Aritzia Inc. (ATZ.TO)

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.

Has been great long-term. Likes that the payback from new store openings has been very high. They don't open that many stores as peers, but still significant. It's a retailer though, and things can change long term. Yes, discretionary spending is the first to go in an economic downturn, but just as important is the Coolness Factor. Is this cool? Look at same-store sales growth and their marketing strategy. ATZ is doing the right things. A solid hold for now.

He wouldn't buy now because it has shot up so much. It was their largest holding but they have taken some profits recently. It is not priced in to their growth margin. It has a history of volatility so if it drops by 1/4 to 1/3 you could consider taking a position. You should be aware of the effects of tariffs. The products they have in their U.S. stores basically come from overseas. The long term picture is very attractive with lots of runway for growth internationally and the opening of new stores in the U.S.

They act more like a staple. They attract a wide range of age groups, young and old. Competition is tough, but they are run well and trade at a reasonable PE.

It has had 30% revenue growth year over year and e-commerce was up over 50%. It did temper guidelines in the last report. Wait for a downturn because it has history of volatility and is up a lot right now. The market is myopic in the way it looks at quarter by quarter results and any changes in margins.

So early in its growth phase. Square footage growth about 10-15% for next 5 years, and add that to same-store sales growth of ~5-6%. Under-penetrated in US.

Really impressive Q4, very strong brand, US expansion is going extremely well. Tariff impact due to where it sources product, and investors are still evaluating that (and you should, too, before stepping in). He's always wanted to own, but trades at premium. Long-term will do well, quality company, excellent financials.

Issue these companies face is where the manufacturing is, hard to move it someplace else. Margin hit will probably be more than the 2.5% calculated by Raymond James. Lots of uncertainty, stock can probably fall further.

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.

The question was on Aritzia or Dollarama taking some of the space left by the bankruptcy of HBC and could Aritzia move back up to $70. The answer was inconclusive.

Ran into self-imposed issues surrounding communication involving capex spending. Plus "lost" a fashion season. Only retailer he's comfortable owning -- big US business, very successful online. Makes and sells its own products. Reduced his portfolio position on valuation, but a bright future.

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.

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 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.

One of the best retailers. Recent correction was a major buying opportunity. Payback on new store openings is phenomenal, very high ROIC. Just scratching the surface on digital offerings. Innovation must offset volatility of consumer demand, and they've done a good job on this.