Aritzia Q3 Earnings Call Highlights

08 Jan 2026, 18:06 by Scott Moore · The Cerbat Gem

Aritzia (TSE:ATZ) delivered record third-quarter fiscal 2026 results, highlighted by its first-ever billion-dollar quarter and accelerating momentum that management said has carried into a “record-breaking” holiday season. Executives attributed the performance to broad-based demand for its “everyday luxury” assortment, strong execution in both retail and e-commerce, and continued growth in the United States.

Record Q3 revenue, broad-based comparable sales gains

Chief Executive Officer Jennifer Wong said the company generated total net revenue of CAD 1.04 billion in the third quarter, exceeding the top end of its prior guidance range. The company said the quarter included stronger-than-expected October and November results, even as it began lapping unusually strong growth from the prior year.

Management reported a 43% year-over-year increase in total net revenue, with comparable sales up 34%. Wong said the gains were broad-based across channels and geographies, led by U.S. e-commerce. She also noted that on a two-year stacked basis, trends “accelerated sequentially throughout the quarter.”

Chief Financial Officer Todd Ingledew said the quarter’s performance was driven by:

Strong response to winter product supported by a “strong inventory position”
Accelerated e-commerce momentum, aided by the mobile app launch
Retail square footage growth in the “high teens”
Increased full-funnel marketing investments that drove traffic growth

U.S. leads growth; boutiques remain a key driver

Aritzia’s U.S. business continued to be the primary growth engine. In Q3, the company reported a 54% increase in U.S. net revenue to $621 million, which management said was supported by nearly 60% traffic growth in U.S. e-commerce and approximately 30% square footage growth in the region. Ingledew said the company added 15 new and repositioned boutiques in the U.S. over the last 12 months and also delivered strong comparable sales gains in existing locations.

In Canada, net revenue rose 29% to CAD 419 million, representing a fourth consecutive quarter of sequential acceleration, driven by e-commerce growth and strong boutique comp performance.

Across the retail channel, net revenue increased 35% to CAD 657 million. Wong said the company opened 13 new and four repositioned boutiques over the past 12 months, including five new boutiques in Q3 (all in the U.S.) and the repositioning of its Flatiron flagship in New York City. Wong emphasized that boutique comp growth was “primarily driven by traffic,” a point she reiterated during Q&A when asked about the mix of traffic versus ticket.

When asked about potentially accelerating store openings, management reiterated its current cadence. Wong said Aritzia sees a long-term opportunity of 180–200, “possibly north of 200,” boutiques in the U.S., compared with 72 today. However, she said the company is targeting “a minimum of 12–14 boutiques” in the current year and next year, plus four to five repositions, and that this pace “probably makes sense for us.” In a later question, management said total square footage growth for fiscal 2027 would be in the low teens.

Digital initiatives: mobile app launch and international site growth

The company highlighted e-commerce net revenue growth of 58% in Q3 to CAD 383 million. Wong and Ingledew linked the performance to brand demand, marketing, operational improvements, and the mobile app launch, which debuted at the end of October.

Wong described the app rollout as exceeding expectations. She said downloads surpassed 1 million early on and later updated the figure during Q&A to 1.4 million downloads. She said the app ranked as the most downloaded app in the App Store on its first day in both Canada and the U.S., and was the number one shopping app in Canada for an extended period. Wong said the company expects it will take “a few quarters” to determine the app’s steady-state contribution, noting that best-in-class peers typically see apps represent roughly 20%–40% of e-commerce sales. She added that Aritzia is “on track to be in that best-in-class category,” though it is too early to quantify.

On planned enhancements, Wong said the company is focused on broad initiatives including digital styling, more content and storytelling, ongoing shopping-journey optimizations, and deeper integration between the app and boutique experiences to support an omnichannel model.

Aritzia also noted continued progress with its international e-commerce website, with sales more than doubling versus Q3 last year. Wong said the international business is just over 1% of current e-commerce revenue, but the company has stated it expects that to triple in two years. She cited early traction in English-speaking markets such as the U.K. and Australia, as well as interest in Central Europe (including Switzerland and Germany) and Asia (including China).

Margins expand despite tariff and de minimis pressure; raised outlook

Ingledew said gross profit rose 44% year over year to CAD 479 million, with gross margin up 30 basis points to 46%. He noted the quarter faced 410 basis points of pressure from tariffs and the elimination of the de minimis exemption, which he said was more than offset by fixed-cost leverage, improved markdowns, and freight tailwinds. In Q&A, he added that about two-thirds of the pressure came from tariffs and about one-third from de minimis changes, and that there were costs in Q3 tied to the removal of de minimis and the shift of U.S. fulfillment.

SG&A was CAD 290 million, leveraging 170 basis points as a percentage of net revenue to 27.9%, which Ingledew attributed to expense leverage and savings from the company’s “smart spending initiative.” Adjusted EBITDA increased 52% to CAD 208 million, with adjusted EBITDA margin up 120 basis points to 20%. Ingledew said the company has delivered margin improvement for seven consecutive quarters.

On the balance sheet, Aritzia ended the quarter with CAD 620 million in cash, no debt, and no draws on its CAD 300 million revolving credit facility. Inventory was CAD 508 million, up 10% year over year, which management said remained well-positioned to meet demand. Ingledew said the company is reviewing its capital allocation strategy with the board and plans to continue opportunistic share repurchases under its NCIB, noting it repurchased 474,000 shares for CAD 41.3 million since May 7 through quarter-end.

For the fourth quarter, management guided net revenue of CAD 1.1 billion to CAD 1.125 billion, representing growth of 23%–26%, driven by double-digit comparable sales growth and boutique openings. Ingledew said the guidance assumes comps in the high teens and that the company was trending slightly ahead at the time of the call. Gross margin is expected to be approximately flat to up 50 basis points year over year, with ongoing fixed-cost leverage and lower markdowns offset by about 400 basis points of pressure from tariffs and de minimis. SG&A as a percentage of revenue is expected to be approximately flat to down 50 basis points due to leverage and smart spending savings, offset by strategic investments in digital and technology.

Given year-to-date performance and the updated Q4 outlook, the company raised its full-year fiscal 2026 net revenue forecast to CAD 3.615 billion to CAD 3.64 billion (32%–33% growth) and increased its adjusted EBITDA margin outlook to 16.5%–17%.

About Aritzia (TSE:ATZ)