Undoubtedly, this company has delivered an incredible performance for shareholders. However, it has not been without volatility. Between 2022 and 2023, the company suffered a 60% credit loss as it faced excess inventory, higher capital expenditures and weakened margins. It has recovered all these losses, and several more in 2024.
Why I regret not buying Aritzia shares during the drawdowns
In March 2025, the stock fell as much as 42% after the Trump administration announced sweeping tariffs, including against Canada. Investors feared this would have an outsized impact on Aritzia’s suppliers and its fledgling US operations.
Fortunately, the company has addressed both the 2022/2023 challenges and the 2025 tariff issues with exceptional care. The company has not only survived these situations, but also found a way to come out on top both times.
If I had bought at the 2023 low on November 3, I would be up 458% today. If I had bought Aritzia stock at the April 13, 2025 low, I would have been up 207%! Buying this stock when the market hates it has proven to be an excellent decision every time it falls.
Why are Aritzia shares being charged higher?
So investors should be wondering what has driven Aritzia to such significant gains in recent years. It starts with the significant expansion into the United States. Aritzia has established several major flagship stores in key markets. Similarly, the number of stores in the US now exceeds the footprint in Canada with 71 stores versus 68.
In the most recent third quarter of fiscal 2026, Aritzia delivered exceptional results. The brand of ‘everyday luxury’ clothing resonates with consumers. A recent app launch even sees international territory, where the company has done very little work to expand its appeal.
For the quarter, net sales rose 43% to $1.04 billion. E-commerce generated 38% of that turnover, with a turnover increase of 58%. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) rose 52% to $207 million. The adjusted EBITDA margin increased by 120 basis points to 20%!
The company generates significant cash every quarter. The balance sheet shows $620 million in cash. Aritzia has sufficient firepower to further expand the number of stores in the US. While it currently only has 71 boutiques, it could easily expand that to 200 in the coming years.
Management continues to target 12 to 15 new boutiques per year, but could afford to accelerate that pace of expansion. This is all before potential international expansion is factored into the equation. That could open up a new substantial market that has barely been entered.
The silly takeaway
Now all these growth expectations come at a price. Aritzia is trading near its highest valuation in the past five years. The best times to buy this stock were to add during dips. However, if the price continues strongly, there may not be any major dips for a while.
While my biggest regret is not buying Aritzia stock during the recent recessions, I won’t make that mistake again. Large companies with strong growth prospects (such as Aritzia) do not often come along. Buying and holding such a quality creator seems like a great long-term strategy.
#biggest #investment #regret #buying #stock