VANCOUVER — The Omicron variant has failed to slow down Aritzia Inc. as the clothing retailer's performance continues to thrive after seeing its profits more than double in its latest quarter.
The Vancouver-based company handily beat expectations by earning $64.9 million for the three months ended Nov. 28, with all stores being open for the first time since the start of the pandemic.
That compared with $30.5 million in net earnings in the prior year.
"Our retail business flourished, as comparable sales in our boutiques grew 58 per cent from fiscal 2021, whilst continuing to exceed pre-pandemic levels with retail comps growing 26 per cent from fiscal 2020," founder, CEO and chairman Brian Hill said in a news release Wednesday after markets closed.
Adjusted profits were $71.2 million or 61 cents per share, up from $32.2 million or 29 cents per share a year earlier.
Revenues rose 63 per cent to $453.3 million from $278.3 million as retail revenues increased 72 per cent while e-commerce sales rose 47 per cent from the third quarter of 2021.
Sales growth in the United States increased 115 per cent to $148 million and represented 44 per cent of total revenue in the quarter.
The company supported elevated demand by increasing inventories by 28 per cent during the quarter.
Aritzia was expected to report 40 cents per share in adjusted profits on $368 million in revenues, according to financial data firm Refinitiv.
"Our strong performance has continued in the fourth quarter to date, despite the recent resurgence of COVID-19, associated supply chain and labour headwinds," Hill added.
Despite revenue pressure since the beginning of January, the company expects net revenues will increase 40 to 50 per cent to reach between $375 million and $400 million during the fourth quarter based on "robust client demand" through the holiday selling season.
Aritzia increased its revenue outlook for the year and now expects sales of between $1.425 billion and $1.45 billion, implying a growth of 65 to 70 per cent from fiscal 2021. It previously forecast annual revenues of $1.25 billion to $1.3 billion.
Irene Nattel of RBC Capital Markets says the company's reinstatement of its share purchase program is a sign of its strong performance. Aritzia plans to repurchase up to 3.7 million shares or five per cent of outstanding shares.
"Performance of Aritzia prior to, during and through yet another wave of COVID reinforces our views around the strength, sustainability and upside potential of the company’s unique business model," she wrote in a report.
Founded in 1984, the company operates 105 stores in Canada and the United States.
This report by The Canadian Press was first published Jan. 12, 2022.
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— By Ross Marowits in Toronto.
The Canadian Press