Aritzia Q1 profit drops despite sales increasing
Canadian fashion retailer Aritzia announced on Tuesday a 13.4% increase in net revenue, coinciding with a net income drop.
The Vancouver-based company said net revenues for the first quarter ended May 28, 2023, jumped to $462.7 million, with comparable sales growth of 4.1% compared to Q1 2023.
By region, United States net revenue increased by 21.8% to $251.9 million, and net revenue in Canada increased by 4.8% to $210.8 million. Overall, retail net revenue increased 13.8% from Q1 2023 to $327.6 million, while e-commerce net revenue increased 12.5% from Q1 2023 to $135.1 million.
Still, net income decreased 47.5%, reaching $17.5 million, compared to $33.3 million in Q1 2023. Net income per diluted share was $0.15 per share, a decrease of 48.3% compared to $0.29 per share in Q1 2023.
“While we are seeing a more challenging consumer environment to start the second quarter and have identified opportunities in the level of newness in our product assortment, we remain disciplined in making further progress against our Fiscal 2024 priorities,” said Jennifer Wong, chief executive officer.
Aritzia also said it saw a deceleration in traffic beginning in June, likely reflecting macroeconomic pressures on consumers amid higher interest rates.
Looking ahead, the company expects net revenue in the second quarter of fiscal 2024 to be flat to slightly down compared to the second quarter of fiscal 2023.
For the full fiscal year, net revenue is expected to be in the range of $2.25 billion to $2.35 billion, representing an increase of approximately 2% to 7% from Fiscal 2023.
