After market close today, Aritzia (TSE:ATZ) (OTC:ATZAF) reported its Fiscal Q3-2023 financial results, and both revenue and earnings beat analysts’ estimates. The company also shared its Fiscal 2023 outlook.
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Aritzia’s revenue reached C$624.6 million compared to the consensus estimate of about C$585.5 million, growing by 37.8% year-over-year. Also, its adjusted earnings per share (EPS) were C$0.67, up 9.8% year-over-year, while analysts were expecting a figure of C$0.65. unadjusted diluted EPS came in a bit lower, at C$0.61.
Additionally, adjusted EBITDA reached C$119.6 million, growing by 9.5%, and the company’s U.S. expansion is still going strong, as its U.S. revenue grew by 57.8% year-over-year. However, this is lower than Fiscal Q2-2023’s growth rate of approximately 80%.
Additionally, while ATZ beat expectations, the company saw lower profit margins compared to last year, evidenced by its net income and EBITDA growing at a much slower rate than its revenue. Even its gross profit margin fell from 46.4% to 43.3%.
Nonetheless, Aritzia now has C$131.9 million in cash and cash equivalents on its balance sheet compared to C$65.4 million in Fiscal Q2 2023.
Aritzia’s Financial Outlook
Aritzia stated that it’s still experiencing strong demand in the current quarter (fiscal Q4). As a result, it anticipates revenue to come in between C$580 million and C$600 million in Q4, implying a 33% increase at the midpoint. For the full year, revenue is expected to be between C$2.14 billion and C$2.16 billion, ~44% higher year-over-year.
Its gross profit margin for the year is expected to decline by 200 to 225 basis points.
Is Aritzia Stock a Buy, According to Analysts?
According to analysts, Aritzia earns a Strong Buy consensus rating based on five Buys, one Hold, and zero Sells assigned in the past three months. The average Aritzia price target of C$62.34 implies 21.7% upside potential.
