Q4 net revenue increased by 66.1% from last year to $444.3 million
Q4 net income increased
by 113.0% from last year to $34.2 million
Q4 Adjusted EBITDA(1) increased by 88.3% from
last year to $66.3 million
Founder and CEO Brian Hill will transition to Executive Chair on May 21, 2022,
and Jennifer Wong to become Chief Executive Officer of Aritzia at that time
VANCOUVER, BC, May 5, 2022
/PRNewswire/ - Aritzia Inc. (TSX: ATZ) "Aritzia" or the "Company"), a vertically integrated, innovative
design house offering Everyday Luxury online and in its boutiques, today announced its financial results for
fourth quarter and full year fiscal 2022 ended February 27, 2022.
"The outstanding momentum of the Aritzia brand continued through the fourth quarter of fiscal 2022 with net
revenue growth of 66.1% from last year. Ongoing strength in our business across all geographies and all
channels drove exceptional top and bottom line growth, in spite of meaningful supply chain challenges. For
the full fiscal year, our revenue increased 74%, led by unprecedented growth in the United States, where
revenue grew 132%, comprising 45% of total revenue, as we more than doubled our active clients. Our
eCommerce business grew 33% in fiscal 2022, on top of the 88% increase last year as we continue to advance
our digital initiatives. Sales in our boutiques were also exceptional with comparable sales growth of 59%
from fiscal 2021, whilst exceeding pre-pandemic levels with retail comps growing 15% from fiscal 2020," said
Brian Hill, Founder, Chief Executive Officer and Chairman.
"The outstanding momentum of our business has carried into the first quarter of fiscal 2023, reflecting the
tremendous client response to our Spring and Summer product. The performance of new and existing boutiques
in the United States, and the exciting real estate opportunities we are seeing, are further indicators of
the growing affinity for our brand. We continue to invest in our strategic growth drivers and world-class
infrastructure to ensure we are poised to maximize all opportunities ahead. I am grateful to our team
members for their hard work and dedication, which continues to propel us forward at a phenomenal pace," said
Brian Hill.
On the appointment of Jennifer Wong as CEO, Brian Hill said, "There is no better time and no one better to
lead Aritzia into the future than Jennifer Wong. It is evident that our tremendous success is a result of
Jennifer's contributions. She has been instrumental in accelerating our growth and will lead Aritzia in
capitalizing on the incredible opportunities we see ahead," Brian Hill continued. "Jennifer's leadership style
exemplifies our values, and deeply resonates with and inspires our people. I remain just as dedicated to and
passionate about Aritzia today as I did 38 years ago, and I am excited to work alongside Jennifer and our
experienced and tenured leadership team as we continue to deliver our much-loved Everyday Luxury
experience."
As Executive Chair, Brian Hill will continue to drive Aritzia's long-term growth and develop their much-loved
Everyday Luxury experience with full-time functional area leadership of Product, Marketing, Real Estate
Development, and Business Development.
Brian Hill has no immediate plans to make changes in share ownership position.
Jennifer Wong, President and Chief Operating Officer, said "I am honoured to lead Aritzia and our people into
the future with Brian and our senior leadership team, building upon the foundation we have built over
decades. For 35 years, I have had the privilege of working alongside Brian, whose commitment to Aritzia's
values, our people, clients, and the communities we serve is truly extraordinary. I would like to thank our
dedicated team, who have been pivotal to our success, our Board who have diligently laid the foundation for
a seamless transition, and Brian for his ongoing mentorship. I am excited to continue advancing Aritzia's
business and delivering on the incredible growth opportunities we see ahead."
As CEO, Jennifer Wong will lead Aritzia's people and business into our bright future. Jennifer will continue
to lead our business management functions and assume leadership of our sales channels, with oversight of
eCommerce immediately and Retail coming in due course.
John Currie, Lead Independent Director of Aritzia, said, "We are thrilled to appoint Jennifer Wong as CEO.
There is nobody better suited to lead Aritzia into its next phase of growth. Over the last 35 years,
Jennifer has been instrumental to our success, building credibility both internally and externally. Jennifer
has already taken on numerous CEO responsibilities, as we have been laying the foundation for a seamless
transition for years. Brian's continued involvement in the brand and business, matched by Jennifer's
long-term lasting approach to strategic growth, ensures Aritzia is poised for a bright future."
The Board has been involved throughout the entire succession planning process and worked with Aritzia's
leadership team to lay the foundation for an effective and seamless transition.
Fourth
Quarter Highlights
-
Net revenue increased by 66.1% to $444.3 million from Q4 2021 and 61.3% from Q4 2020
-
USA revenue increased by 108.8% to $216.8 million from Q4 2021 and 127.9% from Q4 2020,
comprising 48.8% of net revenue in Q4 2022
-
eCommerce revenue increased by 21.4% to $182.0 million from Q4 2021 and 119.9% from Q4 2020,
comprising 41.0% of net revenues in Q4 2022
-
Retail revenue increased by 123.0% to $262.4 million from Q4 2021 and 36.2% from Q4 2020,
achieving comparable sales growth(1) of 60% compared to Q4 2021 and 13% compared to
pre-COVID-19 Q4 2020
-
Gross profit margin
(1) increased to 40.4% from 38.5% in Q4 2021 and 37.3% in Q4 2020
-
Net income increased by 113.0% to $34.2 million from $16.1 million
-
Adjusted EBITDA
(1) increased to $66.3 million from $35.2 million in Q4 2021 and $42.4 million in Q4 2020
-
Adjusted Net Income
(1) of $0.34 per diluted share, compared to $0.16 per diluted share in Q4 2021 and $0.21
per diluted share in Q4 2020
|
(1)
|
Unless otherwise indicated, all amounts are expressed in
Canadian dollars. The Company's fourth quarter results include the consolidation of
CYC Design Corporation ("CYC") which closed on June 25, 2021. Due to the material
impact of COVID-19 on business operations in fiscal 2021 and 2022, certain
references to Q4 2020 and fiscal 2020 have been included where Management deems to
be a more meaningful measurement of the Company's performance. Certain metrics,
including those expressed on an adjusted or comparable basis, are non-IFRS measures
or supplementary measures. See "Non-IFRS Measures including Retail Industry Metrics"
and "Selected Consolidated Financial Information".
