Aritzia raises revenue forecast to C$4.78–4.88 billion on U.S. strength
Key Facts
Aritzia raised its fiscal 2027 revenue forecast to between C$4.78 billion and C$4.88 billion, according to its second-quarter earnings statement, as U.S. and digital sales expanded. The new range represents annual growth of between 29% and 32%, the expected pace of revenue gains from the previous year. The update came after the company posted quarterly revenue of C$1.17 billion, exceeding the upper end of its guidance for the quarter. When it reported first-quarter results, Aritzia had forecast second-quarter revenue of between C$1.100 billion and C$1.125 billion. The beat was accompanied by growth in comparable sales, which rose 34.5% in the second quarter, according to the company's statement.
The United States stood out in the quarterly results, with revenue rising 60.3% from the same period a year earlier, according to Aritzia. The U.S. market accounted for 66.6% of total second-quarter revenue, giving it the largest share of the company's sales during the period. Across sales channels, digital revenue rose 67.7% year on year, alongside growth in the U.S. market. On the earnings call, a transcript of which was published by Benzinga, the chief executive attributed strong demand to the company's summer and fall collections. Management linked the performance of those collections to inventory readiness, among the factors it cited in explaining demand during the period.
Explaining the drivers of digital business, Aritzia's management named its mobile app among the initiatives that contributed to growth in the channel during the second quarter. It also listed marketing initiatives across the purchasing journey among the supporting factors, according to its comments on the earnings call carried by Benzinga. Management described these drivers as "our mobile app and our marketing initiatives across the purchasing journey," linking digital channel performance to initiatives the company is implementing. On profitability, management said lower markdowns contributed to an improvement in the adjusted gross margin during the period. This operational improvement came alongside the separate impact of tariff refunds the company recognized in its quarterly results.
Aritzia's reported net income totaled C$201.7 million in the second quarter, according to the earnings statement, benefiting from tariff refunds. The company recognized C$97.4 million in refunds during the period, an item that contributed to reported earnings alongside sales performance. Meanwhile, the adjusted gross margin, which excludes the impact of those refunds, was 48.7%, according to figures released by Aritzia. Adjusted diluted earnings per share were C$1.31 in the second quarter, among the adjusted profitability measures included in the statement. The results thus reflected both the benefit of the tariff item to reported earnings and an improvement in the adjusted margin that management linked to lower markdowns.
Aritzia had set its previous annual revenue forecast at between C$4.55 billion and C$4.75 billion when it reported first-quarter results, before the latest update. The company raised both the lower and upper ends of that range in its second-quarter announcement, as quarterly revenue exceeded its earlier guidance. The revised annual outlook also covered profitability, with the company now targeting an adjusted earnings before interest, taxes, depreciation and amortization margin of about 20.0% for the current fiscal year. The previous target for that margin was about 19.5%, according to the guidance issued with its first-quarter results. Management confirmed on the earnings call that the outlook excludes any benefit from tariff refunds, despite their contribution to reported quarterly results.
For the third quarter, Aritzia expects revenue growth of between 23% and 27% from the same period a year earlier, according to the earnings statement. These estimates for the coming quarter form part of the updated financial outlook the company issued following its second-quarter performance. On the basis of its forecast, management said: "Our outlook excludes any benefit from tariff refunds," according to Benzinga's earnings call transcript. Aritzia's next announced corporate event is its investor day, which it scheduled in a separate announcement. The company is set to hold the event on October 27, 2026.