Aritzia sees significant profitability expansion in Q2 Fiscal 2027

Canadian apparel brand Aritzia Inc. (Aritzia) reported strong financial results for the second quarter of fiscal 2027 ended August 30, 2026, driven by broad-based demand across retail and digital channels.

Net revenue reached 1.17 billion Canadian dollars (0.823 billion dollars), an increase of 44.1 percent compared to 812.10 million Canadian dollars in the second quarter of fiscal 2026. On a constant currency basis, net revenue rose 42.1 percent. Comparable sales grew 34.5 percent year-over-year (YoY), supported by strong demand for summer and autumn collections, enhanced inventory positioning and ongoing marketing campaigns.

Net income surged 204.2 percent to 201.70 million Canadian dollars, or 1.70 Canadian dollars per diluted share, compared to 66.30 million Canadian dollars, or 0.56 Canadian dollars per diluted share, in the prior-year period. Reported results included a benefit of 97.40 million Canadian dollars from International Emergency Economic Powers Act (IEEPA) tariff refunds received during the 13-week period. Adjusted net income grew 122.1 percent to 156 million Canadian dollars, while adjusted net income per diluted share increased 122 percent to 1.31 Canadian dollars.

Channel and regional expansion drive top line growth

Retail net revenue increased 34.1 percent to 766.90 million Canadian dollars compared to 571.70 million Canadian dollars in the second quarter of fiscal 2026. Over the past 12 months, Aritzia opened 14 new boutiques and repositioned five existing locations, bringing its total boutique count to 146 at the end of the quarter, compared to 134 a year earlier.

Digital net revenue accelerated 67.7 percent to 402.90 million Canadian dollars, up from 240.30 million Canadian dollars in the second quarter of fiscal 2026. The increase was driven by traffic growth following investments in the company’s mobile application and digital marketing platforms.

By geographic area, net revenue in the US jumped 60.3 percent to 779.40 million Canadian dollars, accounting for 66.6 percent of total revenue. In Canada, net revenue increased 19.8 percent to 390.40 million Canadian dollars, representing 33.4 percent of total sales.

Profitability metrics show significant expansion

Gross profit margin as reported reached 57.1 percent, up 1,330 basis points from the prior-year period. Excluding the impact of tariff refunds, adjusted gross profit margin increased 490 basis points to 48.7 percent. Adjusted EBITDA rose 99.7 percent to 246.20 million Canadian dollars, while adjusted EBITDA margin expanded 590 basis points to 21 percent.

“We sustained exceptional momentum in the second quarter, delivering 44% net revenue growth and a 35% increase in comparable sales, as broad-based strength across geographies, channels and product categories continued to demonstrate the wide appeal of our brand,” said Chief Executive Officer Jennifer Wong. “Our strong top line performance, combined with disciplined execution and our profitability initiatives, drove a 590 basis point increase in our adjusted EBITDA margin to a second quarter record of 21%.”

Q3 and full year outlook

For the first six months of fiscal 2027, net revenue increased 43.7 percent to 2.12 billion Canadian dollars, compared to 1.48 billion Canadian dollars in the first half of fiscal 2026. YTD comparable sales grew 34.8 percent. Net income reached 319.00 million Canadian dollars, up 193.4 percent YoY, while adjusted EBITDA rose 90.8 percent to 437.70 million Canadian dollars.

For the third quarter of fiscal 2027, Aritzia expects net revenue between 1.28 billion Canadian dollars and 1.33 billion Canadian dollars, representing growth of approximately 23 percent to 27 percent compared to the third quarter of fiscal 2026. Adjusted gross profit margin is anticipated to increase by 100 to 150 basis points.

For the full fiscal 2027 year, Aritzia projects net revenue in the range of 4.78 billion Canadian dollars to 4.88 billion Canadian dollars, reflecting annual growth of 29 percent to 32 percent, retail footprint expansion including 12 to 13 new boutiques and four to five repositions, with the majority located in the US, adjusted gross profit margin expansion of 225 to 275 basis points and adjusted EBITDA margin of approximately 20 percent, compared to 17.8 percent in fiscal 2026.

Wong added that momentum has continued into the third quarter, noting that further strategic plans will be presented at the company's investor day on October 27, 2026.