We first highlighted GRGD this past August in our podcast (link to the episode here).
GRGD is a Canadian fasahion retailer with two main banners: Dynamite (youth) and Garage (young professionals). It went public in November 2024, and its performance was fairly weak to start (IPOd right around the market top and into the US tariff meltdown). But since then, sales and earnings growth have been accelerating, guidance is being raised, and margin growth has been exceptional. It mostly serves Gen Z and Millennials. It is expanding internationally, and it has integrated e-commerce and physical retail, with a strong presence across the US and Canada. Forward earnings growth is expected to be in the 15% to 30% range, but it does trade at a high valuation of 34X forward earnings. We think sales growth is due to a combination of factors such as: the right generational mix (rapid growth in the millennial and Gen Z cohorts), integration with e-commerce, and store expansion. We think it is more comparable to ATZ.
We continue to like GRGD here, momentum continues to rise, and slight consolidation periods can happen, but overall we would be OK buying some here today.