By Adriano Marchese
Aritzia, a Canadian women’s fashion brand, experienced a significant drop in its stock value on Wednesday. The company revised its outlook for the year, attributing the change to shifting consumer shopping habits and slowing traffic trends.
At 12:35 p.m. ET, Aritzia’s shares were down 21% at 26.66 Canadian dollars ($20.15).
In their updated guidance, Aritzia now projects a revenue range of C$2.25 billion to C$2.35 billion Canadian dollars for the year ending in February. This adjustment was made alongside the release of the company’s first-quarter results after the market closed on Tuesday.
This revised forecast is lower compared to their previous projection of C$2.42 billion to C$2.5 billion. Analysts polled on FactSet expected revenue to reach C$2.48 billion.
Additionally, Aritzia anticipates a decrease in the full-year gross profit margin by approximately 300 basis points, compared to their earlier forecast of a decline of about 200 basis points. This change is driven by higher selling, general, and administrative expenses.
Aritzia’s outlook reflects a drop in profit and margin during the fiscal first quarter, primarily due to increased inventory levels, rising expenses, and discounts.
