Aritzia (TSX: ATZ) has been one of my favourite high-growth retail plays in the Canadian market. With the firm looking to level up its growth in the U.S. market, I’m inclined to view the name as one of the best momentum plays to pick up as we head into the new year.
Undoubtedly, Aritzia is just getting started with its foray into the U.S. market, but its early success through a tariff-challenged climate, I believe, is a testament to the durability of the firm’s international growth story. Indeed, things could certainly change at a dime if a bear market hits in 2026. However, even at close to fresh all-time highs, I’d be inclined to stay the course or even add to a position, given the sheer momentum riding behind the business going into the final quarter of the year.
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The case for more strength in ATZ stock in 2026
Of course, investors should pay careful attention to the valuation, especially after a melt-up rally that’s driven traditional valuation metrics to stunning heights. The higher a stock’s price gains in any given year, the higher the stakes and the higher expectations will be going into quarterly earnings releases.
Though 2025’s standout could be followed by a correction year (as is the case with overbought, overhyped stocks once they run themselves off the so-called “expectations treadmill”), I do think that Aritzia’s management team has what it takes to continue executing on the growth story, even if consumers become even more pressured going into 2026.
Of course, the future is hard to tell. Either way, I believe Artizia has all the makings of a genuinely excellent business that’s more than able to justify its now-hefty 39.4 times trailing price-to-earnings (P/E) multiple. On a forward-looking basis, shares of ATZ look far more palatable at just north of 30 times forward P/E. The next big question for investors is whether the company can make a bigger dent in the world of U.S. fashion.
It’s not so easy to take ample market share from U.S. rivals, given the strength of their fashionable brands and how quickly the world of fashion can change in just a single week! Thank social media for that!
In any case, when UBS says things like Aritizia has “significant” opportunity to expand into America (a bullish point I’ve pounded the table on in prior pieces), I can’t help but be enthused about the growth to come from a retailer that hasn’t been afraid to explore new ideas to boost sales.
Aritzia’s expansion is just getting started
Aritzia is opening new shops left and right, and I think there’s room for an acceleration to its expansion plan, especially if the numbers continue to impress. And I think there will continue to be hits as new fashions continue resonating with consumers.
Add the attached A-OK café at specific locations, and I do think the firm is a mastermind at getting customers through their doors, even those who have no intention of buying anything. Indeed, the temptation to check out what’s new in-store at Aritizia after grabbing a quick A-OK brew is too strong.
Either way, Aritizia deserves an A-grade for how it has engaged with customers. While a recession would probably weigh quite heavily on Aritzia and the apparel scene as a whole, I do think Aritzia is a durable Canadian growth story that’s not about to end anytime soon. There are, indeed, many things to like about this $9 billion fast grower. For this reason, it’s my top pick in Canadian retail for 2026.
