Q: Hey gang!
I have a question about Aritzia Inc.
How much share price decline can we expect in a Trump-tariff situation? What is the tariff risk?
Your report notes the seasonality of ATZ with most revs coming in during Aug-Feb (the third and fourth quarters).
If I were looking for share price "pop" or a surprise, when would the seasonally influenced numbers show up? Would it be in the upcoming earnings report (Q4)?
I ask because I see a lot of ATZ clothing being worn, and I expect the numbers to be extra good.
Having said that, 5i made a great call on ATZ months ago. Is there room for more growth?
Regards,
David
I have a question about Aritzia Inc.
How much share price decline can we expect in a Trump-tariff situation? What is the tariff risk?
Your report notes the seasonality of ATZ with most revs coming in during Aug-Feb (the third and fourth quarters).
If I were looking for share price "pop" or a surprise, when would the seasonally influenced numbers show up? Would it be in the upcoming earnings report (Q4)?
I ask because I see a lot of ATZ clothing being worn, and I expect the numbers to be extra good.
Having said that, 5i made a great call on ATZ months ago. Is there room for more growth?
Regards,
David
5i Research Answer:
The stock is down $7, or nearly 10%, from its high in January, so there may be some embedded tariff adjustment in the stock already. Aritzia discussed tariffs in January. ATZ gets 30-35% of its merchandise from China and plans to lower that to about 25% in the next 1-2 years, indicated that if the tariff on Chinese goods were raised by 10%, the impact to margin would be less than 0.30%. Historically, the stock has seen the biggest moves in January, when it typically reports its Q3 (which ends Dec 31). We continue to like the stock. In fashion, the company has a good sense of trends, and the US business is going surprisingly well.