Stock price when the opinion was issued
Nice run, but still likes it. Quarterly results very strong. Company's seeing softness on the Canadian side. Very strong growth in the US. Opening new stores; upping marketing spend to facilitate that, and some investors didn't approve so stock pulled back. Long-term growth profile in place. Areas of growth further out include beyond NA and e-commerce.
Very strong brand name with growing footprint in USA. Excellent price to value proposition on the stock markets. Recent meeting with CEO very positive. Share price below pre Covid-19 levels. Expecting 8-10 new stores in the US annually. Earnings projected to grow with expanded margins. EPS growth also projected to rise as more sales roll in. Would recommend to long term shareholders.
Huge growth runway in US. Tough year, but turned things around. Earnings are improving; revenue and sales are starting to accelerate. Not a perfect proxy, but Google Black Friday trends on ATZ are at new highs. About 5% of his global growth fund.
Yes, fashion can be tricky. That's why he likes fashion companies that don't have a signature "look". GPS in the 90's and GOOS have faced this issue. Whereas ATZ has a broad product portfolio; goal is highest quality at best price point.
Following its inventory issues of a couple of years ago, ATZ has staged an impressive turnaround, certainly. EPS of 71c beat estimates of 62c; sales of $728.7M beat estimates of $698M. EBITDA of $136M beat estimates by 15%. Aritzia could meet the high end of 4Q sales guidance of 31% growth (adjusting for the extra week) to C$850 million, driven by three upsized flagship reopenings -- two in New York and one in Chicago -- along with 11 new boutiques opened. It could also achieve a comparable sales increase in the high teens. The flagships are the equivalent of 10 regular stores. Ebitda margin, which expanded 450 bps year to date, is poised to grow another 500 bps in 4Q, on higher initial mark-ons, lower clearance and as the company leverages fixed costs. Bloomberg notes consumer-transaction data indicates 4Q-to-date adjusted observed US sales are tracking well above consensus, supporting guidance for a 25% rise, with one less week this year vs. last. We would be quite fine moving to a full position along with the strong results, guidance and positive momentum.
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He'd loaded up, but trimmed yesterday to bring the position back in line. Still loves the outlook for the stock, one of his major weightings. US expansion going extremely well, lots of runway. Price target in 2-3 years might be $75-85. If $75, don't buy now. If $85, could buy a bit today and average in.
With tariffs, could see the price of clothing go up. As Springsteen sang, textile jobs are not coming back to NA; clothes will still be imported. Impact on the clothing industry remains to be seen. Thinks prices will go higher, but people still need to get dressed. Onshoring will be a multi-year journey.
Correction is probably overdone, will probably bounce.
He doesn't have a great feel for retailers but it screens like something he would own and is doing the right things. It is a great company with great financials. The problem is that they go in and out of favour since fashion is fickle. If owned, stay long.