Canadian retailer Aritzia (TSE:ATZ) has reported a 72% year-over-year increase in its quarterly profit as the company’s e-commerce sales accelerate.
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The Vancouver-based company reported Fiscal third-quarter net income of C$74.1 million (US$51.43 million), up 72% from C$43.1 million a year earlier. Management attributed the spike in profit to e-commerce sales that rose 14% year-over-year, as well as lower markdowns and warehouse costs.
Executives added that the company’s efforts to expand into the U.S. are paying off, with revenue attributable to the U.S. increasing 23.6% to C$403.7 million as it opened new store locations in New York City and Chicago.
Sales Dip in Canada
Despite the success achieved in the U.S. and with online sales, Aritzia’s sales in its home market of Canada dipped 0.6% year-over-year in the latest quarter to C$325 million. Aritzia attributed the decline in revenue growth to its annual warehouse sale, which this year was held in the second quarter rather than the third.
Overall, Aritzia reported earnings per share (EPS) of C$0.63, which was up 85% compared to C$0.34 a year earlier. Revenue in fiscal Q3 rose 11.5% year-over-year to C$728.7 million. Looking ahead, management forecast Fiscal fourth-quarter revenue of C$830 million to C$850 million. Aritzia is in the process of launching an enhanced e-commerce site and mobile app.
The stock of Aritzia has risen 97% over the past 12 months.
Is ATZ Stock a Buy?
The stock of Aritzia has a consensus Strong Buy rating among eight Wall Street analysts. That rating is based on seven Buy and one Hold recommendations issued in the last three months. There are no Sell ratings on the stock. The average ATZ price target of $70.17 implies 11.39% upside from current levels.
