Aritzia (ATZ) AI Stock Analysis

• Market Cap: $5.34B
• Dividend Yield: N/A
• Average Volume (3M): 879.67K
• Price to Earnings (P/E): 47.9
• Beta (1Y): 1.15
• Revenue Growth: 10.36%
• EPS Growth: 41.78%
• Country: CA
• Employees: 8,300
• Sector: Consumer Cyclical
• Sector Strength: 59
• Industry: Apparel - Retail
• EPS (TTM): 0.83
• Shares Outstanding: 94,707,500
• 10 Day Avg. Volume: 740,910
• 30 Day Avg. Volume: 879,666
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• 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: $68.39
• Price Target Upside: 21.21% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 10

Aritzia's overall stock score reflects strong financial performance and positive sentiment from the latest earnings call, driven by robust growth and strategic expansion, particularly in the U.S. market. However, the high P/E ratio indicates a valuation concern, and technical analysis suggests potential overbought conditions. 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

Digital Marketing Success

Paid search traffic increased significantly in both Canada and the U.S., reflecting management's digital investments.

Growth Potential

Aritzia is expected to experience healthy top-line growth through its store and channel expansion efforts, along with increasing margins due to mix shifts, scale benefits, lower freight costs, and pricing.

U.S. Expansion

Aritzia's US real estate growth opportunity is robust, helping the company achieve or even exceed long-term targets.

Negative Factors

Canadian Consumer Metrics

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

Canadian Market Conditions

Canada's economic softness causes moderated growth expectations for the Canadian market compared to the US.

Customer Engagement

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

Aritzia Business Overview & Revenue Model

Company Description

Aritzia Inc. is a Canadian fashion retailer known for its exclusive brands and high-quality women's clothing and accessories. The company operates in the retail sector, catering primarily to fashion-forward women through its network of boutiques and an online platform. Aritzia offers a variety of in-house brands, each with its own aesthetic, targeting different segments within the women's fashion market.

How the Company Makes Money

Aritzia makes money primarily through the sale of its branded women's clothing and accessories. The company generates revenue through its network of physical retail stores located in North America, supplemented by its e-commerce platform that extends its reach globally. Key revenue streams include sales from its diverse range of exclusive brands, which are designed in-house and cater to various consumer preferences. Aritzia's strategic retail locations, effective marketing campaigns, and strong brand identity contribute significantly to its earnings. The company's partnerships with suppliers and a focus on customer experience further enhance its revenue-generating capabilities.

Aritzia Financial Statement Overview

Summary

Aritzia's financial performance is characterized by strong revenue growth and improving profitability metrics. The company maintains a healthy balance sheet with a balanced leverage position. While cash flows are strong, careful management is required to sustain growth and manage debt levels effectively. Overall, Aritzia is in a solid financial position with potential for continued growth in the apparel retail market.

Income Statement

Aritzia has demonstrated strong revenue growth with a CAGR of approximately 22% over the past five years. The gross profit margin is robust, improving from 41% to 43% in the latest year. The net profit margin has also significantly improved from 3% to 8%, reflecting enhanced profitability. EBIT and EBITDA margins also show positive trends, indicating strong operational efficiency. However, the rapid growth may present challenges in sustaining these margins as the company scales.

Balance Sheet

The company has a solid equity base with stockholders' equity growing from $332 million to over $1 billion in five years. The debt-to-equity ratio has remained stable around 0.8, indicating a balanced approach to leverage. An increase in total assets also supports a higher equity ratio. However, the substantial increase in total debt over the years could pose a risk if not managed carefully.

Cash Flow

Operating cash flow has improved significantly, supporting the company's expansion and capital expenditure needs. The free cash flow to net income ratio remains healthy, indicating effective cash generation relative to earnings. However, the fluctuation in free cash flow growth rates could signal potential volatility in future cash generation capabilities.

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

Aritzia Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 56.42
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:ATZ, the sentiment is Positive. The current price of 56.42 is above the 20-day moving average (MA) of 44.91, above the 50-day MA of 51.98, and above the 200-day MA of 51.66, indicating a bullish trend. The MACD of 0.06 indicates Negative momentum. The RSI at 67.77 is Neutral, neither overbought nor oversold. The STOCH value of 90.33 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:ATZ.

Aritzia Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DOL	76 Outperform	$47.08B	40.69	152.86%	0.22%	9.30%	16.85%
ATZ	75 Outperform	$5.34B	47.86	15.44%	―	10.36%	41.78%
GIL	75 Outperform	$9.94B	18.22	24.40%	1.77%	6.30%	-10.10%
GOOS	67 Neutral	$1.11B	15.30	15.82%	―	4.64%	41.68%
Sector *	61 Neutral	$6.65B	11.64	3.00%	3.98%	2.61%	-21.41%
ROOT	59 Neutral	C$116.09M	30.45	-19.09%	―	0.10%	-1665.60%
TGO	49 Neutral	C$24.84M	―	-119.27%	―	0.50%	0.06%

Aritzia Corporate Events

Aritzia Achieves Robust Growth in Q4 and Fiscal 2025

Aritzia reported strong financial results for the fourth quarter and fiscal year 2025, with a notable net revenue growth of 38% in Q4 and a 26% increase in comparable sales. The company’s success was largely driven by its performance in the U.S., where net revenue surged by 56%. Aritzia’s strategic investments in eCommerce, real estate expansion, and marketing have bolstered its market position, and the company remains confident in navigating future economic conditions with a robust balance sheet.

Spark’s Take on TSE:ATZ Stock

According to Spark, TipRanks’ AI Analyst, TSE:ATZ is a Outperform.

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.

To see Spark’s full report on TSE:ATZ stock, click here.

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.