Aritzia Inc. says its net income tripled to $15.1 million in its fiscal second quarter compared with last year as the retailer extended its streak of increased comparable sales.
An Aritzia store (JHVEPhoto/Shutterstock.com)
The Vancouver-based clothing retailer said Thursday that comparable sales growth climbed 11.5 per cent in the quarter that ended Aug. 26, making for 16 quarters of consecutive growth.
It said net revenue was up by 18 per cent to $205.4 million from $174 million in the same quarter last year as it saw sales growth both in stores and online.
The company recorded revenue growth of 40 per cent in its U.S. business in a boost of confidence for growth prospects, said company CEO Brian Hill on an analyst call.
"We think we're just at the tip of the iceberg as far as our recognition in the United States, that said it's growing very healthy and we're super excited about our business."
The company opened two new full stores in the U.S. in the quarter in San Diego and Washington, D.C., as well as a pop-up shop in San Jose, Calif. It also opened a new store in Waterloo, Ont.
Hill said the company will focus future store openings in the U.S. where it has a pipeline of locations in the works.
Adjusted net income excluding one-time items grew to $18.3 million or 16 cents per diluted share, up from $10.4 million or nine cents per share a year earlier.
Aritzia said its financial picture has benefited from improved product costs, the weakening of the U.S. dollar compared with last year, and a sales shift towards exclusive brands. Increased warehousing and distribution costs weighed on results.
Some key material costs are also providing a challenge for the company, said Hill.
"We are continuing to face increasing raw material costs, particularly wool, down, and polyester. We have already seen the cost of wool increase 25 per cent over the past year."
Hill said severe drought in Australia was helping to drive up wool costs, but that costs savings elsewhere have helped them avoid price increases.
"We're hesitant to increase our prices and pass those costs back on to the consumer."
The company says it has 90 stores in Canada and the U.S. as well as its e-commerce business.
