Women’s apparel retailer Aritzia posted its first earnings report, for the second quarter, since becoming a public company last month.
For the three months ended Aug. 28, the Vancouver-based firm said it posted a net loss of 67.3 million Canadian dollars, or $50.8 million, equal to 65 Canadian cents, or 49 cents, a diluted share. This compares with net income of 4.7 million Canadian dollars, or $3.5 million, and 5 Canadian cents, or 4 cents, in earnings per share a year ago. On an adjusted basis, which excludes stock-based compensation expenses in the quarter in connection with the initial public offering, net income was up 42.5 percent to 9.3 million Canadian dollars, or $7 million, from 6.5 million Canadian dollars, or $4.9 million, a year ago. All conversions are at current exchange.
Net revenue rose 30.1 percent to 157.9 million, or $119.3 million, from 121.4 million, or $91.7 million, a year ago. The company said that comparable-store sales rose 16.9 percent on top of the 20.8 percent comp growth a year ago.
For the six months, the net loss was 59.5 million Canadian dollars, or $45 million, equal to 58 Canadian cents, or 44 cents, a diluted share, on a 29.4 percent increase in net revenues to 284.3 million Canadian dollars, or $214.7 million.
Brian Hill, Aritzia’s founder, chairman and chief executive officer, said, “We are pleased to have delivered our eighth consecutive quarter of strong positive comparable sales growth, which demonstrates the strength of our exclusive multibrand strategy in both our retail stores and e-commerce business.”
Hill added that the company remains focused on “long-term growth of the business as we maintain our commitment to deliver beautifully designed product, an aspirational shopping experience and exceptional customer service, all driven by operational excellence.”
The company said the increase in net revenues was driven in part by growth in comps and its e-commerce business, as well as sales from eight new store openings and four expanded stores since the year-ago second quarter. It also said that gross profit rose by 36.3 percent, or 35.9 percent of net revenue compared with 34.3 percent of net revenue a year ago. That increase was due mostly to lower product costs in addition to leverage on store occupancy costs, the company said.
The improvement in gross profit margin was partially offset by one-time costs associated with the transition of the firm’s Toronto area distribution center from a replenishment focus to a full-service facility, as well as the use of a higher cost-shipping provider during the period, which was threatened by a potential Canada Post strike.
Jennifer Wong, president and chief operating officer, said, “Our fall season has started off well as customers continue to respond favorably to our product offering. Our new stores are meeting expectations and we look forward to opening three to four new stores and expanding or repositioning three existing stores in the next six months.”
Wong added that the company has plans to begin shipping internationally, which would broaden the firm’s e-commerce reach by more than 220 countries.
The company raised 400 million Canadian dollars, or $302 million, in its public offering on Sept. 26, which represented the largest deal so far for the Canadian IPO market.
Hill started the women’s apparel brand in 1984 and the company counted Boston-based private equity firm Berkshire Partners as a majority investor since 2005. Hill and Berkshire still hold 97 percent voting control of the company, based on the dual-class structure of the shares. The company trades on the Toronto Stock Exchange under the trading symbol “ATZ.”
Shares of Aritzia were trading up 4.1 percent to 19.20 Canadian dollars, or $14.50, in morning trading on the Toronto exchange.