What's your take on ATZ quarterly release? I was shocked at the strength in a time where I envisioned weakness in retail with the tariff issues.
Thanks,
Shane.
Keep in mind that the quarter does not really include much actual tariff impact. The next one may. EPS of 83c beat estimates of 72c. Revenue of $895M beat estimates of $846M. EBITDA of $161M was 22% better than estimates. Aritzia could surpass 1Q guidance for 24-28% sales growth (vs. analysts' 21.7%) and its profit margin view, benefiting from recent store openings, including expanded flagship locations, e-commerce gains and strong reception to its fashion offerings. Full-year Ebitda margin guidance of 14-15% includes a tariff impact of around 400 bps, partly offset by higher markups, cost controls and reduced China dependence. Goods sourced from China for fall/winter will constitute about 20% of the total, with spring 2026 declining to around 5%. About 12 new boutiques and five expanded and repositioned stores are planned. Recent data (Bloomberg) indicates 1Q-to-date adjusted observed US sales are tracking well above consensus' 22%, supporting the sales guidance amid robust traffic. Certainly ATZ has some tariff risk, especially from Vietnam, but we think the company will be able to manage the uncertainty.