By
Bloomberg
Published
Jan 11, 2024
Aritzia Inc. reported an unexpected increase in sales for the third quarter as new inventory and higher markdowns drew in customers.
The Vancouver-based retailer’s revenue came in at C$653.5 million ($488m), beating the average analyst estimate of C$621.9 million. Sales rose 4.6% from a year earlier, while analysts expected a decline.
Adjusted earnings came in at C$0.47 per share compared with the average estimate of C$0.41.
“Although the consumer environment remains mixed, we generated sales growth across all of our geographies and channels, as clients responded well to our new styles and outerwear offering,” Chief Executive Officer Jennifer Wong said in a statement after market close Wednesday.
Management also said it expects to introduce new styles for the spring, which could further draw in customers and boost sales. The retailer also expects its inventory issues to improve by then.
Aritzia shares lost almost half their value over 2023 after the hype surrounding the company at the time failed to translate into financial success. Much of the hope for growth rests on its long-term plan to expand in the US.
“The newer stores and expansions are outperforming when they open,” Bloomberg Intelligence Senior Industry Analyst Mary Ross Gilbert said in an interview. “Usually they draw in a new market,” she said, explaining that the new clients from these store additions are aiding revenue and profit.
For the current quarter, the company sees sales of C$670 million to C$690 million, compared with the estimate of C$677.6 million. Gilbert said seasonal contribution from the brand’s famous Super Puff jacket gives it a “strong franchise.”