VANCOUVER, BC, July 11, 2024 /CNW/ - Aritzia Inc. (TSX:ATZ) ("Aritzia", the "Company", "we" or "our"), a design house with an innovative global platform offering Everyday Luxury online and in its boutiques, today announced its financial results for the first quarter ended June 2, 2024 ("Q1 2025"). "We are pleased with our performance during the first quarter of Fiscal 2025, as we generated an 8% increase in net revenue compared to the first quarter of Fiscal 2024 and delivered positive comparable sales growth in all geographies and all channels. Our top line was fueled by a 13% net revenue increase in the United States, driven by our real estate expansion strategy and growing brand awareness. Throughout the quarter we continued to optimize the composition of our inventory, which drove a sequential acceleration in sales trends each month. As expected, we also delivered meaningful improvement in our Adjusted EBITDA margin," said Jennifer Wong, Chief Executive Officer. "As we navigate a dynamic consumer environment, we're encouraged by the positive response to both our new styles and client favourites. Our new boutiques continue to perform ahead of expectations, and we are particularly excited about the extraordinary pipeline of boutique openings this year, representing 50% square footage growth in the United States. We expect further improvement in our eCommerce business driven by product optimization and strategic investments. We are confident that our real estate expansion strategy, digital initiatives, and growing brand awareness in the United States will enable us to deliver consistent, profitable growth for years to come," concluded Ms. Wong. First Quarter Highlights For Q1 2025, compared to Q1 20241: Net revenue increased 7.8% to $498.6 million, with comparable sales2 growth of 2.0% United States net revenue increased 13.0% to $284.7 million, comprising 57.1% of net revenue Retail net revenue increased 9.2% to $357.8 million eCommerce net revenue increased 4.2% to $140.8 million, comprising 28.2% of net revenue Gross profit margin2 increased 510 bps to 44.0% from 38.9% Selling, general and administrative expenses as a percentage of net revenue increased 220 bps to 35.4% from 33.2% Adjusted EBITDA2 increased 70.6% to $53.9 million Net income decreased 9.4% to $15.8 million. Last year included a non-recurring gain of $15.0 million relating to the Company's acquisition of Reigning Champ. Net income per diluted share was $0.14 per share, compared to $0.15 per share in Q1 2024 Adjusted Net Income2 increased 122.7% to $25.0 million. Adjusted Net Income per Diluted Share2 was $0.22 per share, compared to $0.10 per share in Q1 2024 __________ 1 All references in this press release to "Q1 2025" are to our 13-week period ended June 2, 2024, to "Q1 2024" are to our 13-week period ended May 28, 2023, to "Fiscal 2023" are to our 52-week period ended February 26, 2023, to "Fiscal 2024" are to our 53-week period ended March 3, 2024, to "Fiscal 2025" are to our 52-week period ending March 2, 2025, to "Fiscal 2026" are to our 52-week period ending March 1, 2026, and to "Fiscal 2027" are to our 52-week period ending February 28, 2027. 2 Certain metrics, including those expressed on an adjusted or comparable basis, are non-IFRS measures or supplementary financial measures. See "Comparable Sales, "Non-IFRS Measures and Retail Industry Metrics" and "Selected Financial Information". First Quarter Results Compared to Q1 2024 (Unaudited, in thousands of Canadian dollars, unless otherwise noted) Q1 2025 Q1 2024 Change % of net revenue % of net revenue % % pts Retail net revenue $        357,843 71.8 % $        327,570 70.8 % 9.2 % eCommerce net revenue 140,787 28.2 % 135,095 29.2 % 4.2 % Net revenue $        498,630 100.0 % $        462,665 100.0 % 7.8 % Gross profit $        219,544 44.0 % $        179,951 38.9 % 22.0 % 5.1 % Selling, general and administrative ("SG&A") $        176,290 35.4 % $        153,459 33.2 % 14.9 % 2.2 % Net income $          15,833 3.2 % $          17,470 3.8 % (9.4) % (0.6) % Net income per diluted share $              0.14 $              0.15 (6.7) % Adjusted EBITDA2 $          53,877 10.8 % $          31,588 6.8 % 70.6 % 4.0 % Adjusted Net Income2 $          24,988 5.0 % $          11,218 2.4 % 122.7 % 2.6 % Adjusted Net Income per Diluted Share2 $              0.22 $              0.10 120.0 % Net revenue increased by 7.8% to $498.6 million, compared to $462.7 million in Q1 2024. Comparable sales2 growth was 2.0%, as all channels and all geographies comped positively. Trends accelerated sequentially in each month of the quarter as the Company continued to optimize its inventory position. In the United States, net revenue increased by 13.0% to $284.7 million, compared to $251.9 million in Q1 2024. This was primarily driven by the Company's real estate expansion strategy and growing brand awareness. Net revenue in Canada increased by 1.5% to $214.0 million, compared to $210.8 million in Q1 2024. Retail net revenue increased by 9.2% to $357.8 million, compared to $327.6 million in Q1 2024. The increase was driven by strong performance of the Company's new and repositioned boutiques, which continue to generate better-than-expected results, as well as positive comparable sales growth in its boutiques. In the last 12 months, the Company opened 5 new boutiques and repositioned 4 boutiques. Boutique count3 at the end of Q1 2025 totaled 119 compared to 115 boutiques at the end of Q1 2024. eCommerce net revenue increased by 4.2% to $140.8 million, compared to $135.1 million in Q1 2024. While eCommerce was impacted by a lower volume of markdown sales, trends accelerated as the