Aritzia Reports First Quarter Fiscal 2026 Financial Results

VANCOUVER, BC, July 10, 2025 /PRNewswire/ - 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 first quarter ended June 1, 2025 ("Q1 2026").

"We achieved net revenue of $663 million in the first quarter of Fiscal 2026, a 33% increase compared to last year. Comparable sales grew 19%, fueled by double-digit growth in all channels and all geographies. Our results were driven by the strong performance of our Spring/Summer product, which resonated exceptionally well with our clients, as well as our optimized inventory position, strategic marketing investments and our new and repositioned boutique openings. Growth was consistent across channels, with net revenue increasing 34% in retail and 30% in eCommerce, underscoring the broad strength of our multi-channel business. Our performance in the United States, where net revenue increased a tremendous 45%, continued to fuel our results," said Jennifer Wong, Chief Executive Officer. "In addition, we generated meaningful gross profit margin expansion and SG&A leverage, resulting in outstanding adjusted EPS growth of over 90%."

Ms. Wong continued, "Trends across the business remain strong, and we are pleased with the start to our second quarter. We continue to navigate macro developments from a position of financial and operational strength, as we adapt to the environment around us and execute across our key strategic growth levers - geographic expansion, digital growth and increased brand awareness. The strength of the Aritzia brand has never been greater, and yet we still have a long runway for growth in the United States. This gives me great confidence in our ability to execute and capitalize on all of the opportunities that lie ahead."

First Quarter Highlights

For Q1 2026, compared to Q1 20251:

Net revenue increased 33.0% to $663.3 million, with comparable sales2 growth of 19.3%

United States net revenue increased 45.1% to $413.0 million, comprising 62.3% of net revenue

Retail net revenue increased 34.2% to $480.3 million

eCommerce net revenue increased 30.0% to $183.0 million, comprising 27.6% of net revenue

Gross profit margin2 increased 320 bps to 47.2% from 44.0%

Selling, general and administrative expenses as a percentage of net revenue decreased 190 bps to 33.5% from 35.4%

Adjusted EBITDA2 increased 76.9% to $95.3 million. Adjusted EBITDA2 as a percentage of net revenue increased 360 bps to 14.4% from 10.8%

Net income increased 167.7% to $42.4 million, or 6.4% from 3.2% as a percentage of net revenue. Net income per diluted share was $0.36 per share, compared to $0.14 per share in Q1 2025

Adjusted Net Income2 increased 97.4% to $49.3 million. Adjusted Net Income per Diluted Share2 was $0.42 per share, compared to $0.22 per share in Q1 2025

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1 All references in this press release to "Q1 2026" are to our 13-week period ended June 1, 2025, to "Q1 2025" are to our 13-week period ended June 2, 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 financial measures (as defined herein) or supplementary financial measures. See "Comparable Sales, "Non-IFRS Financial Measures and Retail Industry Metrics" and "Selected Financial Information".

First Quarter Results Compared to Q1 2025

(unaudited, in thousands of Canadian dollars, unless otherwise noted)

Q1 2026

Q1 2025

Change

% of net revenue

% of net revenue

%

bps

Retail net revenue

$        480,306

72.4 %

$        357,843

71.8 %

34.2 %

eCommerce net revenue

183,010

27.6 %

140,787

28.2 %

30.0 %

Net revenue

$        663,316

100.0 %

$        498,630

100.0 %

33.0 %

Gross profit

$        312,797

47.2 %

$        219,544

44.0 %

42.5 %

320

Selling, general and administrative ("SG&A")

$        222,483

33.5 %

$        176,290

35.4 %

26.2 %

(190)

Net income

$          42,391

6.4 %

$          15,833

3.2 %

167.7 %

320

Net income per diluted share

$               0.36

$               0.14

157.1 %

Adjusted EBITDA2

$          95,334

14.4 %

$          53,877

10.8 %

76.9 %

360

Adjusted Net Income2

$          49,330

7.4 %

$          24,988

5.0 %

97.4 %

240

Adjusted Net Income per Diluted Share2

$               0.42

$               0.22

90.9 %

Net revenue increased 33.0% to $663.3 million, compared to $498.6 million in Q1 2025, or increased 30.5% on a constant currency2 basis, driven by strong comparable sales growth and the Company's new and repositioned boutiques. Comparable sales2 grew 19.3%, as all channels and all geographies generated positive double-digit growth, driven by a strong client response to the Company's Spring and Summer products, the Company's optimized inventory position and its strategic marketing investments.

In the United States, net revenue increased 45.1% to $413.0 million, compared to $284.7 million in Q1 2025. This was fueled by the Company's real estate expansion strategy, strong comparable sales growth in the Company's existing boutiques and continued strong momentum in eCommerce. Net revenue in Canada increased 17.0% to $250.3 million, compared to $214.0 million in Q1 2025, driven by accelerated comparable sales growth in both eCommerce and retail.

Retail net revenue increased 34.2% to $480.3 million, compared to $357.8 million in Q1 2025. The net revenue increase was driven by the strong performance of the Company's new and repositioned boutiques, as well as mid-teens comparable sales growth in existing boutiques in both countries. In the last 12 months, the Company opened 13 new boutiques and repositioned three boutiques. Boutique count3 at the end of Q1 2026 totaled 131 compared to 119 boutiques at the end of Q1 2025.

eCommerce net revenue increased 30.0% to $183.0 million, compared to $140.8 million in Q1 2025. The continued momentum in the Company's eCommerce business was fueled by strong traffic growth from the positive response to Spring and Summer products and strategic investments in digital marketing.

