Aritiza (TSX:ATZ) stock just seems to keep doing better and better. The retailer has exploded since seeing major expansion in the United States, and shares keep reflecting that. As of writing, shares of Aritzia stock are up a whopping 57% year to date, and 70% in the last year! Now, with earnings on the way on Oct. 9, should investors buy in before another boom?
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Looking back
Before we get into what to expect, let’s take a quick look back at what happened during the first quarter of 2026 for Aritzia stock. During the quarter, the retail stock reported a 33% increase in net revenue and comparable sales up 19.3% year over year. What’s more, profitability improved materially, with gross margins up to 47.2%.
Now, the company is in an incredibly strong position, with cash of $292.6 million, more than double last year, and inventory at $409.5 million. Meanwhile, debt is at $906.5 million, with debt-to-equity (D/E) at a reasonable 80% and cash flow coming in at $543.6 million. So, what can investors look forward to for the second quarter?
Q2 coming in
First, let’s look at what management expects for the second quarter of 2026. During the first quarter, management increased guidance to hit revenue between $730 and $750 million. This would be a 19% to 22% increase year over year, with full-year revenue expected between $3.1 and $3.25 billion. Meanwhile, Aritzia stock increased its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) margin to between 15.5% and 16.5%.
The optimistic outlook comes from strong results coupled with its U.S. expansion results. The margin gains have fuelled investor enthusiasm that doesn’t seem to be going anywhere. And this has been seen through that large increase of up to 70% in the last year! So, is it a buy?
Considerations
Here’s where we have to dig into value. While the company has shown incredible results, there’s always the potential of a drop in share price from even slightly missing earnings estimates. And right now, the company isn’t exactly undervalued. Aritzia stock currently trades at 34 times earnings, 3.5 times sales, and 8.8 times book value. None of these numbers screams “value.”
What’s more, Aritzia stock doesn’t offer a dividend. It does, however, offer returns to shareholders through buybacks. This has been approved for up to 5% of its float. However, to date, there have only been modest repurchases of about 15,200 shares in the first quarter.
Bottom line
All in all, investors buying Aritzia stock today expect either earnings that meet or ideally beat estimates. And right now, that does look likely with further store openings and expansion across the United States. However, it also meets and beats those needs to keep coming quarter after quarter if investors want those share prices to keep soaring upwards. What investors will need to keep watching are the tariff and trade risks associated with Aritzia stock. This has already been flagged by management. Furthermore, any missteps in expansions and ecommerce growth could seriously hurt the stock. And buybacks aren’t exactly huge. For now, I’d wait until earnings come out before buying Aritzia stock, as value just isn’t there at this stage.
