Aritzia (TSX:ATZ) has been one of the best-performing stocks on the TSX in the past couple of years. In 2024, this stock rose 97%. In 2025, Aritzia stock soared 118%! Its stock is up 426% in the past five years.
No doubt, this company has been an incredible performer for shareholders. However, it hasn’t been without volatility. Between 2022 and 2023, the company had a 60% drawdown as it worked through excess inventory, elevated capital expenses, and weakened margins. It recovered all those losses and then some in 2024.
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Why I regret not buying Aritzia stock during drawdowns
In March 2025, the stock dropped as much as 42% after the Trump administration announced sweeping tariffs, including against Canada. Investors worried that this would have an outsized impact on Aritzia’s suppliers and its fledgling U.S. business.
Fortunately, the company managed both the 2022/2023 challenges and the 2025 tariff concerns with exceptional diligence. Not only did the company survive these situations, but it has found a way to come out on top both times.
If I had bought at its 2023 low on November 3, I would be up 458% today. If I had bought Aritzia stock at its April 13th low in 2025, I would be up 207%! Buying this stock when the market hates it has turned out to be an excellent decision every time it has dropped.
Why is Aritzia stock charging higher?
So, investors need to ask what has propelled Aritzia to such significant gains in recent years. It starts with its significant expansion into the United States. Aritzia has established several important flagship stores in key markets. Likewise, its U.S. store count now exceeds its Canada footprint with 71 stores versus 68.
In its most recent third quarter of fiscal 2026, Aritzia delivered exceptional results. Its brand of “everyday luxury” clothing is resonating with consumers. A recent app launch is seeing traction even internationally, where the company has done very little work to expand its appeal.
For the quarter, net revenues rose 43% to $1.04 billion. E-commerce made 38% of those sales with a 58% sales increase. Adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) rose 52% to $207 million. Adjusted EBITDA margin increased 120 basis points to 20%!
The company is generating considerable cash every quarter. Its balance sheet is sitting with $620 million in cash. Aritzia has ample firepower to continue to expand its store count across the U.S. While it only has 71 boutiques today, it could easily grow that to 200 over the next several years.
Management continues to target 12-15 new boutiques per annum, but it could afford to accelerate that expansion pace. This is all before calculating potential international expansion into the equation. That could open another substantial market that has hardly been touched yet.
The Foolish takeaway
Now, all these growth expectations come at a price. Aritzia is trading near its highest valuation in the past five years. The best times to buy this stock have been to add it on dips. However, if it continues its strong execution, there may not be major dips for some time.
While my biggest regret wasn’t buying Aritzia stock on the recent downturns, I won’t be making that mistake again. Great companies with strong growth ahead (like Aritzia) don’t come along often. Buying and holding a quality value creator like this seems like a great long-term strategy.
