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Jan 13, 2022

'No intention' of raising prices despite rising costs: Aritzia CEO

We are not planning on increasing prices amid inflation: Aritzia CEO


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The chief executive officer of Aritzia Inc. said the company doesn't plan to raise its prices - despite rising costs, shipping challenges and health concerns.

In an interview with BNN Bloomberg on Thursday, Brian Hill said Aritzia has "worked really hard" to manage its supply chain so that it doesn't have to raise prices at its clothing stores.

Hill said the Vancouver-based retailer is "doing a way better job" at managing its promotions and markdowns, and is also benefitting from receiving an increasing share of its revenue in U.S. dollars.

As a result, Aritzia has been able to preserve its profit margins, Hill said.

"We've managed to maintain and even grow our margins slightly in the face of inflation," Hill said, pointing to rising raw material costs, as well as higher logistics expenses.

On Wednesday, Aritzia reported a profit of $64.9 million for the three months ended Nov. 28, with all stores being open for the first time since the start of the pandemic. That compared with $30.5 million in net earnings in the prior year.

Revenues rose 63 per cent to $453.3 million from $278.3 million as retail revenues increased 72 per cent while e-commerce sales rose 47 per cent from the third quarter of 2021.

Hill said Aritzia's business has been "exceptionally strong” in recent months.

“It seems all our channels are working - retail in Canada and the U.S. has been beyond our expectations,” he said.

Hill also noted the company's e-commerce business has continued to grow, which he called "surprising,” since customers had the option of shopping in-store for the entire quarter. 

In a report, Irene Nattel of RBC Capital Markets said the company’s reinstatement of its share purchase program is a sign of its strong performance. Aritzia plans to repurchase up to 3.7 million shares or five per cent of outstanding shares.

“Performance of Aritzia prior to, during and through yet another wave of COVID reinforces our views around the strength, sustainability and upside potential of the company’s unique business mode,” Nattel wrote.

Last month, Nattel raised her price target for Aritzia to $52 per share from $44. On Wednesday, she raised her price target for the company to $60 per share.

Shares of the company climbed about 20 per cent at the start of the trading day on Thursday, reaching $59.

With files from The Canadian Press