|
Strategic Accomplishments for Fiscal 2022
- Grew active US clients by over 100% in the 12 month period
- Achieved 131.8% growth in USA revenue, through strength in both our boutiques and eCommerce
- Drove continued momentum growing eCommerce revenue by 32.5% on top of 88.3% growth last year, to
comprise 37.8% of net revenue in fiscal 2022
- Strategically managed global supply chain disruptions to ensure product availability to meet demand
- Opened six new boutiques and repositioned six existing boutiques in premier real estate locations
- Launched store inventory visibility, digital gift cards and other digital capabilities as we accelerated
investments across infrastructure and talent to support future growth
- Advanced initiatives to support Aritzia's communities, cultivate diversity and enhance sustainability
Fourth Quarter Results Compared to Q4 2021
|
(in thousands of Canadian dollars, unless otherwise noted)
|
Q4 2022
13 weeks
|
Q4 2021
13 weeks
|
Variance
Q4 2022 to Q4 2021
|
|
|
|
|
|
|
|
|
%
|
% pts
|
|
eCommerce revenue
|
$
|
181,968
|
41.0%
|
$
|
149,864
|
56.0%
|
|
21.4%
|
|
|
Retail revenue
|
|
262,354
|
59.0%
|
|
117,661
|
44.0%
|
|
123.0%
|
|
|
Net revenue
|
|
444,322
|
100.0%
|
|
267,525
|
100.0%
|
|
66.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
179,506
|
40.4%
|
|
102,925
|
38.5%
|
|
74.4%
|
1.9%
|
|
|
|
|
|
|
|
|
|
|
|
SG&A
|
|
120,221
|
27.1%
|
|
72,357
|
27.0%
|
|
66.1%
|
0.1%
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$
|
34,225
|
7.7%
|
$
|
16,070
|
6.0%
|
|
113.0%
|
1.7%
|
|
|
|
|
|
|
|
|
|
|
|
Net income per diluted share
|
$
|
0.29
|
|
$
|
0.14
|
|
|
107.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
(1)
|
$
|
66,303
|
14.9%
|
$
|
35,205
|
13.2%
|
|
88.3%
|
1.7%
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Net Income
(1)
per diluted share
|
$
|
0.34
|
|
$
|
0.16
|
|
|
112.5%
|
|
|
|
|
|
|
|
|
|
|
|
Net revenue increased by 66.1% to $444.3 million, compared to $267.5 million in Q4 2021. The Company
continues to see an unprecedented acceleration of sales in the United States, where net revenues increased
by 108.8% to C$216.8 million, compared to C$103.8 million in Q4 2021.
-
eCommerce revenue increased by 21.4% to $182.0 million, compared to $149.9 million in Q4 2021.
The Company's eCommerce business continued its momentum, building on the 81.1% increase in Q4 2021.
-
Retail revenue increased by 123.0% to $262.4 million, compared to $117.7 million in Q4 2021. The
increase in revenue was led by outstanding performance of our comparable and new boutiques in the United
States, strong double digit comparable sales growth(1) in Canada, as well as boutique revenue
from 39 of our boutiques which were closed for the majority of Q4 2021. Boutique count at the end
of Q4 totaled 106 compared to 101 boutiques at the end of Q4 2021.
Gross profit increased by 74.4% to $179.5 million, compared to $102.9 million in Q4 2021. Gross
profit margin was 40.4%, compared to 38.5% in Q4 2021. The improvement in gross profit margin was primarily
due to leverage on occupancy costs, lower markdowns, and the strengthening of the Canadian dollar, partially
offset by higher expedited freight costs as a result of global supply chain disruptions.
Selling, general and administrative ("SG&A") expenses increased by 66.1% to $120.2 million,
compared to $72.4 million in Q4 2021. SG&A expenses were 27.1% of net revenue, compared to 27.0% in Q4
2021. The increase in SG&A expenses was primarily due to variable selling costs associated with the
increase in revenue and continued investment in talent, technology, and marketing initiatives.
Net income was $34.2 million, an increase of 113.0% compared to $16.1 million in Q4 2021.
Net income per diluted share was $0.29, compared to $0.14 in Q4 2021.
Adjusted EBITDA
(1) was $66.3 million or 14.9% of net revenue, an increase of 88.3% compared to $35.2
million or 13.2% of net revenue in Q4 2021.
Adjusted Net Income
(1) was $39.5 million, an increase of 123.3% compared to $17.7 million in Q4 2021.
Adjusted Net Income
(1) per diluted share was $0.34, an increase of 112.5% compared to $0.16 in Q4
2021.
Cash and cash equivalents at the end of Q4 totaled $265.2 million compared to $149.1 million at
the end of Q4 2021. In the last twelve months, the Company has repaid its $75.0 million term loan and funded
the initial payment of $32.9 million for the acquisition of CYC. The Company currently has zero drawn on its
revolving credit facility.
Inventory at the end of Q4 was $208.1 million, compared to $171.8 million at the end of Q4 2021.
The Company continues to manage its inventory position to meet demand despite global supply chain
disruptions.
