571.7 million, driven by high-teens comparable sales growth in existing boutiques and strong returns from newly opened and repositioned locations. Aritzia opened 13 new boutiques and repositioned four in the past year, bringing its total count to 134 stores. E-commerce net revenue grew 26.5 per cent to $240.3 million, comprising nearly 30 per cent of total revenue. The company attributed the growth to strong traffic and effective digital marketing investments.

The gross profit climbed 43.7 per cent to $355.6 million, while gross profit margin improved 360 basis points to 43.8 per cent, aided by improved initial margins, lower warehousing costs, and expense optimisation under the company’s ‘smart spending’ initiative.

SG&A expenses rose 25.4 per cent to $250.2 million, but as a percentage of net revenue, they fell to 30.8 per cent from 32.4 per cent, showing enhanced operating leverage.

The net income skyrocketed 263 per cent to $66.3 million, translating to $0.56 per diluted share, compared to $0.16 per share in the previous year. Adjusted net income rose 185 per cent to $69.8 million, or $0.59 per share, while adjusted EBITDA more than doubled to $122.7 million (15.1 per cent of revenue).

Capital expenditures reached $59.6 million, primarily directed toward boutique openings, repositionings, and the ongoing construction of a new distribution centre in British Columbia. For the full fiscal, Aritzia plans approximately $200 million in capital investments, split between boutique development and logistics/technology upgrades.

For the first half (H1) of FY26, Aritzia reported $1.48 billion in revenue, up 32.4 per cent YoY, with US revenue surging 42.7 per cent to $899.1 million. The gross profit margin expanded 340 basis points to 45.3 per cent, and adjusted EBITDA doubled to $218.1 million. Net income for the period rose 219 per cent to $108.7 million, while adjusted net income grew 141 per cent to $119.2 million.

“Our performance was fuelled by robust demand for our high-quality beautiful products, including an outstanding response to our Fall launch, as well as our strong inventory position, strategic marketing investments and new boutique openings. Exceptional strength in the United States continued to drive our results, as net revenue increased 41 per cent, underscoring the growing awareness of the Aritzia brand and affinity for Everyday Luxury,” said Jennifer Wong, chief executive officer (CEO) at Aritzia. “In addition, we generated meaningful gross profit margin expansion and SG&A leverage, resulting in growth in adjusted net income per diluted share of over 180 per cent.”

ALCHEMPro News Desk (SG)