Aritzia Inc. (ATZ.TO)

Has never owned this, but there are concerns over same-store sales. Doesn't know when a turnaround will happen, but not this quarter. Could be several quarters. He owns Canadian Tire instead, within retail. He owns little Canadian retail; doesn't want exposure to the Canadian consumer.

Volatile, but are doing a great job growing their brand with lots of expansion ahead. Stores are busy, but they've challenges in inventory and customer spend. Any economic slowdown will challenge ATZ, but if same-store sales hold and store expansion continues, then shares will rise. Wait till earnings next week.

Owns only a small position, as it tends to be quite volatile. Issues with supply chains, inventory storage costs, and distribution centre project costs. Inventories are normalizing. Opening US stores, incurring extra costs right now. Really likes long-term US growth potential, possibly internationally. Noticed traffic softening due to economy. Going into new categories. TD upgraded it to a Buy.

Sold it in summer 2023 too early, but the chart this year is downward. It enjoyed a reopening trade as people started returning to offices. ATZ is an excellent fashion retailer, but people after Covid have stopped buying more clothes. Great managers and expansion team, but he will return to this only in an economic downturn.

Clothing company based in Vancouver. Founder owned, but not founder led. Fashion risk is concern for business (fickle trends). Expansion into USA a positive trait. Strong business performance the past 10 years. Retail business is also a tough space. Would rate business at around 8/10 overall. 

Hasn't been a good year, but therein lies the opportunity. Sales flatlined. Weak US and Canadian consumer. Fashion risk. Over inventoried. Over budget on distribution facility. Trades at 13x 2024 earnings, attractive. Expects stronger consumer in next 6-12 months. Increasing square footage by 35%. Getting its mojo back. No dividend.

Their revenue is up 120% in the last three years but the stock price is only up 20% from 2019. It didn't have the infrastructure, including delivering and storage, to keep up with the huge increase in revenue. They had to make decisions to keep up with the surging revenue but their decisions hurt the stock. The U.S. is a big growth area and their future is there. They are getting a 12 month payback on their new stores in the U.S. He thinks it has hit bottom.

Discretionary sector is tough, with worries about economic spending and GDP growth. This sector is the first to come off. Other retailers would perform better in the coming environment of slowing growth. See his Top Picks.

Very expensive. He targets $36.43, 50% upside. But be cautious with this. It's in a down trend and we're heading to a recession. He's bearish. Consumers are struggling to pay mortgages, not buying clothes.

They own some in their growth portfolio. The slowing economy affects their margins but it is good for long term growth in the U.S. with many new stores opening up this year.

An ugly chart this year. Retail in general will be under pressure. He can't tell how well ATZ will do. ATZ has done very well historically and wishes them well.

Smaller cap, so not a big position for her. Grew rapidly during Covid, then hit by series of headwinds. Longer term, still a growth story in the US. Additional costs for new stores, which are mostly coming online later this year. Foot traffic is weakening. Reports next week, she's not expecting upside surprises.

(A Top Pick Dec 07/22, Down 54%)

Disappointing for short term investors.
Two quarters of missed earnings.
Too much inventory on hand.
Second distribution center very expensive.
Assuming no recession, expecting further growth.
Optimistic and looking at a improved share price in 2024.
Would recommend buying shares at this price.

Coming off one heck of a run. Recent misses. It will come down to executing and coming through a good quarter. Rising interest rates starting to affect retail. Be cautious. Good company long-term. Starting to look attractive on valuation, but he's not at Buy yet.

Great brand. Fits a wide demographic in its niche. Wait till September to see if the bottom holds. She's underweight consumer discretionary right now. Not the right time, be patient. Trades at 23x forward PE. A bit undervalued.