Aritzia reports net loss of $6 million in second quarter
Canadian fashion retailer Aritzia announced on Thursday a 1.6% increase in net revenue, coinciding with a net loss.
The Vancouver-based company said net revenues for the second quarter ended August 27, 2023, reached $534.2 million, compared to $525.5 million in the same period of 2023. Sill, comparable sales dropped 4.3%, compared to the 28.3% growth recorded in the second quarter of 2023. Aritzia attributed this decline to factors like product assortment and the overall consumer environment.
By region, in the United States, net revenue surged by 6% to $278.9 million. However, in Canada, the brand’s home turf, net revenue decreased by 2.7%, reaching $255.3 million.
Aritzia’s retail net revenue increased by 3% to $362 million, mainly due to the success of new and repositioned boutiques. In contrast, the e-commerce side of the business saw net revenue drop by 1% to $172.2 million. The brand attributes this decline to lower website traffic, particularly during the spring/summer sale period.
The retailer recorded a 112.9% decrease in net income, which plummeted to $6 million from $46.3 million in Q2 2023. Net loss per diluted share was $0.5 per share, compared to $0.40 per share, last year.
“Aritzia delivered second quarter net revenue of $534 million, an increase of approximately 2% on top of outstanding growth of 50% in the second quarter of fiscal 2023 and 75% in the second quarter of fiscal 2022. As we highlighted last quarter, we believe our top line trend is being impacted by missed opportunities in the level of new styles in our product assortment as well as a mixed consumer environment,” said Jennifer Wong, chief executive officer.
“While our quarterly results do not meet our high standards, our performance was better than anticipated, and we made significant progress in executing against our fiscal 2024 priorities. As planned, we opened our new Toronto area distribution centre at the end of August and meaningfully improved our inventory position.”
Looking ahead, the company expects net revenue in the third quarter of fiscal 2024 to be flat to slightly down compared to the third quarter of fiscal 2023. For the full fiscal year, Aritzia is still forecasting net revenue in the range of $2.25 billion to $2.35 billion, reflecting a 2% to 7% increase from Fiscal 2023.
“Following two years of unprecedented growth that resulted in a 39% three-year net revenue CAGR in Q2 of Fiscal 2024, we’re continuing to position ourselves for the next phase of expected growth and invest in the scalability of our business,” Wong added.
“Entering the third quarter, our new styles for Fall are resonating well with our clients, and we expect our assortment to be in a strong position for Spring/Summer 2024. Our new and expanded boutiques continue to deliver better-than-expected results, which provides us confidence as we enter into a period of rapid square footage expansion, as well as continue to advance our eCommerce 2.0 strategy and re-accelerate our adjusted EBITDA margin.”
