Fabrice TaylorAritzia Inc.ATZ.TOBUYJul 15, 2019

In a softer consumer environment, he doesn't own any retailers. Has done fantastically well over last couple of years. They'll have to have blowout numbers to support the higher multiple, but you can't count on that. Retail stocks, such as GRGD, may have gotten ahead of themselves and are selling off.

Retail is a hard gig. Quality operator, very nice locations. Sales growth running ~30% for the past couple of years, but that will slow to some extent. Both his wife and his daughter can shop there and come home with something :)  Stock's not expensive. No obvious threats. 

Be mindful of your position size.

Good growth. But quite a bit of risk, given the market they're in. Tariff risk, fashion risk (look what's happened to LULU). Valuation extended. Shares just below 200-day MA, technically something to watch. 62% of revenue comes from the US.

There are just two retail companies that he owns: Aritzia and Group Dynamite. Trends change but these two companies can respond quickly. However he doesn't like retail in general because of its business model.

At ~80 stores, aiming for ~300, more now in US than in Canada. US stores show strong sales. New online app getting fairly strong traction. Not cheap, but growing at a faster rate than its multiple. PEG is below 1, attractive. Numbers can be lumpy, and impacted by health of consumer.

Future for new stores is huge, long runway especially in US. Loves it. Very expensive today at 32x PE. Topline growth expected ~20%. Execution has improved. Strong same-store sales in US, has found the sweet spot. Flagship stores ramp up incredibly quickly. Right people, product, and supply chains.

An amazing fashion retailer, geared to young, professional women. Have handled supply flow well. It trades around 35x forward PE, a little high. Their demographic is still growing. He continues to like it. Shares have come off a bit. US expansion is a major growth driver. They've navigated tariffs well. 

He doesn't buy specialty retail, though ATZ is a great company with fantastic stores. The stock is too expensive now after going up a lot. ATZ executes very well. Variables like inventory can cause problems in this industry.

The company has done a great job in a difficult business, women's fashion. They've attracted many age categories. Are very well run. This business/industry is too unpredictable for him.

Consumer is the casualty in an inflationary world. In general, he's staying away from the consumer unless you have something really special (like this name).

Is one of his largest holdings. Have expanded into only half the US, so it's early innings for them. There's plenty of room to grow. Zara has 2,000 stores worldwide compared to ATZ's 140.

Trimmed, because he had a big weight. Nice expansion in the price. They are still expanding in the U.S. with a long runway. Margins recovered as did supply chains. Are opening flagship stores in place like Fifth Avenue. It has become more expensive, but need flawless execution for shares to continue higher. Execution has been there. They face competition, but ATZ is new to Americans.

In the consumer discretionary space, she's been underweight on concerns of consumer spending. 

Definitely still a strong Canadian brand. Still working through rebranding after a tougher stretch in the US. Focusing more on premium everyday apparel. Vertical integration brings control over design pricing margins, which is a big advantage in retail. Demand is stabilizing. New US stores are performing well. Growth trend remains intact. Improving e-commerce experience.

Recovering financially, margins are improving, inventories are normalizing. Fundamentally strong and solid at 9/10, but value is 1/10. Analysts still rank it Buy and Outperform. She expects a pullback in the short term.

Up 10% today is quite positive, as would crossing the recent high of ~$90. If it has trouble getting through that level, some of today's gain may be pared off.

Remains very highly ranked within Canada on RSI. Continues to go up. In tech, retailers have been picking up as central banks have started to cut interest rates.