Canada’s inflation rate climbed to 2.4% in March, up sharply from 1.8% in February, driven by surging energy prices and persistent food cost pressures. So investors who had been hoping the Bank of Canada would resume cutting interest rates should probably turn their attention to stocks that can hold up and keep compounding even if that rate cut doesn’t come for a while.
The consumer backdrop adds another layer of complexity. New transaction data from Moneris shows total Canadian spending in the first quarter of 2026 barely moved year over year, even as most consumers shifted spending toward necessities and away from discretionary items. Nearly half of Canadians believe the economy is struggling, and 43% say they plan to cut back on non-essential spending. That is a cautious but not collapsing picture — and it matters for how you pick stocks right now.
In this environment, these two stocks are worth a close look.
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Aritzia
Aritzia (TSX: ATZ) sells premium women’s apparel across Canada and the United States, and it has turned itself into one of the more compelling North American growth stories on the TSX. Higher-income consumers are still spending but have started trading down in some categories, and Aritzia’s customer base skews toward exactly the demographic that is still opening their wallets.
The bull case for investing in Aritzia does not depend on a rate cut or an inflation cooldown. It depends on brand strength, U.S. expansion, and the kind of loyal customer base that keeps spending even when budgets tighten elsewhere.
The company’s latest results were strong. In fiscal Q3 2026, Aritzia reported record quarterly net revenue of $1.04 billion, up 42.8% year over year, while comparable sales jumped 34%. For the first three quarters of fiscal 2026, net revenue rose to $2.52 billion from $1.84 billion a year earlier. E-commerce was a standout, with Q3 online revenue climbing 58% to $383 million, driven by the successful launch of the company’s mobile app and strong digital marketing. U.S. net revenue rose 54% in Q3, underscoring how much of Aritzia’s growth engine now sits south of the border.
Management followed strong results with a raised outlook. Full-year fiscal 2026 net revenue guidance was lifted to a range of $3.62 billion to $3.64 billion, representing 33% growth over fiscal 2025, supported by 13 new boutiques and four repositions. Adjusted EBITDA margin guidance was raised to a range of 16.5% to 17%, though management noted that excluding tariff and de-minimis headwinds, margins would have exceeded the prior 19% target. That tariff drag — roughly 400 basis points in Q4 — is the clearest risk on the horizon. If U.S. trade policy shifts further or the de-minimis exemption tightens more than expected, Aritzia’s margin recovery could slow.
Valuation is another other risk: At a market cap around $16 billion and a trailing P/E near 48, you’re paying for growth. Q4 fiscal 2026 results are due May 7, and those numbers will either validate the premium or put it under pressure. For Canadian investors interested in growth stocks, Aritzia is one of the few TSX choices with U.S. expansion, digital momentum, and brand equity all working at the same time.
National Bank
National Bank (TSX: NA) serves personal and commercial clients, wealth customers, capital markets, and specialty finance operations — a broader earnings base than many investors assume. Over the past year, the biggest story was the Canadian Western Bank acquisition, which deepened its footprint in Western Canada and added meaningful scale. That deal is now contributing ahead of expectations.
In fiscal Q1 2026, National Bank posted net income of $1.25 billion, up from $997 million a year earlier, as total revenue rose to $3.89 billion from $3.18 billion. Adjusted EPS of $3.25 beat analyst expectations of $2.98 by more than 9%, and the strong results drove a 6.6% surge in the stock price. CWB integration came in ahead of plan, with $176 million in cost and funding synergies realized against a year-one target of $135 million, and management remains on track for $270 million by end of fiscal 2026.
The forward guidance upgrade matters too. Management now expects 2026 EPS growth at the top end of its prior 5% to 10% range and raised its full-year ROE target to approximately 16%. For a bank that has just absorbed a major acquisition and is still hitting its synergy targets ahead of schedule, that is a confident signal.
The risks are real and worth naming clearly. Canadian bank earnings forecasts industry-wide have been trimmed roughly 7% in response to tariff-driven uncertainty and softer credit conditions. If trade tensions escalate and growth slows more than expected, credit quality and loan demand could weaken — and National Bank, with its Quebec concentration and capital markets exposure, would not be immune. But with provisions for credit losses easing in Q1 and a CET1 ratio of 13.7%, the balance sheet looks well-positioned to absorb a rougher patch if it comes.
For a Canadian investor looking for a bank stock with income, earnings momentum, and a stronger regional footprint than it had a year ago, National Bank is a more interesting choice than it might appear on the surface.
Bottom line
Canada’s inflation rate just moved higher, consumers are cautious, and the future of the broader economy is genuinely uncertain. Aritzia and National Bank are very different businesses, but they share one quality that matters right now: neither depends on a single macro scenario to keep delivering. One is compounding through brand strength and U.S. expansion; the other is integrating a major acquisition ahead of schedule while raising its own earnings outlook. For Canadians who wants growth and income without betting their savings on an interest rate call, that combination is worth owning.
