Aritzia Inc "Momentum Intact; Raise PT and Reiterate Buy Rating" (Buy) Serna

研报英文原文证据摘录

Aritzia Inc "Momentum Intact; Raise PT and Reiterate Buy Rating" (Buy) Serna

Aritzia Inc UBS Research

Upside/Downside Spectrum

Upside/Downside SpectrumPlease

ATZ is trading at C

$148.98 as of July 9th,

Pleaserefe r to the nar rative of th is re port

for an expl anati on of t his ima ge/ch art

Source: UBS Estimates

UPSIDE (C$304): Our upside scenario assumes a 31% 5-yr. EPS CAGR (FY26-31E).

Aritzia continues taking share across Specialty Retail and these gains accelerate as more

distressed competitors exit the industry. The company drives incremental revenue growth

by stepping up investments in the men's category and begins expanding into markets

outside North America. A combination of stronger than expected comp sales growth,

new retail locations with attractive economics, and lower than anticipated markdowns

leads to a faster operating margin expansion. ATZ begins to incrementally deploy excess

FCF generation into buybacks. Our upside case implies 18% annual revenue growth,170

bps operating margin expansion, and 1.5% share count reduction. ATZ's P/E expands to

~33x given a stronger EPS growth algorithm.

BASE (C$216): We forecast a 26% 5-yr. EPS CAGR (FY26-31E). We believe ATZ's

investments in differentiated concepts within its boutiques, attractive real estate

locations, diversified product assortment, and high-level customer service should lead to

sustained MSD% comp sales growth. We model ongoing operating margin rebound to

23.6% by FY31E from 12.5% in FY25. This expansion reflects SG&A efficiencies, cost

savings initiatives, and fixed cost leverage, which should jointly more than offset near-

term tariffs headwinds. We anticipate Aritzia to partly reinvest strong FCF generation

back into its business while returning some of this excess cash flow to shareholders via