Stock-market dips have an irritating habit of looking obvious only after they’re over. When shares are falling, another 10% drop feels inevitable. Once they rebound, suddenly everyone wishes they’d been brave enough to buy.
That’s why waiting for the “real” correction can backfire. Imagine a stock falls from $175 to $137, roughly a 22% decline. You decide to wait for $120. Instead, earnings grow, sentiment improves, and the shares climb back to $160. The next 10% pullback would take them to $144. Still higher than the price you originally refused to pay.
A future dip can be deeper in percentage terms yet leave you buying at a higher price. That doesn’t mean investors should chase every falling stock. During a stock market correction, I’d focus on whether the business has deteriorated along with its share price. If earnings, margins and growth expectations are improving, waiting for maximum pessimism can become its own risk.
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ATZ
Aritzia (TSX: ATZ) designs and sells women’s apparel through its boutiques and digital channels. Canada built the brand, but the United States is increasingly building the growth story. Shares recently traded around $137 compared with a 52-week high of $174.52. That leaves the stock roughly 21% below its high despite one of its strongest operating quarters yet.
First-quarter fiscal 2027 revenue surged 43.4% to $951 million. Comparable sales, which measure performance from established stores and digital channels, climbed 35.1%. The U.S. numbers were even harder to ignore. American revenue jumped 54.5% to $638 million and now accounts for roughly two-thirds of total sales. Aritzia opened 14 new boutiques over the previous 12 months, but existing locations and digital sales are growing too. Digital revenue climbed 55.5%.
Furthermore, Aritzia’s adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) rose 80.5% last quarter to $191.6 million, while adjusted earnings per share (EPS) nearly doubled from $0.49 to $0.96. The clothing retailer’s adjusted EBITDA margin expanded from 16% to 20.1%.
Looking ahead
Management also increased its fiscal 2027 revenue outlook to between $4.55 billion and $4.75 billion, representing 23% to 28% growth. Another 12 to 13 boutiques are planned, with almost all of the new locations expected in the United States.
That U.S. runway is why I wouldn’t get too clever waiting for another monster selloff. Here’s what today’s discount looks like if shares eventually revisit their recent high.
| ATZ SCENARIO | AMOUNT |
|---|---|
| Recent share price | $137.31 |
| 52-week high | $174.52 |
| Decline from high | 21.3% |
| Shares bought with $1,000 | 7 |
| Actual investment | $961.17 |
| Value at previous high | $1,221.64 |
| Potential increase | $260.47 |
That return certainly isn’t guaranteed. It simply shows why buying stocks in Canada during an existing pullback can make more sense than demanding an even cheaper one. Furthermore, there’s a reason I’m calling Aritzia stock a dip rather than a bargain-basement stock.
At roughly 36 times trailing earnings, the valuation still expects plenty of growth. Fashion is famously unforgiving, and one bad product cycle could quickly slow those impressive comparable sales. Tariffs and changing U.S. trade rules could also pressure margins.
Foolish takeaway
Aritzia therefore needs to execute. Investors are paying for more U.S. boutiques, rising digital sales, and continued margin expansion. So yes, the next market dip could send Aritzia lower. I wouldn’t pretend to know whether $137 marks the bottom.
What I do know is that revenue just grew 43%, adjusted earnings per share nearly doubled, and management raised its annual outlook. When the business keeps moving forward that quickly, I’d rather buy part of an existing 21% dip than spend the next year hoping the market eventually offers me a bigger one.
