Aritzia sales top pre-pandemic levels on strong U.S., e-commerce growth

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Vancouver-based fashion retailer Aritzia Inc. reported second-quarter sales Wednesday that exceeded pre-pandemic levels as in-store shopping rebounded and e-commerce continued its rapid growth.

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Aritzia, which was founded in 1984 as a standalone boutique, posted $350.1 million in net revenue for the three months ending Aug. 29, jumping by roughly 75 per cent since the same reporting period last year.

The surge was led by a bounce-back in boutique store locations, which saw comparable sales grow by 60 per cent year-over-year and 14 per cent over pre-pandemic levels in 2019. Retail revenue came roaring back at $219.6 million, a 95 per cent jump from a year prior. These results came even though roughly 50 per cent of the boutique store locations in Canada were closed.

The company also brought in $130.4 million in e-commerce sales, which was about 49 per cent more than last year.

Aritzia founder and chief executive officer Brian Hill attributed the results to store re-openings and the retailer’s business expansion south of the border, where the active client base grew by more than 50 per cent over the past 12 months, as well as e-commerce sales growth.

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“Looking ahead, expansion in the United States will be a leading driver of our growth,” Hill said in a release. “We are confident that e-commerce will continue to grow even on the back of 89 per cent growth last year. Retail has surpassed our most optimistic expectations and is continuing to trend above pre-pandemic levels, now and for the foreseeable future.”

During a conference call in July, Hill had described seeing a “strong start” to the second quarter of the company’s fiscal 2022. Hill attributed at the time to a boom in U.S. sales as well as a sustained growth in e-commerce sales in Canada, both of which the results bore out.

Heading into the crucial holiday season, retailers across the board are facing a number of challenges, from problems with the global supply chain and tight labour markets at home. On Wednesday’s conference call, Aritzia chief operating officer Jennifer Wong said that the company remains confident in keeping up with product demand and inventory management.

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“Our inventory management measures included early anticipation over the need for more inventory, and continuing to closely monitor our projected inventory requirements on the freight side,” Wong told analysts. “We are strategically increasing our use of expedited freight by three to four times in response to ocean shipping timelines that have doubled compared to a year ago.”

Moving forward, Hill said that the retailer would focus on both online shopping and brick-and-mortar strategies, expanding by six to eight boutique locations in the U.S., as well as expanding on product offerings. In its latest report, the company said it “continues to maintain a healthy inventory position despite global supply chain constraints.”

Aritzia is currently recruiting more than 1,000 additional full-time staff advisors in boutique store locations and 800 seasonal positions in distribution centers, according to Wong. To tackle a holiday season labour crunch, Aritzia is looking to attract around 400 seasonal distribution center workers with a $21 starting wage.

The company is now raising its full-year fiscal outlook to a range of $1.25 billion and $1.3 billion, compared to the previous outlook of $1.15 billion to $1.2 billion.

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