Capital cash expenditures (net of proceeds from lease incentives)(1) were $16.4
million in Q4 2022, compared to $9.4 million in Q4 2021.
Fiscal 2022 Compared to Fiscal 2021
|
(in thousands of Canadian dollars,
unless otherwise noted)
|
Fiscal 2022
52 weeks
|
Fiscal 2021
52 weeks
|
Variance
|
|
|
|
|
|
|
|
|
%
|
% pts
|
|
eCommerce revenue
|
$
|
564,340
|
37.8%
|
$
|
425,929
|
49.7%
|
|
32.5%
|
|
|
Retail revenue
|
|
930,290
|
62.2%
|
|
431,394
|
50.3%
|
|
115.6%
|
|
|
Net revenue
|
|
1,494,630
|
100.0%
|
|
857,323
|
100.0%
|
|
74.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
654,952
|
43.8%
|
|
312,505
|
36.5%
|
|
109.6%
|
7.3%
|
|
|
|
|
|
|
|
|
|
|
|
SG&A
|
|
392,802
|
26.3%
|
|
250,726
|
29.2%
|
|
56.7%
|
(2.9%)
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$
|
156,917
|
10.5%
|
$
|
19,227
|
2.2%
|
|
716.1%
|
8.3%
|
|
|
|
|
|
|
|
|
|
|
|
Net income per diluted share
|
$
|
1.36
|
|
$
|
0.17
|
|
|
700.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
(1)
|
$
|
289,385
|
19.4%
|
$
|
76,812
|
9.0%
|
|
276.7%
|
10.4%
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Net Income
(1)
per
diluted share
|
$
|
1.53
|
|
$
|
0.23
|
|
|
565.2%
|
|
|
|
|
|
|
|
|
|
|
|
Net revenue increased by 74.3% to $1.5 billion, compared to $857.3 million in fiscal 2021. The
Company has seen an unprecedented acceleration of sales in the United States, where net revenues increased
by 131.8% to C$676.1 million, compared to C$291.7 million in fiscal 2021. The Company also saw meaningful
growth in Canada where net revenue increased by 44.7% to $818.5 million, compared to $565.6 million in
fiscal 2021.
Gross profit increased by 109.6% to $655.0 million, compared to $312.5 million in fiscal 2021. Gross
profit margin was 43.8% compared to 36.5% in fiscal 2021. The improvement in gross profit margin was
primarily due to leverage on occupancy costs, lower markdowns, the strengthening of the Canadian dollar, and
lower warehousing and distribution costs, partially offset by higher expedited freight costs as a result of
global supply chain disruptions and lower rent abatements.
SG&A expenses increased by 56.7% to $392.8 million, compared to $250.7 million in fiscal 2021.
SG&A expenses were 26.3% of net revenue compared to 29.2% of net revenue in fiscal 2021. Excluding the
benefit of government payroll subsidies, the increase in SG&A expenses was 42.2%. The increase in
SG&A expenses was primarily due to variable selling costs associated with the increase in revenue and
continued investment in talent, technology, and marketing initiatives.
Net income was $156.9 million, compared to $19.2 million in fiscal 2021.
Net income per diluted share was $1.36, compared to $0.17 in fiscal 2021.
Adjusted EBITDA
(1) was $289.4 million, or 19.4% of net revenue, compared to $76.8 million, or 9.0% of net
revenue in fiscal 2021.
Adjusted Net Income
(1) was $176.7 million, compared to $26.0 million in fiscal 2021.
Adjusted Net Income
(1) per diluted share was $1.53, compared to $0.23 for the fiscal 2021.
Capital cash expenditures (net of proceeds from lease incentives)(1) were
$52.6 million, compared to $42.5 million in fiscal 2021.
|
(1)
|
See "Non-IFRS Measures including Retail Industry Metrics" and
"Selected Consolidated Financial Information" below, including for a reconciliation
of the non-IFRS measures used in this release to the most comparable IFRS measures.
See also sections entitled "How We Assess the Performance of our Business",
"Non-IFRS Measures including Retail Industry Metrics" and "Selected Consolidated
Financial Information" in the Management's Discussion and Analysis for further
details concerning Adjusted EBITDA, Adjusted Net Income and Adjusted Net Income per
diluted share, capital cash expenditures (net of proceeds from lease incentives) and
free cash flow including definitions and reconciliations to the relevant reported
IFRS measure.
|
Outlook
The Company's strong momentum continued into the first quarter of fiscal 2023. Aritzia is on-track to deliver
net revenue of approximately $375 million, representing just over a 50% increase compared to last year. This
reflects continued strength in the United States across both its retail and eCommerce channels, as well as,
strong recovery of the Company's business in Canada. This revenue range for the first quarter reflects all
boutiques opened with no COVID-19 related restrictions in place, compared to last year when 50% or 34 of the
Company's boutiques in Canada were mandated to close for approximately two-thirds of the quarter.
For fiscal 2023, Aritzia currently expects the following:
- Net revenue of approximately $1.8 billion, representing an increase of approximately 20% from fiscal
2022. This is led by continued strength in the Company's business in the United States across both
channels, as well as continued growth in Canada driven by its eCommerce business and recovery in its
boutiques, and contribution from its retail expansion with:
- Eight to ten new boutiques with all but one in the United States, including Forum Shops in Las Vegas
and Aventura Mall in Miami already opened; and
- Four to five boutique expansions or repositions, including three to four locations in Canada and one
in the United States.
