Aritzia (ATZ) AI Stock Analysis

• Market Cap: $5.82B
• Dividend Yield: N/A
• Average Volume (3M): 744.06K
• Price to Earnings (P/E): 42.6
• Beta (1Y): 0.88
• Revenue Growth: 10.36%
• EPS Growth: 41.78%
• Country: CA
• Employees: 8,300
• Sector: Consumer Cyclical
• Sector Strength: 54
• Industry: Apparel - Retail
• EPS (TTM): 1.18
• Shares Outstanding: 94,702,650
• 10 Day Avg. Volume: 600,977
• 30 Day Avg. Volume: 744,058
• PEG Ratio: 1.02
• Price to Book (P/B): N/A
• Price to Sales (P/S): 2.32
• Price to Cash Flow (P/CF): 6.80
• P/FCF Ratio: 10.60
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: C$75.33
• Price Target Upside: 44.45% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 9

Aritzia's strong financial performance and positive earnings call sentiment are significant strengths, driven by robust revenue growth and strategic expansion, particularly in the U.S. market. However, the high P/E ratio indicates a valuation concern, and technical analysis suggests weak momentum and potential bearish trends. Balancing these factors, the stock's overall score reflects a moderate investment opportunity with strengths in growth but caution due to valuation and technical indicators.

Positive Factors

Financial Performance

Q3/F25 results showed a strong beat and established a tremendous base for the company.

Growth Opportunities

Aritzia is well-positioned to capitalize on its significant U.S. growth opportunity, with increased website visits reflecting this potential.

Marketing Strategies

Paid search traffic, which reflects digital investments, has increased dramatically in both Canada and the U.S., indicating effective marketing strategies.

Revenue Growth

Aritzia is transitioning to a period of revenue acceleration and margin expansion, which is expected to drive strong stock price performance.

Negative Factors

Customer Engagement

Customer engagement metrics softened in Canada, with decreases in mobile average pages per visit and visit duration.

Stock Rating

Analyst recommends a BUY rating with a target price of C$13.00.

Aritzia Business Overview & Revenue Model

Company Description

Aritzia Inc., a Canadian fashion retailer, specializes in providing women with exclusive, high-quality apparel and accessories. Established in 1984, Aritzia operates in the retail sector, offering a range of products including clothing, outerwear, and accessories under its proprietary brands such as Wilfred, Babaton, and TNA. The company is known for its sophisticated shopping environments and personalized customer service, catering primarily to fashion-forward women in North America.

How the Company Makes Money

Aritzia makes money primarily through the retail sale of its own branded fashion apparel and accessories. The company's revenue is generated both from its network of physical retail stores and its e-commerce platform, which allows it to reach a wider audience beyond its brick-and-mortar locations. Aritzia's key revenue streams include direct sales to consumers and the strategic placement of its proprietary brands, which allow for higher margins and brand control. Significant factors contributing to its earnings include its focus on premium product quality, an engaging in-store experience, and a strong digital presence that supports online sales growth. The company also invests in marketing and customer loyalty programs to drive repeat purchases and brand loyalty.

Aritzia Financial Statement Overview

Summary

Aritzia is experiencing strong revenue growth and maintaining solid profitability margins. The balance sheet reflects moderate leverage, providing some financial stability but also containing risks due to debt. Cash flow remains a strength, with effective cash generation supporting further business opportunities. Continued focus on profit improvement and debt management will be key areas for sustaining growth.

Income Statement

Aritzia demonstrates strong revenue growth with a significant increase in its TTM revenue compared to the prior year. The gross profit margin is healthy at 41.8%, and the net profit margin is 5.2%. While there is a noticeable improvement in EBIT and EBITDA margins at 9.0% and 16.9% respectively, the net margin indicates room for enhancing profitability further.

Balance Sheet

The company has a moderate debt-to-equity ratio of 0.93, indicating balanced financial leverage. The return on equity is 13.8%, showcasing decent profitability relative to shareholders' equity. The equity ratio stands at 40.1%, suggesting a stable capital structure but potential vulnerability to financial risks due to debt levels.

Cash Flow

Aritzia's cash flow analysis reflects strong operating cash flow relative to net income, with a ratio of 3.00, which highlights effective cash generation. Additionally, the free cash flow to net income ratio is 1.15, indicating robust free cash flow. However, the free cash flow growth is constrained due to higher capital expenditures.

