Aritzia (ATZ) Q2 2025 earnings summary

Executive summary

• Net revenue grew 15.3% year-over-year to $615.7 million in Q2 2025, with comparable sales up 6.5%.

• U.S. net revenue surged 23.9% to $345.4 million, now 56.1% of total revenue, driven by new boutiques, e-commerce acceleration, and strong comps; Canadian growth was softer due to a weaker consumer environment.

• Retail net revenue rose 17.6% to $425.6 million, and e-commerce net revenue increased 10.4% to $190.0 million, fueled by U.S. traffic and successful product launches.

• Gross profit margin expanded by 520 basis points to 40.2%, aided by lower markdowns, improved inventory management, and IMU improvements.

• Net income reached $18.2 million, up 404.6% year-over-year, with adjusted net income up 618.5% to $24.5 million.

Financial highlights

• Gross profit increased 32.5% to $247.5 million, with margin gains from lower markdowns and cost savings.

• Adjusted EBITDA was $55.2 million, a 161% increase from last year, representing 9.0% of net revenue, up from 4.0%.

• SG&A expenses rose 16.6% to $199.5 million, mainly due to digital marketing and infrastructure investments.

• Inventory ended at $482.6 million, down 3.7% year-over-year; cash and cash equivalents stood at $104.0 million with no debt drawn.

• Free cash flow was negative at $(5.7) million in Q2 2025.

Outlook and guidance

• Q3 2025 net revenue expected at $675–$700 million, up 3–7% (7–11% excluding one-time factors); gross profit margin to increase by ~400 bps.

• Fiscal 2025 net revenue projected at $2.54–$2.60 billion, up 9–11% (10–13% excluding 53rd week); gross margin to rise ~450 bps.

• Adjusted EBITDA margin for fiscal 2025 expected to increase 400–450 basis points; capital expenditures forecast at ~$230 million.

• Q4 revenue growth expected to accelerate to 15–20%, driven by new store openings.

• 12–13 new boutiques and 3–4 repositions planned for FY2025, mostly in the U.S.