Dive Brief:
- As part of a five-year strategic plan, Aritzia plans to open between 12 and 14 new stores annually in the U.S. By fiscal 2032, the Canada-based fashion retailer aims to increase net revenue to between 9.5 billion Canadian dollars ($6.8 billion at press time) and 10.5 billion Canadian dollars, with 21% adjusted EBITDA and a 15% to 17% compound annual growth rate.
- During a Tuesday investors day call, the company also said it would reposition five to seven existing boutiques annually and expand its product offerings. Executive Chair Brian Hill said Aritzia will launch a new iteration of its denim line in 2027, and would eventually add handbags, shoes, jewelry, beauty and warm-weather accessories.
- The ambitious revenue targets amount to more than double Aritzia’s reported fiscal 2026 net revenue of CA$3.7 billion. That growth represented a 35% year-on-year increase and a 25% CAGR over four years, which the company in May said led it to reach its fiscal 2027 net revenue target of CA$3.5 billion to CA$3.8 billion one year early.
Dive Insight:
With approximately 145 stores in North America and digital revenue of about CA$1.3 billion in fiscal 2026 that contributed just over a third of the company’s net revenue, Aritzia isn’t exactly a newcomer to the fashion stage. However, CEO Jennifer Wong told investors and analysts on Tuesday that the company’s goal was about more than increasing its bottom line.
“The next years [are] about doubling down,” she said. “Doubling down on what has driven our success and keeping the flywheel turning. The opportunity ahead is significant, and the U.S. remains our primary growth market through fiscal 2032. Our long-term goal goes further, to become world famous.”
Aritzia wants to take over more of its customers’ closet space, and said in Tuesday’s release that by 2023, product expansion categories “are expected to contribute approximately $1.5 billion in incremental net revenue.”
As it grows its store count, the company hopes to have 220 locations by 2032. One of those is likely to be Fred Segal’s Los Angeles flagship, which Aritzia leased when it acquired the brand in February. And while most of Aritzia’s expansion will happen in the U.S., Karen Janes, executive vice president of real estate, said on the call that by the end of fiscal year 2027, the company hopes to enter into 19 new markets and grow its square footage by approximately 70%, including expansion outside North America.
Meanwhile, Aritzia said it also plans to double its client base and grow its digital channel to between about CA$4.1 billion and CA$4.5 billion over the next five years, representing a CAGR of about 20%. The growth will be partly led by the introduction of a loyalty program that will stretch across all its channels, per the release.
Aritzia “makes large, thoughtful investments in back-end processes and systems to support a larger business, while leaving room to adapt and make mistakes,” William Blair analysts led by Dylan Carden said in a note. However, Carden and his colleagues said that was only part of the company’s success equation.
“Another thing at risk of being missed here is that larger scale is, in our view, available to the company, having essentially invented a new category, everyday luxury,” Carden said. “This is to say accessible, or even a value offering in terms not of price point, but access to quality materials and production at materially lower price points than other brands that use similar materials and techniques. Companies that invent categories tend to be larger, with sustainable growth beyond the more traditional trend cycle.”
Carden added that Aritzia might even be low-balling its own outlook.
“Between the track record, the tangible underpinnings of growth, and a category that the company largely has to itself, we believe not only in the feasibility of the five-year plan, but that it will likely again prove relatively conservative,” he said.
