As part of its retail expansion plan, Aritzia intends to open eight new boutiques, of which one has already launched in Q1 FY24, and expand or reposition four existing ones, all located in the US. Most of the new boutiques, six out of eight, are scheduled to open in the second half of the fiscal year, with three expected to commence operations in the last month of the fiscal period, the company said in its Q1 FY24 financial results.
However, the company forecasts a drop in gross profit margin by around 300 basis points (bps) compared to FY23. Similarly, selling, general, and administrative expenses as a percentage of net revenue are projected to increase by approximately 300 bps compared to the previous fiscal year.
Canadian fashion brand Aritzia projects FY24 net revenue between $2.25-$2.35 billion, marking a 2-7 per cent increase from FY23, driven by new boutique launches and expanded product assortment.
However, the company’s gross profit margin is expected to decrease by 300 bps.
The firm plans to invest $220 million in capital cash expenditures.
In terms of capital expenditure, Aritzia anticipates spending about $220 million in FY24. This includes an estimated $120 million earmarked for new, repositioned, and expanded boutiques set to open in FY24 and FY25, along with approximately $100 million primarily dedicated to the expansion of distribution centres and support offices.
“While we are seeing a more challenging consumer environment to start the second quarter and have identified opportunities in the level of newness in our product assortment, we remain disciplined in making further progress against our fiscal 2024 priorities. These priorities include continuing to advance the strategic levers that we expect to fuel our future growth, scaling our infrastructure to match our recent, unprecedented growth, rightsizing our inventory position, and optimising economies of scale across the business. This will help ensure we are well positioned to deliver sustainable, profitable growth and create meaningful value for our shareholders,” said Jennifer Wong, chief executive officer.
Fibre2Fashion News Desk (DP)
