The following is a summary of the Aritzia Inc. (ATZAF) Q2 2025 Earnings Call Transcript:

Financial Performance:

• Aritzia Inc. achieved a 15% increase in net revenue, totaling $616 million in Q2 2025.

• Comparable sales grew by 6.5%, with the U.S. market driving a 24% increase in sales, while Canadian sales grew by 6%.

• Aritzia's gross profit margin improved by over 500 basis points, attributed to better-than-forecasted markdown and IMU improvements, alongside savings in warehousing costs and smart spending initiatives.

• Adjusted EBITDA in Q2 was $55 million, a significant increase of 161% from the previous year.

Business Progress:

• Aritzia continues to expand its physical presence with new boutique openings including two in Florida, one in Texas, and plans for further openings in San Diego and the Chicago area.

• Significant improvements and new features were launched on aritzia.com to enhance user experience.

• A mobile app is under development, expected to launch next fiscal year, aiming to drive further online growth and customer engagement.

Opportunities:

• The company's real estate expansion strategy, particularly in the U.S., is a key driver of revenue growth and brand awareness.

• Aritzia's e-commerce channel reported double-digit growth in net revenue, marking a return to robust online sales which are anticipated to continue improving with new digital initiatives.

Risks:

• The Canadian market showed signs of softness as consumer spending faced challenges, impacting the company's performance in Canada.

• Increased freight costs due to logistical challenges have pressured the financials, though they are partially offset by other operational savings.

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