ATZ Swings to a Q2 Loss Warns of Lower Margins, Higher Costs2023-09-28 04:18:50 PM ET (MT Newswires)
04:18 PM EDT, 09/28/2023 (MT Newswires) -- Aritzia (ATZ.TO) on Thursday said it swung to a loss in its fiscal second quarter despite higher sales even as it warned of lower margins and higher costs in its outlook for the fiscal third quarter.
The clothing retailer said it lost C$5.99 million, or C$0.05 per share, in the quarter ended Aug.28, compared with a profit of C$46.26 million, or C$0.40, in the year-prior period.
Adjusted profit per share, which excludes most one-time items, was C$0.03, well ahead of the consensus analyst estimate for an adjusted loss per share of C$0.04, according to Capital IQ.
Revenue rose 1.7% to C$534.19 million from C$525.52 million.
The company said the loss came as it was "impacted by missed opportunities in the level of new styles in our product assortment as well as a mixed consumer environment".
"While our quarterly results do not meet our high standards, our performance was better than anticipated, and we made significant progress in executing against our Fiscal 2024 priorities," chief executive Jennifer Wong said in a release.
The company said it is having better results for the fall season. Wong said "Our new styles for Fall are resonating well with our clients, and we expect our assortment to be in a strong position for Spring/Summer 2024."
Aritizia expects fiscal third-quarter sales to flat or slightly below the year-prior quarter and expected profit margins to drop by 200 basis points, with expenses as a percent of revenue rising by 300 basis points. Still, the company expects fiscal 2024 revenue of around C$2.3 billion, up to 7% above the 2023 fiscal year, though gross profit margins will be around 300 basis points lower.