- Gross profit margin to decrease by approximately 100 bps compared to last year, reflecting ongoing
impacts from global supply chain disruptions, inflationary pressure, and discontinued COVID relief
subsidies;
- SG&A as a percent of net revenue to increase approximately 50 bps to 100 bps compared to last year,
reflecting ongoing investments to fuel our future growth;
- Net capital expenditures in the range of $110 million to $120 million, comprised of:
- Boutique network growth,
- New distribution centre in the Greater Toronto area, and
- Ongoing investments in technology, infrastructure to enhance the Company's eCommerce capabilities
and omni-channel experience, and support office expansion.
The foregoing outlook is based on management's current strategies and may be considered forward-looking
information under applicable securities laws. Such outlook is based on estimates and assumptions made by
management regarding, among other things, general economic and geopolitical conditions and the competitive
environment as well as further COVID-19 resurgences. Readers are cautioned that actual results may vary. See
also the "Forward-Looking Information" section of this earnings release and "Risk Factors" section of our
MD&A and AIF.
Normal Course Issuer Bid
On January 12, 2022, the Company announced the commencement of a normal course issuer bid ("NCIB") through
the facilities of the Toronto Stock Exchange to repurchase and cancel up to 3,732,725 of its subordinate
voting shares ("Shares"), representing approximately 5.0% of the public float of 74,654,507, during the
twelve month period commencing January 17, 2022 and ending January 16, 2023. During fiscal 2022, the Company
repurchased 164,200 Shares for cancellation at an average price of $54.79 per Share, for total cash
consideration of $9.0 million.
Conference Call Details
A conference call to discuss the Company's fourth quarter results is scheduled for Thursday, May 5, 2022, at
1:30 p.m. PT / 4:30 p.m. ET. To participate, please dial 1-800-319-4610 (North America toll-free) or
1-416-915-3239 (Toronto and overseas long-distance). The call is also accessible via webcast at http://investors.aritzia.com/events-and-presentations/. A recording
will be available shortly after the conclusion of the call. To access the replay, please dial 1-855-669-9658
and the access code 8779. An archive of the webcast will be available on Aritzia's website.
About Aritzia
Aritzia is a vertically integrated design house with an innovative global platform, home to an extensive
portfolio of exclusive brands for every function and individual aesthetic. We're about good design, quality
materials and timeless style that endures and inspires — all with the wellbeing of our People and Planet in
mind. We call this Everyday Luxury.
Founded in 1984, in Vancouver, Canada, we create and curate products that are both beautiful and beautifully
made, cultivate aspirational environments, offer engaging service that delights, and connect through
captivating communications. We pride ourselves on providing immersive, and highly personal shopping
experiences at aritzia.com and in our 100+ boutiques throughout North
America to everyone, everywhere.
Everyday Luxury. To Elevate Your World.™
Comparable Sales Growth
Comparable sales growth is typically a useful operating metric in assessing the performance of the Company's
business to explain our total combined revenue growth in eCommerce and established boutiques. Due to
temporary boutique closures from COVID-19, which resulted in boutiques being removed from our comparable
store base, we believe total comparable sales growth is not currently representative of our business and
therefore we have not reported figures on this metric in this MD&A. Instead, we may make a temporary
reference in this MD&A to retail comparable sales growth from established boutiques which is calculated
as comparable sales growth with the exclusion of eCommerce revenue growth..
Non-IFRS Measures including Retail Industry Metrics
This press release makes reference to certain non-IFRS measures including certain retail industry metrics.
These measures are not recognized measures under IFRS, do not have a standardized meaning prescribed by
IFRS, and are therefore unlikely to be comparable to similar measures presented by other companies. Rather,
these measures are provided as additional information to complement those IFRS measures by providing further
understanding of our results of operations from management's perspective. Accordingly, these measures should
not be considered in isolation nor as a substitute for analysis of our financial information reported under
IFRS. We use non-IFRS measures including "EBITDA", "Adjusted EBITDA", "Adjusted Net Income", "Adjusted Net
Income per Diluted Share", "capital cash expenditures (net of proceeds from lease incentives)" and "free
cash flow." This press release also makes reference to "gross profit margin" as well as "comparable sales
growth", which are commonly used operating metrics in the retail industry but may be calculated differently
compared to other retailers. Gross profit margin and comparable sales growth are considered supplementary
measures under applicable securities laws. These non-IFRS measures including retail industry metrics are
used to provide investors with supplemental measures of our operating performance and thus highlight trends
in our core business that may not otherwise be apparent when relying solely on IFRS measures. We believe
that securities analysts, investors and other interested parties frequently use non-IFRS measures including
retail industry metrics in the evaluation of issuers. Our management also uses non-IFRS measures including
retail industry metrics in order to facilitate operating performance comparisons from period to period, to
prepare annual operating budgets and forecasts and to determine components of management compensation.
Definitions and reconciliations of non-IFRS measures to the relevant reported measures can be found in our
MD&A. Such reconciliations can also be found in this press release under the heading "Selected
Consolidated Financial Information".
Forward-Looking Information
Certain statements made in this press release may constitute forward-looking information under applicable
securities laws. Forward-looking statements are based on information currently available to management and
on estimates and assumptions made by management regarding, among other things, general economic and
geopolitical conditions and the competitive environment within the retail industry, in light of its
experience and perceptions of historical trends, current conditions and expected future developments, as
well as other factors that are believed to be appropriate and reasonable in the circumstances. These
statements may relate to our future financial outlook, our leadership transition and its impact on our
business, people and growth, our plans relating to our distribution facilities and digital infrastructure,
and anticipated events or results and include, our ability to sustain momentum in our business and advance
our strategic growth drivers, continued focus on driving digital innovation and eCommerce and Omni
capabilities, accelerating boutique growth and expanding our product assortment, acquiring new clients and
investing in our infrastructure and growing team, the Company's response to mitigate anticipated supply
chain disruptions, geopolitical risks, inflationary pressures and labour shortages, repurchases under our
NCIB, our outlook for: (i) net revenue in the first quarter of fiscal 2023, (ii) net revenue in fiscal 2023,
(iii) gross profit margin in fiscal 2023, (iv) SG&A as a percent of net revenue in fiscal 2023, (v) net
capital expenditure in fiscal 2023 and (vi) new boutiques and expansion or repositioning of existing
boutiques in fiscal 2023. Particularly, information regarding our expectations of future results, targets,
performance achievements, prospects or opportunities is forward-looking information. As the context
requires, this may include certain targets as disclosed in the prospectus for our initial public offering,
which are based on the factors and assumptions, and subject to the risks, as set out therein and herein.
