Aritzia sees sales grow 6% in Q4, expects 45% decline in Q1
Vancouver-based fashion retailer Aritzia Inc. has announced a 6.3% increase in fourth-quarter sales thanks to a strong performance from its e-commerce business, but anticipates significant declines in the first quarter due to Covid-19.
For the fourth quarter ended March 1, 2020, the company’s net revenue totaled C$275.4 million, compared to C$259.1 million in the prior-year period. Comparable sales growth was 8.9%, progress driven by strong e-commerce revenues and positive sales across the retailer’s boutiques.
Net revenue also benefited from the addition of five new locations to the company’s store network since Q4 2019.
Quarterly net income was C$21.7 million, up 16.0% from C$18.7 million in the same period in the previous year.
Aritzia’s annual net revenue rose 12.2% to C$980.6 million, up from C$874.3 million in fiscal 2019, while income for the full fiscal year totaled C$90.6 million, increasing 15.1% from C$78.7 million.
“Our financial results for the fourth quarter and full year fiscal 2020 demonstrated the strength of our business model and the affinity for our brand,” commented Aritzia founder, CEO and chairman Brian Hill in a release, before going on to discuss the effects of the Covid-19 pandemic on the company’s operations.
“As we look ahead, we believe we are extremely well-positioned to navigate the evolving consumer landscape with our beautiful, high quality product, deep customer loyalty and our talented team, all underpinned by our best-in-class infrastructure,” he explained.
Despite this optimistic vision of the future, Aritzia’s outlook for the first quarter of fiscal 2021 anticipates net revenues in the range of $105 million to $110 million, reflecting a year-over-year decline of around 45% due to coronavirus-related store closures.
The company’s e-commerce channel has seen an explosive increase of over 150% in sales since its boutiques closed in mid-March, but this growth has not been sufficient to offset revenues lost as a result of the retailer’s inactive brick-and-mortar fleet.
Aritzia has implemented a number of cost-saving measures in order to ensure its continued liquidity during and after the health crisis, delaying capital expenditures related to boutique construction, temporarily reducing the compensation of its senior management by 25%, and minimizing non-essential operating costs.
The company began the phased reopening of its stores on May 7. As of May 31, 30 of the retailer’s 96 boutiques are in operation.
Due to the ongoing uncertainty surrounding the Covid-19 pandemic, Aritzia has withdrawn its financial performance targets for fiscal 2021.
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