Aritzia Inc. (ATZ.TO)

Owns shares in company.
Disappointing past 6 months due to inventory build ups.
Current share price a good time to buy.
Weakening consumer demand not a concern for the long term shareholder.
Excellent brand value, and strong management team.
Substantial insider buying. 

Inventory caught up with them. Still likes it, believes still on track to follow LULU and ZARA. Years and years of growth ahead. Momentum is broken, and that will take some time to turn around. You can nibble here.

Recent share price weakness due to less discretionary spending.
Lower priced retail outlets performing better (Costco, Walmart, Dollarama).
Would not buy at this time.
Waiting for economy to recover.

Yesterday down 25%. Revenue guidance brought down on weakening consumer base. This further depresses operating margins from already increased costs for warehousing, store openings, and inflation. Market's questioning management credibility. She believes in its long-term growth potential.

One of largest holdings in global equity growth fund.
Disappointing year for share price performance.
Problems with supply side inventory management.
Inflation also taking a bite into corporate earnings.
Expecting further growth in second half of the year.
Large runway for expanded footprint in USA.
Loyal shoppers that continue to spend.

It had strong quarterly results but announced that it will increase investment spending which will affect margins. This is a temporary situation which should improve after a year. There is 20 to 30% upside. It has core and staple products and management is methodical and meticulous in their expansion. Its square footage is growing by about 15% so revenue should increase along with earnings.     Buy 5  Hold  4  Sell 0

Very strong Canadian brand.
Good pivot during Covid-19 (comfort clothing).
Excellent retail performance.
Back to work will see demand for work clothing.
Great long term hold with excellent fundamentals.
$50 share price target (40%+ upside). 

This Canadian success story also carries a high beta (1.58), faces uncertainty if there’s a recession, the retail sector had a very choppy reporting season in May, and after five months in 2023 ATZ shares are down 23%. So, why recommend it?
Aritzia remains a strong performer, beating quarter after quarter. EPS grew 19% over the past year, while revenue grew 24.19% over the past five years.  Read Planes, pizza and clothes for our full analysis.

As a 67-year-old guy, he underestimated this company. They have a great online business during Covid and have captured the women's and teenage markets. He owns little fashion in general. He pleads the 5th on this. They've done well, but the valuation remains a little expensive.

Editor's Note - The question was his preference over PLC and ATZ. PLC has had issues but earnings are more stable. ATZ is still a bit pricey. He likes it on valuation to growth but PLC is the better buy for the next year. 

High quality company.
Concerned about high retail orientation.
Revenue per square foot of retail very attractive.
Successful expansion into USA impressive.
20x earnings a good entry point - wait for shares to fall before investing.

On same growth path as LULU was. Over-inventoried from over-ordering, but still a great hold. He's buying more. Great return from sub-$40 prices. No dividend.

Still believes in its long-term US growth opportunity. Stock came off on quarterly reports. Unit growth potential is attractive. Margins will be hurt this year due to inflation, inventory excess, and expenses incurred by opening new stores and a distribution centre. Revenue should still grow by double digits. No dividend.

Aritzia has a great track record and a bright future along with a short term stumble. It sees opportunities and will elevate capital expenditures. It is looking for double digit revenue earnings growth for the next few years. Square footage is up 15% this year which is a very rapid rate of growth. Too much attention has been paid to margins and same store sales which will fluctuate over time. There is lots of room to grow in the U.S.
Buy 4  Hold 4  Sell 0

As long as you limit risk near recent lows, an attractive entry point. Downtrend is still in place. An interesting opportunity. Breaking the downtrend would be quite positive.