Often but not always, forward-looking statements can be identified by the use of forward-looking terminology
such as "plans", "targets", "expects" or "does not expect", "is expected", "an opportunity exists",
"budget", "scheduled", "estimates", "outlook", "forecasts", "projection", "prospects", "strategy",
"intends", "anticipates", "does not anticipate", "believes", or variations of such words and phrases or
state that certain actions, events or results "may", "could", "would", "might", "will", "will be taken",
"occur" or "be achieved". In addition, any statements that refer to expectations, intentions, projections or
other characterizations of future events or circumstances contain forward-looking information. Statements
containing forward-looking information are not historical facts but instead represent our expectations,
estimates and projections regarding future events or circumstances.
Implicit in forward-looking statements in respect of the Company's expectations for: (i) net revenue of
approximately $375 million for the first quarter of fiscal 2023, representing just over a 50% increase
compared to last year, (ii) net revenue of approximately $1.8 billion in fiscal 2023, representing an
increase of approximately 20% from fiscal 2022, (iii) gross profit margin to decrease by approximately 100
bps compared to last year, (iv) SG&A as a percent of net revenue to increase approximately 50 bps to 100
bps compared to last year and (v) net capital expenditures in the range of $100 million to $120 million, are
certain current assumptions including the continued acceleration of sales in the United States both in
retail and eCommerce channels as well as continued momentum of the Company's eCommerce business in Canada.
The Company's forward-looking information is also based upon assumptions regarding the overall retail
environment, the COVID-19 pandemic and related health and safety protocols and currency exchange rates for
fiscal 2023. Specifically, we have assumed the following exchange rates for fiscal 2023: USD:CAD = 1:1.26.
Given this unprecedented period of uncertainty, there can be no assurances regarding: (a) the limitations or
restrictions that may be placed on servicing our clients in reopened boutiques or potential re-closing of
boutiques or the duration of any such limitations or restrictions; (b) the COVID-19-related impacts on
Aritzia's business, operations, labour force, supply chain performance and growth strategies, (c) Aritzia's
ability to mitigate such impacts, including ongoing measures to enhance short-term liquidity, contain costs
and safeguard the business; (d) general economic conditions related to COVID-19 and impacts to consumer
discretionary spending and shopping habits; (e) credit, market, currency, commodity market, inflation,
interest rates, global supply chains, operational, and liquidity risks generally; (f) geopolitical events;
and (g) other risks inherent to Aritzia's business and/or factors beyond its control which could have a
material adverse effect on the Company.
Many factors could cause our actual results, level of activity, performance or achievements or future events
or developments to differ materially from those expressed or implied by the forward-looking statements,
including, without limitation, the factors discussed in the "Risk Factors" section of the Company's annual
information form dated May 5, 2022 for the fiscal year ended February 27, 2022 (the "AIF"). A copy of the
AIF and the Company's other publicly filed documents can be accessed under the Company's profile on the
System for Electronic Document Analysis and Retrieval ("SEDAR") at www.sedar.com.
The Company cautions that the list of risk factors and uncertainties described in the AIF is not exhaustive
and other factors could also adversely affect its results. Readers are urged to consider the risks,
uncertainties and assumptions carefully in evaluating the forward-looking information and are cautioned not
to place undue reliance on such information. The forward-looking information contained in this press release
represents our expectations as of the date of this press release (or as the date they are otherwise stated
to be made), and are subject to change after such date. However, we disclaim any intention or obligation or
undertaking to update or revise any forward-looking information whether as a result of new information,
future events or otherwise, except as required under applicable securities laws.