Breakdown
TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Income Statement		Total Revenue
2.52B	2.33B	2.20B	1.49B	857.32M	980.59M
	Gross Profit
1.06B	898.98M	913.99M	654.95M	312.50M	403.42M
	EBIT
227.13M	158.41M	287.15M	236.02M	51.09M	152.27M
	EBITDA
426.58M	331.74M	428.97M	357.43M	159.77M	247.96M
	Net Income Common Stockholders
132.35M	78.78M	187.59M	156.92M	19.23M	90.59M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
3.59M	163.28M	86.51M	265.25M	149.15M	117.75M
	Total Assets
401.12M	1.95B	1.84B	1.42B	1.14B	1.04B
	Total Debt
146.22M	805.89M	772.01M	503.79M	569.69M	585.27M
	Net Debt
142.63M	642.61M	685.50M	238.55M	420.54M	467.52M
	Total Liabilities
288.44M	1.14B	1.15B	893.77M	780.47M	704.65M
	Stockholders Equity
112.68M	807.50M	685.79M	530.81M	360.26M	332.06M
Cash Flow		Free Cash Flow
152.03M	182.16M	-50.67M	271.33M	83.10M	174.29M
	Operating Cash Flow
396.85M	358.82M	74.91M	338.35M	133.95M	222.08M
	Investing Cash Flow
-244.82M	-182.96M	-131.21M	-99.58M	-50.85M	-47.79M
	Financing Cash Flow
-86.50M	-98.67M	-122.54M	-124.09M	-48.91M	-157.40M

Aritzia Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 52.15
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:ATZ, the sentiment is Negative. The current price of 52.15 is below the 20-day moving average (MA) of 53.16, below the 50-day MA of 62.64, and above the 200-day MA of 51.17, indicating a neutral trend. The MACD of -3.30 indicates Negative momentum. The RSI at 33.08 is Neutral, neither overbought nor oversold. The STOCH value of 33.23 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:ATZ.

Aritzia Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DOL	75 Outperform	$42.69B	39.19	142.11%	0.25%	8.24%	17.99%
ATZ	73 Outperform	$5.82B	42.60	15.44%	―	10.36%	41.78%
GIL	68 Neutral	$9.66B	18.87	23.48%	1.86%	4.03%	-16.63%
GOOS	67 Neutral	$1.10B	15.36	15.82%	―	4.64%	41.68%
ROOT	64 Neutral	C$99.91M	32.96	1.62%	―	-2.09%	2551.85%
Sector *	59 Neutral	$12.18B	11.09	-1.08%	3.77%	1.26%	-19.82%
TGO	45 Neutral	C$20.00M	―	-119.27%	―	1.15%	25.39%

Aritzia Corporate Events

Aritzia Completes Secondary Offering of Voting Shares

Aritzia Inc. announced the successful closing of a secondary offering of 1,045,000 subordinate voting shares, resulting in gross proceeds of $72,993,250 for the selling shareholders, led by founder Brian Hill. The company will not receive any proceeds from this offering, which was managed by a syndicate of underwriters. This transaction alters Mr. Hill’s holdings, leaving him with no subordinate voting shares but maintaining a significant equity and voting interest through multiple voting shares.

Aritzia Announces Final Prospectus for Secondary Share Offering

Aritzia Inc. has announced the filing of a final short form prospectus for a secondary offering of subordinate voting shares by its founder and executive chair, Brian Hill, and related entities. The offering involves the distribution of 1,045,000 shares at $69.85 each, totaling gross proceeds of $72,993,250 for the selling shareholders. The closing of this offering is anticipated around February 28, 2025, pending customary closing conditions. This move reflects Aritzia’s strategic financial maneuvers and could impact its market positioning and stakeholder interests.

Aritzia Announces $66 Million Secondary Share Offering

Aritzia announced a $66 million secondary offering of subordinate voting shares, with proceeds going to the selling shareholders, including company founder Brian Hill, who is using the funds for estate planning, investment diversification, and charitable giving. Despite selling shares, Hill remains Aritzia’s largest shareholder with a 17.3% equity interest, and the offering is expected to close by February 28, 2025, with no proceeds going to the company.

Aritzia’s Q3 2025 Results Highlight Strong U.S. Growth and Strategic Expansions

Aritzia reported a strong performance for its third quarter of fiscal 2025, highlighting a 12% increase in net revenue driven by significant growth in eCommerce and strategic real estate expansions, including new flagship stores in SoHo and Michigan Avenue. The company’s net revenue in the United States saw a substantial 24% rise, showcasing the brand’s growing appeal in this market. Aritzia continues to improve its Adjusted EBITDA margin, striving to return to historical levels, while maintaining a robust inventory and positive client response to its Winter collection, contributing to record-breaking holiday sales. Looking ahead, Aritzia is committed to advancing its growth strategies, focusing on eCommerce and expanding its boutique presence, with a strong growth potential identified in the United States.