Is Aritzia Stock The Next Canadian Ten-Bagger?

When a Canadian retailer like Aritzia pulls off a 33% jump in quarterly sales, it grabs my attention. Fashion companies thrive on momentum, and Aritzia is currently in quite a tear.

Aritzia didn’t just see growth at home. U.S. sales soared 45%, driven by new stores and a smart push into key American markets.

Both retail and online revenue grew by double digits. That sort of multi-channel strength is rare, especially in retail, and suggests the company’s strategy is working across borders.

Margins are moving up, with cost control and inventory discipline giving profits a noticeable boost. This is in stark contrast to the struggles the company was going through just a few years ago.

Is it sustainable? Lets find out.

Is Aritzia’s American Expansion Paying Off?

Aritzia’s latest quarter delivered a clear message. U.S. net revenue soared 45%, hitting $413 million and making up over 62% of total sales.

This wasn’t just a one off either. This is a structural shift in where the future growth comes from.

Here’s what’s driving the story south of the border:

• Boutique expansion: The company opened 13 new locations and repositioned 3 in the last year. More U.S. storefronts means better brand visibility, especially in high income areas.
• E-commerce activity: American online sales are following retail growth. The Spring/Summer lineup resonated, and digital marketing spend was well-timed.
• Brand momentum: Strategic marketing investments, especially on social media, are working. The brand is pulling new customers in markets like New York and Los Angeles.

Metric	Q1 2026	Q1 2025	Change
U.S. Net Revenue	$413M	$285M	+45%
U.S. Share of Net Revenue	62%	~57%	+5 points
Total Company Net Revenue	$663M	$499M	+33%

Scalability is key. Aritzia’s ability to maintain double-digit comps while opening new locations hints that demand isn’t limited to a few trendy neighbourhoods.

This tells me the brand isn’t just running hot, it’s genuinely scaling, which is rare for Canadian retailers expanding in the States. Margins have expanded. Gross margin rose to 47.2%, even with heavy investment.

It’s clear fixed costs are being leveraged effectively, which is a real test for any growth story.

The big question for investors: Can this continue as market share climbs? As long as boutique productivity and digital traction stay strong, there’s runway left. They’ve barely tapped the markets in the United States.

The U.S. market is simply much larger than Canada and, right now, there’s no obvious ceiling for Aritzia’s ambition.

Retail and E‑commerce Momentum: 34% Store Revenue, 30% Online Growth in Q1

Aritzia’s recent Q1 numbers were outstanding. Retail net revenue surged 34.2%, while e-commerce revenue grew an impressive 30%.

Any investor tracking fashion retailers knows these rates are well above average, even for the sector’s most nimble players.

In addition to this, it’s US revenue is now far outpacing it’s Canadian arm. This is a good sign.

I see this revenue split and the US growth as a healthy signal. Store openings are clearly delivering a payoff, drawing not only in-person shoppers but also boosting the company’s brand recognition across markets.

Physical retail remains a force in fashion, and Aritzia is using new locations to grab share in both Canadian and US cities. Yes, the Canadian end of the business has flatlined in terms of new boutiques but US expansion is the main priority here.

Several reports point to strong US store impacts, especially online spillover into nearby regions. Growth wasn’t just from topline expansion.

Gross margins improved by 320 basis points, powered by careful inventory management and targeted marketing.

Inventory optimization means less risk of markdowns or dead stock, two killers of profitability for a retailer. Long term followers of Aritzia will remember it was only a few years ago that this company was going through some horrible overstock issues that killed margins.

When I look at the balance between in-store and online, it feels repeatable if Aritzia keeps a disciplined approach.

Too many Canadian apparel chains have chased store growth without matching it with inventory discipline and brand momentum. Think of something like Canada Goose. Aritzia, at least for now, is threading that needle.

13 New Stores and 3 Repositions Fuel Sales Spike

Store counts aren’t just vanity stats, they give real insight into how a brand is resonating and growing.

Aritzia’s move to add 13 new boutiques and reposition 3 more in the U.S. signals a confident bet on brick-and-mortar. That’s a retail footprint jump of roughly 25%, which is much faster than the company has historically expanded.

The Soho flagship in Manhattan stands out. That address isn’t cheap, but it delivers brand prestige and foot traffic you just can’t replicate online.

When I look at occupancy costs, Aritzia’s strategy looks calculated.

They’re picking tier-one retail corridors in major U.S. cities, Manhattan, Chicago, and LA. These aren’t mall outposts; they’re statement locations in areas where people have a lot of disposable income.

What I like is the way these stores work as acquisition hubs. Opening boutiques in high-density U.S. metros doesn’t just boost retail sales, it pulls in new shoppers and feeds eCommerce by raising brand awareness.

The customer acquisition cost is higher than digital spend, but the long-term benefit is brand loyalty and higher spend per client. Aritzia’s strategy leans heavily on boutique-led branding strength.

That’s value that doesn’t show up immediately in the quarterly numbers, but it builds a competitive moat tougher than any online discounting war.

Gross Profit Jumped 420bps in Q4 on ‘Smart Spending’

Aritzia’s latest quarter really caught my attention, and not just because of headline growth. The real story is the jump in profitability.

In Q4, gross profit margin improved by 420 basis points. Adjusted EBITDA margin didn’t just inch up, it soared 740 basis points to reach 18%.

Why the surge? It comes down to disciplined spending and smarter operations. Management has made good on their talk about controlling costs. Reduced markdowns, lower warehousing expenses, and targeted marketing have all boosted margins.

Here’s a quick look at key margin drivers:

Driver	Impact
Reduced markdowns	Protected profits
Lower warehousing costs	More efficient distribution
Smart marketing	Better returns on ad spend
Occupancy cost tailwinds	Less drag on store-level earnings

To my eye, a lot of these improvements look like they could stick, at least in the near term. Lowering markdowns comes from tighter inventory management, which doesn’t just reverse overnight.

Shipping and freight costs are a wild card, but the gains from improved internal discipline are more sustainable than the market seems to expect.

If Aritzia can hold onto even half this margin expansion, the upside is definitely real.

Inventory Discipline and Cost Control: Can They Fuel Long-Term Profit?

Inventory discipline doesn’t always get the spotlight. For a retailer like Aritzia, though, it’s a real difference maker.

When I see a company trimming unnecessary inventory and staying lean, my confidence in its long-term profit potential tends to go up. Aritzia has been dialing back on excess stock.

This shift keeps more cash on hand. It also reduces the odds of big, margin-eroding markdowns at season’s end, a classic problem for fashion retailers and one that Aritzia went through just a few years ago.

The result? Fewer fire sales and steadier pricing. That’s good news for shareholders, honestly.

Cost control is another lever I watch closely. Aritzia’s latest results showed selling, general, and administrative expenses (SG&A) as a percentage of sales improved by 190 basis points year-over-year in Q1.

That’s a real positive. It tells me management isn’t just crossing its fingers and hoping for stronger sales; they’re actively getting more efficient.

If we look at standout industry practices like perpetual inventory tracking and proper safety stock, they help prevent overstocking or stockouts. These strategies also keep storage and holding costs under control.

Overall, there is a lot to like here. I was adding this company back in 2022 when there was rising inventory and the fear of a brand fallout. However, this looks to be overblown, and the company is simply firing on all cylinders.