Shares of the women’s clothing company Aritzia (TSX:ATZ) have been one of the top performers on the TSX. Behind its rising share price are its strong fundamentals and ability to consistently deliver solid financials led by a luxury brand that resonates with consumers.
Aritzia delivered a 19% increase in net revenue in fiscal 2025, pushing its five-year compound annual growth rate (CAGR) to 23%. Its compelling mix of high-quality products, new boutique openings, and efficient inventory management drove its top line. Moreover, the company’s digital strategy, including investment in e-commerce infrastructure and brand marketing to acquire new customers, is paying off.
Thanks to the leverage from higher sales, a disciplined approach to spending, reduced warehousing costs, and fewer markdowns, Aritzia delivered a 550 basis point improvement in adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) margin. This has translated into strong bottom-line growth in fiscal 2025. Moreover, its adjusted net income has grown at a CAGR of 19% over the last five years.
All of this has been reflected in the stock’s performance. Aritzia stock has grown at a CAGR of 28% over the last five years, delivering overall capital gains of approximately 244%.
Looking ahead, the company is well-positioned to maintain its momentum. Continued strength in its digital channel, expansion of brand presence in new geographic markets, and sustained consumer demand all point to further upside.
Against this background, let’s take a closer look at where this Canadian stock might be headed over the next five years.
Aritzia’s solid financials to drive its stock higher
This multi-channel retailer’s focus on introducing new styles, optimizing inventory, and growing brand awareness will drive its top and bottom lines at a double-digit rate, supporting its share price.
Aritzia’s aggressive push into the U.S. market continues to pay off. The company opened 12 new boutiques and repositioned three others in fiscal 2025, helping drive a 31% year-over-year increase in U.S. net revenue.
Looking ahead, Aritzia’s solid pipeline of boutique openings for fiscal 2026, with a focus on strengthening its geographic presence across the U.S., will support its growth. It plans to add eight to 10 new boutiques each year in the U.S. through fiscal 2027. This expansion will drive retail sales, boost brand visibility, and, in turn, fuel growth in its e-commerce channel.
Speaking of e-commerce, Aritzia’s launch of an enhanced international website and a customer mobile app will support its growing base of shoppers. At the same time, a ramp-up in digital marketing is expected to further amplify the brand’s reach and online performance.
Aritzia projects its top line to increase at a CAGR of 15-17% through fiscal 2027. Moreover, higher sales, operational efficiency, and smarter sourcing will drive its bottom line, providing a solid tailwind for its stock.
Aritzia stock to more than double in 5 years
Aritzia is likely to deliver double-digit growth in sales and earnings, which will continue pushing its stock price higher. Over the past five years, the stock has grown at a CAGR of 28%. Even if that pace slows to a more modest 18% CAGR, the stock could still reach $149.16 in five years, more than double its June 13th closing price of $65.20.