Gross profit increased 42.5% to $312.8 million, compared to $219.5 million in Q1 2025. Gross profit margin2  was 47.2%, compared to 44.0% in Q1 2025. The 320 bps increase in gross profit margin was primarily driven by leverage on store occupancy costs, lower warehousing costs and savings from the Company's smart spending initiative.

SG&A expenses increased 26.2% to $222.5 million, compared to $176.3 million in Q1 2025. SG&A expenses were 33.5% of net revenue, compared to 35.4% in Q1 2025. The 190 bps improvement was primarily driven by expense leverage.

Other expense was $8.3 million, compared to $0.04 million in Q1 2025. The increase in other expense is primarily due to the weakening of the U.S. dollar, which resulted in unrealized losses from the translation of an intercompany loan from USD to CAD ($10.3 million loss compared to $1.2 million gain in Q1 2025). The intercompany loan balance was USD$165.2 million, compared to USD$163.9 million at the end of Q4 2025.

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3 There were three Reigning Champ boutiques as at June 1, 2025  (four Reigning Champ boutiques as at June 2, 2024), which are excluded from the boutique count. There was one Aritzia boutique closure in Fiscal 2025.

Net income was $42.4 million, an increase of 167.7% compared to $15.8 million in Q1 2025, primarily attributable to the factors described above. Net income per diluted share was $0.36 per share, an increase of 157.1% compared to $0.14 per share in Q1 2025.

Adjusted EBITDA2 was $95.3 million or 14.4% of net revenue, an increase of 76.9% compared to $53.9 million or 10.8% of net revenue in Q1 2025. Excluding $10.3 million of unrealized foreign exchange translation losses ($1.2 million gain in Q1 2025) on an intercompany loan, Adjusted EBITDA2 increased by 100.6% to $105.6 million or 16.0% of net revenue, compared to $52.7 million or 10.6% of net revenue in Q1 2025.

Adjusted Net Income2 was $49.3 million, an increase of 97.4% compared to $25.0 million in Q1 2025. Adjusted Net Income per Diluted Share2 was $0.42 per share, an increase of 90.9% compared to $0.22 per share in Q1 2025.

Cash and cash equivalents totaled $292.6 million, compared to $100.7 million at the end of Q1 2025.

Inventory was $409.5 million, an increase of 3.2%, compared to $396.8 million at the end of Q1 2025.

Capital cash expenditures (net of proceeds from lease incentives)2 were $52.3 million, compared to $55.6 million in Q1 2025. Capital cash expenditures in Q1 2026 primarily consists of capital investments in new and repositioned boutiques and the Company's new distribution centre in British Columbia.

Outlook

Aritzia expects the following for the second quarter of Fiscal 2026:

Based on quarter-to-date trends, Aritzia expects net revenue in the range of $730 million to $750 million, representing growth of approximately 19% to 22%. The Company expects gross profit margin to increase approximately 100 bps and SG&A as a percentage of net revenue to decrease approximately 100 bps for the second quarter of Fiscal 2026 compared to the second quarter of Fiscal 2025.

While the Company's momentum across channels and geographies remains strong year to date, the outlook for Fiscal 2026 accommodates for a range of scenarios given uncertainties related to the broader macroeconomic environment, including tariffs.

Aritzia expects the following for Fiscal 2026:

Net revenue in the range of $3.10 billion to $3.25 billion4, representing growth of approximately 13% to 19% from Fiscal 2025. This includes the contribution from retail expansion with a minimum of 12 new boutiques and five boutique repositions. Eleven new boutiques5 and two repositions are expected to be in the United States with the remainder in Canada.

Adjusted EBITDA as a percentage of net revenue to be approximately 15.5% to 16.5%6 compared to 14.8% in Fiscal 2025, driven by IMU improvements, freight tailwinds, savings from the Company's smart spending initiative and expense leverage, offset by higher US tariffs.

Capital cash expenditures (net of proceeds from lease incentives)2 of approximately $180 million. This includes approximately $110 million related to investments in new and repositioned boutiques expected to open in Fiscal 2026 and Fiscal 2027. It also includes approximately $70 million related to the Company's distribution centre network, including its new facility in the Vancouver area, and technology investments.

Depreciation and amortization of approximately $110 million.

Foreign exchange rate assumption for Fiscal 2026 USD:CAD = 1.37.

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4 Compared to Company's previous outlook for net revenue of $3.05 billion to $3.25 billion, representing growth of approximately 11% to 19%

5 Compared to Company's previous outlook of ten new boutiques and two repositions expected in the United States and the remainder in Canada

6 Compared to Company's previous outlook of Adjusted EBITDA as a percentage of net revenue of approximately 14% to 15%

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 first quarter of Fiscal 2026 dated July 10, 2025 (the "Q1 2026 MD&A") and the Company's annual information form for Fiscal 2025 dated May 1, 2025 (the "Fiscal 2025 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". See also the Company's press release dated May 1, 2025, "Aritzia Reports Fourth Quarter and Fiscal 2025 Financial Results" for updates to ...