Aritzia (OTCMKTS:OTC:ATZAF) is a fashion boutique that designs and distributes several exclusive brands including TNA, Babaton, and Wilfred. The retailer has 97 stores in North America, including 29 in the U.S. The stock has seen wild swings since the start of the year and is down 1% year-to-date. We believe that there is ample opportunity for growth within the U.S., especially through the eCommerce channel, and the stock has a lot of room to grow in the next few years.

(Aritzia Stock Market Chart – Seeking Alpha, 2020)

Aritzia has most likely already taken the worst of the pandemic – expect to see pre-COVID revenue figures very soon

Aritzia’s abysmal 50+% revenue drop in Q1/2021 can be attributed to many different factors, including the fact that only 30/97 stores were open at the end of the first quarter. Another factor is that British Columbia, a Canadian province that has 16 Aritzia boutiques, shut down quickly at the beginning of the first quarter and the company was not able to benefit from in-store revenues for most of the quarter (Aritzia Investor Presentation, 2020).

However, since the mid-point of the second quarter, 89/96 stores re-opened, and management believes the stores are trending at 55-65% of last year’s productivity levels (Aritzia Investor Presentation, 2020). Management has also stated that eCommerce is performing 50% to 100% better than last year, which is quite promising given that customers were given the option to visit physical stores again recently.

Aritzia also stated that net revenue “for the first five weeks of the second quarter was down approximately 25% to 30% compared to last year (Aritzia Investor Presentation)”, which signifies that Aritzia is well on its way to pre-COVID revenue figures.

We believe that the momentum generated store reopenings as of the mid-point in Q2/2021 could signify