Selected Consolidated Financial Information
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(in thousands of Canadian dollars,
unless otherwise noted)
|
Q4 2022
13 Weeks
|
Q4 2021
13 Weeks
|
Q4 2020
13 Weeks
|
Fiscal 2022
52 Weeks
|
Fiscal 2021
52 Weeks
|
Fiscal 2020
52 Weeks
|
|
|
|
|
|
|
|
|
Net revenue
|
$
|
444,322
|
100.0%
|
$
|
267,525
|
100.0%
|
$
|
275,430
|
100.0%
|
$
|
1,494,630
|
100.0%
|
$
|
857,323
|
100.0%
|
$
|
980,589
|
100.0%
|
|
|
Cost of goods sold
|
|
264,816
|
59.6%
|
|
164,600
|
61.5%
|
|
172,589
|
62.7%
|
|
839,678
|
56.2%
|
|
544,818
|
63.5%
|
|
577,165
|
58.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
179,506
|
40.4%
|
|
102,925
|
38.5%
|
|
102,841
|
37.3%
|
|
654,952
|
43.8%
|
|
312,505
|
36.5%
|
|
403,424
|
41.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative
|
|
120,221
|
27.1%
|
|
72,357
|
27.0%
|
|
64,331
|
23.4%
|
|
392,802
|
26.3%
|
|
250,726
|
29.2%
|
|
243,362
|
24.8%
|
|
|
Stock-based compensation
|
|
5,725
|
1.3%
|
|
4,193
|
1.6%
|
|
2,411
|
0.9%
|
|
26,131
|
1.7%
|
|
10,691
|
1.2%
|
|
7,790
|
0.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations
|
|
53,560
|
12.1%
|
|
26,375
|
9.9%
|
|
36,099
|
13.1%
|
|
236,019
|
15.8%
|
|
51,088
|
6.0%
|
|
152,272
|
15.5%
|
|
|
Finance expense
|
|
6,092
|
1.4%
|
|
6,464
|
2.4%
|
|
6,914
|
2.5%
|
|
25,202
|
1.7%
|
|
28,420
|
3.3%
|
|
28,319
|
2.9%
|
|
|
Other expense (income)
|
|
740
|
0.2%
|
|
(2,129)
|
(0.8%)
|
|
(1,354)
|
(0.5%)
|
|
(8,783)
|
(0.6%)
|
|
(3,534)
|
(0.4%)
|
|
(2,185)
|
(0.2%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
46,728
|
10.5%
|
|
22,040
|
8.2%
|
|
30,539
|
11.1%
|
|
219,600
|
14.7%
|
|
26,202
|
3.1%
|
|
126,138
|
12.9%
|
|
|
Income tax expense
|
|
12,503
|
2.8%
|
|
5,970
|
2.2%
|
|
8,824
|
3.2%
|
|
62,683
|
4.2%
|
|
6,975
|
0.8%
|
|
35,544
|
3.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$
|
34,225
|
7.7%
|
$
|
16,070
|
6.0%
|
$
|
21,715
|
7.9%
|
$
|
156,917
|
10.5%
|
$
|
19,227
|
2.2%
|
$
|
90,594
|
9.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Performance Measures:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-over-year net revenue
growth
(decline)
|
|
66.1%
|
|
|
(2.9%)
|
|
|
6.3%
|
|
|
74.3%
|
|
|
(12.6%)
|
|
|
12.2%
|
|
|
|
Comparable sales growth
(i)
|
|
n/a
|
|
|
n/a
|
|
|
8.9%
|
|
|
n/a
|
|
|
n/a
|
|
|
7.6%
|
|
|
|
Capital cash expenditures (net of
proceeds
from lease incentives)
|
$
|
(16,434)
|
|
$
|
(9,415)
|
|
$
|
(9,732)
|
|
$
|
(52,607)
|
|
$
|
(42,529)
|
|
$
|
(36,253)
|
|
|
|
Free cash flow
|
$
|
(37,047)
|
|
$
|
(24,936)
|
|
$
|
20,656
|
|
$
|
221,937
|
|
$
|
36,306
|
|
$
|
117,246
|
|
|
|
Number of boutiques, end of
period
|
|
106
|
|
|
101
|
|
|
96
|
|
|
106
|
|
|
101
|
|
|
96
|
|
|
|
|
Note:
|
|
(i) Please see the "Comparable Sales Growth" section above for
more details.
|
NET REVENUE BY GEOGRAPHIC LOCATION
|
(in thousands of Canadian dollars)
|
Q4 2022
13 weeks
|
Q4 2021
13 weeks
|
Q4 2020
13 weeks
|
Fiscal 2022
52 weeks
|
Fiscal 2021
52 weeks
|
Fiscal 2020
52 weeks
|
|
|
|
|
|
|
|
|
Canada
|
$ 227,524
|
$ 163,681
|
$ 180,303
|
$ 818,495
|
$ 565,591
|
$ 642,973
|
|
United States
|
216,798
|
103,844
|
95,127
|
676,135
|
291,732
|
337,616
|
|
|
|
|
|
|
|
|
Net revenue
|
$ 444,322
|
$ 267,525
|
$ 275,430
|
$ 1,494,630
|
$ 857,323
|
$ 980,589
|
CONSOLIDATED CASH FLOWS
|
(in thousands of Canadian dollars)
|
Q4 2022
13 weeks
|
Q4 2021
13 weeks
|
Q4 2020
13 weeks
|
Fiscal 2022
52 weeks
|
Fiscal 2021
52 weeks
|
Fiscal 2020
52 weeks
|
|
|
|
|
|
|
|
|
Net cash generated from operating activities
|
$ 733
|
$ 5,438
|
$ 45,463
|
$ 338,353
|
$ 125,628
|
$ 210,539
|
|
Net cash (used in) generated from financing
activities
|
(20,171)
|
(17,969)
|
(11,179)
|
(124,093)
|
(40,586)
|
(145,865)
|
|
Cash used in investing activities
|
(20,734)
|
(11,368)
|
(12,167)
|
(99,576)
|
(50,848)
|
(47,790)
|
|
Effect of exchange rate changes on cash and
cash equivalents
|
(515)
|
(990)
|
(33)
|
1,414
|
(2,797)
|
(31)
|
