CA - Investing In Everyday Luxury - Why Aritzia Still Remains A Buy In Today's Market
2024-04-22 05:49:04 ET
Summary
- Aritzia's business fundamentals have improved, but its valuation has declined significantly compared to the S&P 500 Index.
- The company is focusing on geographic expansion, e-commerce acceleration, and increased brand awareness as part of its 2027 plan.
- ATZAF's exclusive brands and vertical integration are contributing to its success, and it continues to invest in its e-commerce capabilities.
- Aritzia's expanded distribution facilities can support tripling its revenue by the fiscal year 2027.
Aritzia's business fundamentals have improved since my previous analysis in March 2023 and its 2027 expansion plan is being well executed so far. I will evaluate in more details below how Aritzia has performed financially and in each of Aritzia's core strategies in the past year. However, Aritzia's valuation has declined significantly by over 18% compared to a 20%+ gain by the S&P 500 Index. Despite some lingering inventory risk and higher general and administrative expenses, Aritzia stands as a solid fashion powerhouse. As such, I continue to recommend "Buy" for Aritzia at this time.
Introduction
Aritzia, established in 1984 and headquartered in Vancouver, has evolved from a single store into a global fashion entity with 117 boutique stores across Canada and the U.S. as of November 2023. With a market capitalization exceeding $3.8 billion and annual revenues above $2 billion, Aritzia has solidified its position in the industry by specializing in women's clothing in the Everyday Luxury segment, with plans to expand further into men's wear....
Investing In Everyday Luxury - Why Aritzia Still Remains A Buy In Today's Market