Aritzia returns to sales growth in third quarter
Following two quarters of declining sales due to the Covid-19 pandemic, Vancouver-based womenswear retailer Aritzia Inc. saw its revenues rise 4.1% in Q3, thanks to a strong performance from its e-commerce business.
In the third quarter ended November 29, 2020, the company reported total net revenue of $278.3 million, up from $267.3 million in the same period in the previous year. The retailer’s e-commerce sales increased 78.5%.
This digital progress was partially offset by a drop in brick-and-mortar sales resulting from occupancy restrictions, reduced operating hours and government-mandated closures related to the ongoing coronavirus crisis.
Following temporary closures earlier this year, 96% of Aritzia’s retail fleet had reopened by the start of Q3. With the reclosure of 18 boutiques in November 2020, the company finished the quarter with 82% of its stores open.
According to the retailer, its reopened stores trended at an average of 81.0% of the productivity levels seen in the third quarter of the previous year.
Covid-19-related health and safety measures, along with talent investments made during the quarter, meant that the company’s selling, general and administrative expenses rose 16.7% year over year to $74.7 million, representing 26.8% of the retailer’s revenue.
Quarterly net income at Aritzia was therefore $30.5 million, down from $34.8 million in the prior-year period.
“We are extremely pleased with our third quarter performance. Our clients' enthusiastic response to our Fall/Winter product assortment demonstrates our ongoing ability to adapt to their changing lifestyle,” commented Aritzia founder, CEO and chairman Brian Hill in a release.
Year to date, the company’s net revenue fell 16.4%, from $705.2 million to $589.8 million. Net income for the nine-month period was $3.2 million, down from $68.9 million in the previous year.
“While the resurgence of Covid-19 has led to the temporary reclosure of 39 boutiques, we are well-positioned to continue to navigate the uncertainty,” Hill added. “Looking ahead, we remain focused on the execution of our growth strategies including driving digital innovation of e-commerce and omni, geographic expansion, product development, and brand awareness, while continuing to invest in infrastructure including our world-class talent.”
The company said that, in the fourth quarter to date, its e-commerce channel has maintained its strong momentum and should help moderate the impact of the most recent round of temporary store closures.
Aritzia currently operates more than 100 locations spread across North America, in cities including Vancouver, Toronto, Montreal, New York, Los Angeles, San Francisco and Chicago.
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