|
|
|
|
|
|
|
|
Change in cash and cash equivalents
|
$ (40,687)
|
$ (24,889)
|
$ 22,084
|
$ 116,098
|
$ 31,397
|
$ 16,853
|
RECONCILIATION OF NET INCOME TO EBITDA, ADJUSTED EBITDA AND ADJUSTED NET INCOME
|
(in thousands of Canadian dollars,
unless otherwise noted)
|
Q4 2022
13 weeks
|
Q4 2021
13 weeks
|
Q4 2020
13 weeks
|
Fiscal 2022
52 weeks
|
Fiscal 2021
52 weeks
|
Fiscal 2020
52 weeks
|
|
|
|
|
|
|
|
|
Reconciliation of Net Income to
EBITDA and Adjusted EBITDA:
|
|
|
|
|
|
|
|
Net income
|
$ 34,225
|
$ 16,070
|
$ 21,715
|
$ 156,917
|
$ 19,227
|
$ 90,594
|
|
Depreciation and amortization
|
12,110
|
10,723
|
9,017
|
44,569
|
38,871
|
34,422
|
|
Depreciation on right-of-use assets
|
17,593
|
16,410
|
15,117
|
68,058
|
66,278
|
59,080
|
|
Finance expense
|
6,092
|
6,464
|
6,914
|
25,202
|
28,420
|
28,319
|
|
Income tax expense
|
12,503
|
5,970
|
8,824
|
62,683
|
6,975
|
35,544
|
|
|
|
|
|
|
|
|
EBITDA
|
82,523
|
55,637
|
61,587
|
357,429
|
159,771
|
247,959
|
|
|
|
|
|
|
|
|
Adjustments to EBITDA:
|
|
|
|
|
|
|
|
Stock-based compensation
|
5,725
|
4,193
|
2,411
|
26,131
|
10,691
|
7,790
|
|
Rent impact from IFRS 16, Leases
(i)
|
(22,939)
|
(21,985)
|
(20,973)
|
(90,048)
|
(89,949)
|
(82,527)
|
|
Unrealized gain on equity derivatives
contracts
|
994
|
(2,640)
|
(650)
|
(11,192)
|
(3,701)
|
(650)
|
|
Fair value adjustment of NCI in
exchangeable shares liability
|
-
|
-
|
-
|
2,000
|
-
|
-
|
|
Fair value adjustment for inventories
acquired in CYC
|
-
|
-
|
-
|
1,902
|
-
|
-
|
|
Acquisition costs of CYC
|
-
|
-
|
-
|
2,633
|
-
|
-
|
|
Secondary offering transaction costs
|
-
|
-
|
-
|
530
|
-
|
-
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
|
$ 66,303
|
$ 35,205
|
$ 42,375
|
$ 289,385
|
$ 76,812
|
$ 172,572
|
|
Adjusted EBITDA as a percentage
of net revenue
|
14.9%
|
13.2%
|
15.4%
|
19.4%
|
9.0%
|
17.6%
|
|
|
|
|
|
|
|
|
Reconciliation of Net Income to
Adjusted Net Income:
|
|
|
|
|
|
|
|
Net income
|
$ 34,225
|
$ 16,070
|
$ 21,715
|
$ 156,917
|
$ 19,227
|
$ 90,594
|
|
Adjustments to net income:
|
|
|
|
|
|
|
|
Stock-based compensation
|
5,725
|
4,193
|
2,411
|
26,131
|
10,691
|
7,790
|
|
Unrealized loss (gain) on
equity
derivatives contracts
|
994
|
(2,640)
|
(650)
|
(11,192)
|
(3,701)
|
(650)
|
|
Fair value adjustment of NCI in
exchangeable shares liability
|
-
|
-
|
-
|
2,000
|
-
|
-
|
|
Fair value adjustment for
inventories acquired in CYC
|
-
|
-
|
-
|
1,902
|
-
|
-
|
|
Acquisition costs of CYC
|
-
|
-
|
-
|
2,633
|
-
|
-
|
|
Secondary offering transaction
costs
|
-
|
-
|
-
|
530
|
-
|
-
|
|
Related tax effects
|
(1,469)
|
55
|
(48)
|
(2,185)
|
(189)
|
(346)
|
|
Adjusted Net Income
|
$ 39,475
|
$ 17,678
|
$ 23,428
|
$ 176,736
|
$ 26,028
|
$ 97,388
|
|
Adjusted Net Income as a
percentage of net revenue
|
8.9%
|
6.6%
|
8.5%
|
11.8%
|
3.0%
|
9.9%
|
|
Weighted average number of
diluted shares outstanding (thousands)
|
116,774
|
114,052
|
113,120
|
115,784
|
112,844
|
112,128
|
|
Adjusted Net Income per diluted share
|
$ 0.34
|
$ 0.16
|
$ 0.21
|
$ 1.53
|
$ 0.23
|
$ 0.87
|
|
|
Note:
|
|
(i) Rent Impact from IFRS 16, Leases
|
|
(in thousands of Canadian dollars)
|
Q4 2022
13 weeks
|
Q4 2021
13 weeks
|
Q4 2020
13 weeks
|
Fiscal 2022
52 weeks
|
Fiscal 2021
52 weeks
|
Fiscal 2020
52 weeks
|
|
|
|
|
|
|
|
|
Depreciation of right-of-use assets,
excluding fair value adjustments
|
$ (17,460)
|
$ (16,410)
|
$ (15,117)
|
$ (67,702)
|
$ (66,278)
|
$ (59,080)
|
|
Interest expense on lease liabilities
|
(5,479)
|
(5,575)
|
(5,856)
|
(22,346)
|
(23,671)
|
(23,447)
|
|
|
|
|
|
|
|
|
Rent impact from IFRS 16, Leases
|
$ (22,939)
|
$ (21,985)
|
$ (20,973)
|
$ (90,048)
|
$ (89,949)
|
$ (82,527)
|
CAPITAL CASH EXPENDITURES (NET OF PROCEEDS FROM LEASE INCENTIVES)
|
(in thousands of Canadian dollars)
|
Q4 2022
13 weeks
|
Q4 2021
13 weeks
|
Q4 2020
13 weeks
|
Fiscal 2022
52 weeks
|
Fiscal 2021
52 weeks
|
Fiscal 2020
52 weeks
|
|
Cash used in investing activities
|
$ (20,734)
|
$ (11,368)
