ATZ CN

Aritzia Inc - Ordinary Shares (Subordinate Voting Shares)

Consumer


Presented:03/30/2023
Price:CA$42.54
Cap:$3.80B
Current Price:CA$45.65
Cap:$4.12B

Presented

Date03/30/2023
PriceCA$42.54
Market Cap$3.80B
Ent Value$5.11B
P/E Ratio25.43x
Book ValueCA$5.81
Div Yield0%
Shares O/S111.68M
Ave Daily Vol436,125
Short IntN/A

Current

PriceCA$45.65
Market Cap$4.12B
Aritzia, Inc. engages in the design of apparel and accessories for its collection of fashion brands. Its brands include Wilfred, Babaton, Tna, Wilfred Free, Sunday Best, Le Fou Wilfred, Denim Forum, Little Moon, and The Group by Babaton. It operates through Canada, and United States geographical segments. The company was founded by Brian Hill in 1984 and is headquartered in Vancouver, Canada.

Publicly traded companies mentioned herein: Aritzia Inc (ATZ CN), Fast Retailing Co Ltd (9983 JP), Industria de Diseno Textil SA (ITX SM), Lululemon Athletica Inc (LULU), Nike Inc (NKE), On Holding AG (ONON), Urban Outfitters Inc (URBN)

Highlights

The presenter is long shares of Aritzia Inc (ATZ CN) with an investment thesis centered around US store base expansion for the Canadian women’s fashion brand. ATZ currently has just 46 stores in the US and the presenter thinks there is a sustainable path to opening 8 stores per year. Despite this opportunity, the stock is trading at a low-20x forward earnings multiple on Street expectations, which is well below other growth retailers (NKE, LULU, ONON). The presenter attributes recent trading weakness and the valuation gap to a rise in inventory and troubling credit card data trends, both of which he expects to be resolved in the coming months. Without underwriting multiple expansion, he sees significant upside through the potential to compound EPS at 18% – 25% over the long term, and further notes that the earnings accretion should shine through fairly quickly given its small US presence currently.

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Idea Discussion

Commentor 1 - 2 weeks ago

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