quarter progressed due to the Company's improving inventory position. Gross profit increased by 22.0% to $219.5 million, compared to $180.0 million in Q1 2024. Gross profit margin2 was 44.0%, compared to 38.9% in Q1 2024. The increase in gross profit margin of approximately 510 bps was primarily driven by lower markdowns, IMU improvements, lower warehousing costs and savings from the Company's smart spending initiative, partially offset by pre-opening lease amortization costs for flagship boutiques. SG&A expenses increased by 14.9% to $176.3 million, compared to $153.5 million in Q1 2024. SG&A expenses were 35.4% of net revenue, compared to 33.2% in Q1 2024. The increase in SG&A expenses was driven by investments in digital marketing to protect and propel the Aritzia brand, infrastructure projects, and technology initiatives to support the Company's growth. Net income was $15.8 million, a decrease of 9.4% compared to $17.5 million in Q1 2024. Last year included a non-recurring gain of $15.0 million relating to the Company's acquisition of Reigning Champ. Net income per diluted share was $0.14 per share, a decrease of 6.7% compared to $0.15 per share in Q1 2024. Adjusted EBITDA2 was $53.9 million or 10.8% of net revenue2, an increase of 70.6% compared to $31.6 million or 6.8% of net revenue1 in Q1 2024. Adjusted Net Income2 was $25.0 million, an increase of 122.7% compared to $11.2 million in Q1 2024. Adjusted Net Income per Diluted Share2 was $0.22 per share, an increase of 120.0% compared to $0.10 per share in Q1 2024. Cash and cash equivalents at the end of Q1 2025 totaled $100.7 million compared to $58.8 million at the end of Q1 2024. Inventory at the end of Q1 2025 was $396.8 million, a decrease of 18.2% compared to $485.0 million at the end of Q1 2024. Capital cash expenditures (net of proceeds from lease incentives)2 were $55.6 million in Q1 2025, compared to $26.5 million in Q1 2024. The increase is primarily due to capital investments in new and repositioned boutiques. __________ 3 There were four Reigning Champ boutiques as at June 2, 2024 and May 28, 2023 which are excluded from the boutique count. There was one Aritzia boutique closure in Fiscal 2024. Outlook Based on quarter-to-date trends, Aritzia expects net revenue in the range of $570 million to $590 million in the second quarter of Fiscal 2025, representing growth of approximately 7% to 10%. The Company expects gross profit margin to increase approximately 450 bps and SG&A as a percentage of net revenue to increase approximately 100 to 150 bps for the second quarter of Fiscal 2025 compared to the second quarter of Fiscal 2024. Aritzia continues to expect the following for Fiscal 2025: Net revenue in the range of $2.52 billion to $2.62 billion, representing growth of approximately 8% to 12% from Fiscal 2024 (excluding the 53rd week in Fiscal 2024, this represents growth of approximately 10% to 14%). This includes the contribution from retail expansion with 11 to 13 new boutiques and 3 to 4 boutique repositions. Other than one new boutique and one boutique reposition in Canada, all openings are expected to be in the United States. One new boutique and one boutique reposition have already opened year-to-date. Gross profit margin to increase by approximately 400 to 450 bps compared to Fiscal 2024, reflecting IMU improvements, lower warehousing costs, lower markdowns and savings from the Company's smart spending initiative. SG&A as a percentage of net revenue to be approximately flat to down 50 bps compared to Fiscal 2024, driven by savings from the Company's smart spending initiative and leverage on fixed costs, offset by investments in digital marketing. Adjusted EBITDA as a percentage of net revenue to increase by approximately 400 to 500 bps. Capital cash expenditures (net of proceeds from lease incentives)2 of approximately $230 million. This includes approximately $190 million related to investments in new and repositioned boutiques expected to open in Fiscal 2025 and Fiscal 2026, as well as $40 million primarily related to the Company's distribution centre network and technology investments. Depreciation and amortization of approximately $80 million. 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. This outlook is intended to provide readers management's projections for the Company as of the date of this press release. Readers are cautioned that actual results may vary materially from this outlook and that the information in the outlook may not be appropriate for other purposes. See also the "Forward-Looking Information" section of this press release and the "Forward-Looking Information" and "Risk Factors" sections of our Management's Discussion & Analysis for the first quarter of Fiscal  2025 dated July 11, 2024 (the "Q1 2025 MD&A"), for Fiscal 2024 dated May 2, 2024 (the "Fiscal 2024 MD&A") and the Company's annual information form for Fiscal 2024 dated May 2, 2024 (the "Fiscal 2024 AIF"). In addition, a discussion of the Company's long-term financial plan is contained in the Company's press release dated October 27, 2022, "Aritzia Presents its Fiscal 2027 Strategic and Financial Plan, Powering Stronger". This press release is available on the System for Electronic Data Analysis and Retrieval + ("SEDAR+") at www.sedarplus.com and on our website at investors.aritzia.com. Normal Course Issuer Bid On January 18, 2024, the Company announced that the Toronto Stock Exchange ("TSX") had accepted its notice of intention to proceed with an NCIB ("2024 NCIB") to repurchase and cancel up to 3,515,740 of its subordinate voting shares, representing approximately 5% of the public float of 70,314,808 subordinate ...