|
$ (12,167)
|
$ (99,576)
|
$ (50,848)
|
$ (47,790)
|
|
Acquisition of CYC Design
Corporation,
net of cash
acquired
|
-
|
-
|
-
|
32,555
|
-
|
-
|
|
Proceeds from lease incentives
|
4,300
|
1,953
|
2,435
|
14,414
|
8,319
|
11,537
|
|
|
|
|
|
|
|
|
Capital cash expenditures (net of
proceeds from lease incentives)
|
$ (16,434)
|
$ (9,415)
|
$ (9,732)
|
$ (52,607)
|
$ (42,529)
|
$ (36,253)
|
FREE CASH FLOW
|
(in thousands of Canadian dollars)
|
Q4 2022
13 weeks
|
Q4 2021
13 weeks
|
Q4 2020
13 weeks
|
Fiscal 2022
52 weeks
|
Fiscal 2021
52 weeks
|
Fiscal 2020
52 weeks
|
|
Net cash generated from operating
activities
|
$ 733
|
$ 5,438
|
$ 45,463
|
$ 338,353
|
$ 125,628
|
$ 210,539
|
|
Interest paid on credit facilities
|
613
|
890
|
971
|
2,491
|
4,651
|
4,429
|
|
Proceeds from lease incentives
|
4,300
|
1,953
|
2,435
|
14,414
|
8,319
|
11,537
|
|
Repayments of principal on lease
liabilities
|
(21,959)
|
(21,849)
|
(16,046)
|
(66,300)
|
(51,444)
|
(61,469)
|
|
Purchase of property, equipment and
intangible assets
|
(20,734)
|
(11,368)
|
(12,167)
|
(67,021)
|
(50,848)
|
(47,790)
|
|
|
|
|
|
|
|
|
Free cash flow
|
$ (37,047)
|
$ (24,936)
|
$ 20,656
|
$ 221,937
|
$ 36,306
|
$ 117,246
|
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
|
(in thousands of Canadian dollars)
|
|
As at
February 27, 2022
|
|
As at
February 28, 2021
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$ 265,245
|
|
$ 149,147
|
|
Accounts receivable
|
|
8,147
|
|
6,202
|
|
Income taxes recoverable
|
|
6,455
|
|
4,719
|
|
Inventory
|
|
208,125
|
|
171,821
|
|
Prepaid expenses and other current assets
|
|
33,564
|
|
23,452
|
|
Total current assets
|
|
521,536
|
|
355,341
|
|
Property and equipment
|
|
223,190
|
|
189,568
|
|
Intangible assets
|
|
87,398
|
|
62,049
|
|
Goodwill
|
|
198,846
|
|
151,682
|
|
Right-of-use assets
|
|
362,887
|
|
363,417
|
|
Other assets
|
|
4,271
|
|
2,886
|
|
Deferred tax assets
|
|
26,458
|
|
15,794
|
|
Total assets
|
|
$ 1,424,586
|
|
$ 1,140,737
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities
|
|
$ 179,344
|
|
$ 131,893
|
|
Income taxes payable
|
|
58,917
|
|
8,287
|
|
Current portion of contingent consideration
|
|
6,619
|
|
-
|
|
Current portion of lease liabilities
|
|
86,724
|
|
71,452
|
|
Deferred revenue
|
|
55,721
|
|
37,563
|
|
Total current liabilities
|
|
387,325
|
|
249,195
|
|
Lease liabilities
|
|
417,067
|
|
423,380
|
|
Other non-current liabilities
|
|
22,359
|
|
15,059
|
|
Contingent consideration
|
|
6,618
|
|
-
|
|
Non-controlling interest in exchangeable shares
liability
|
|
35,500
|
|
-
|
|
Deferred tax liabilities
|
|
24,906
|
|
17,985
|
|
Long-term debt
|
|
-
|
|
74,855
|
|
Total liabilities
|
|
893,775
|
|
780,474
|
|
|
|
|
|
|
Shareholders' equity
|
|
|
|
|
|
Share capital
|
|
251,291
|
|
228,665
|
|
Contributed surplus
|
|
56,342
|
|
56,606
|
|
Retained earnings
|
|
223,553
|
|
75,216
|
|
Accumulated other comprehensive loss
|
|
(375)
|
|
(224)
|
|
|
|
|
|
|
Total shareholders' equity
|
|
530,811
|
|
360,263
|
|
|
|
|
|
|
Total liabilities and shareholders' equity
|
|
$ 1,424,586
|
|
$ 1,140,737
|
BOUTIQUE COUNT SUMMARY
|
Q4 2022
13 weeks
(i)
|
Q4 2021
13 weeks
|
Fiscal 2022
52 weeks
(i)
|
Fiscal 2021
52 weeks
|
|
|
|
|
|
|
Number of boutiques, beginning of period
|
105
|
101
|
101
|
96
|
|
New boutiques
|
2
|
1
|
6
|
7
|
|
Repositioned to flagship boutique
|
-
|
(1)
|
-
|
(1)
|
|
Boutique closure
|
(1)
|
-
|
(1)
|
-
|
|
Boutiques temporarily closed due to mall
redevelopment
|
-
|
-
|
-
|
(1)
|
|
Number of boutiques, end of period
|
106
|
101
|
106
|
101
|
|
Boutiques expanded or repositioned
|
1
|
-
|
6
|
3
|
|
|
Note:
|
|
(i) CYC had four boutiques as at February 27, 2022 which are
excluded from the boutique count.
|
View original content to download
multimedia:https://www.prnewswire.com/news-releases/aritzia-reports-fourth-quarter-and-full-year-fiscal-2022-results-and-planned-ceo-succession-301541278.html
SOURCE Aritzia Inc.