Aritzia (TSX: ATZ) stock is making some serious waves this year. The designer apparel maker’s stock is up more than 60% year to date, and it doesn’t seem to be slowing down. So, what’s fueling its impressive run? Let’s dig into why Aritzia is capturing so much attention from growth-oriented investors right now.
Source: Getty Images
Aritzia stock’s growth spree is hard to ignore
Aritzia is accelerating its revenue and earnings growth in 2025. In its most recent quarter, the company posted net revenue of $663 million, a whopping 33% increase compared to the same period last year. Retail store sales grew 34%, and e-commerce sales were up 30%. Perhaps most impressive was the 19% jump in comparable sales, a key retail metric that measures sales at stores open for at least a year. This kind of balanced, broad-based growth is an impressive sign of strong brand health and stellar execution.
A huge part of Aritzia’s growth story is unfolding south of the border. Revenue in the United States soared 45% year over year, now making up the lion’s share of total sales. This is being driven by a disciplined yet aggressive boutique expansion strategy. Over the past year, Aritzia has increased its total retail square footage by 25%, opening new locations and repositioning existing ones in prime markets. These new stores are driving foot traffic, building brand awareness, and creating a halo effect that boosts online sales.
Aritzia’s active client base in the U.S. grew by approximately 40% during the most recent quarter. The company’s strategy to become a household name in American fashion is working to investors’ delight.
Navigating tariffs with agility
One of the biggest overhangs that appeared on Aritzia stock recently has been the concern over U.S. tariffs on imported goods. Earlier this year, the fear was that tariffs as high as 145% on some Chinese imports would crush profit margins. But here’s where Aritzia’s management has shown impressive agility. The company moved quickly to diversify its supply chain away from China, and those efforts are already paying off. Sourcing from China is now expected to be in the mid-single digits by spring 2026, down significantly from previous levels.
Furthermore, the tariff landscape itself has improved. The U.S. government reduced tariffs on Chinese goods from 145% to 30%, which led Aritzia to significantly improve its profit outlook. While tariffs are still expected to reduce full-year gross margin by about 150 basis points (or 1.5%), that’s a far cry from the 400 basis points initially feared.
Aritzia has shown a commendable ability to adapt under pressure without derailing its growth story.
Valuation: Growth at a reasonable price?
With all this positive price growth momentum, it’s natural for Canadian investors to ask: Is Aritzia stock too expensive? On the surface, a historical price-to-earnings (P/E) ratio above 40 certainly looks steep compared to the apparel industry average of around 25. However, valuation is often a story about the future, not the past.
The company’s earnings per share have nearly tripled over the past year, and analysts are optimistic about the path ahead. Aritzia guides for adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization – a useful measure of core profitability) margins to reach between 15.5% and 16.5% this financial year, up from 9.3% in Financial Year 2024.
Even more compelling is Aritzia’s confidence in achieving a 19% EBITDA margin by fiscal 2027. This margin expansion, combined with continued revenue growth from new boutiques and vibrant digital channels, suggests the company’s scaling is far from done.
While Aritzia stock isn’t cheap, many growth investors are right to believe it’s still priced for further upside, especially if the company continues to execute on its ambitious U.S. and digital growth plans.
