VANCOUVER – Clothing retailer Aritzia Inc. expects net sales to be around 45% lower for the current quarter compared to same period last year due to related store closures COVID-19 and despite a significant increase in online sales.
The company expects net revenue for the three months ending May 31 to fall to between $ 105 million and $ 110 million, from around $ 197 million in the first quarter of last year, the company said Thursday.
âThis reflects two weeks of decelerating retail revenues in March before our stores closed,â CEO and founder Brian Hill said on a conference call with analysts.
Aritzia saw store sales slow in the first two weeks of March as the coronavirus pandemic unfolded in Canada. On March 16, the company closed its 96 stores in Canada and the United States in an effort to help curb the spread.
However, Aritzia saw strong e-commerce revenue for the quarter, he said.
Artizia has shifted its online merchandise to products more relevant to the country’s efforts to stay at home as much as possible. The company has also removed minimum spend in order to qualify for free shipping and relaxed its return policy, among other measures.
âEven though our overall business has declined significantly due to the closure of our stores, our e-commerce revenue growth has exceeded 150% over last year,â he said, noting that this has enabled the company to avoid any layoffs. or time off during the pandemic.
Artzia also expects to receive around $ 6 million from Canadian and US government support programs for each month of eligibility, which has helped its employees keep their jobs.
The retailer has prioritized investing in digital sales tools, including a new app it has been piloting since mid-May, said Jennifer Wong, president and chief operating officer.
Twenty-five stylists use the new Clientele app to connect with their best clients. The application allows them to view customer profiles and purchase histories; call, text or e-mail customers; and organize looks and share styles, among other features that aim to drive traffic and sales to the retailer’s website.
âWe have already seen encouraging first results. “
The company began slowly reopening some of its stores from May 7 and expects around 30 of its stores to open by the end of the first quarter.
Its financial outlook came as the company released its final quarter results.
Aritzia saw its net income for the fourth quarter ended March 1 increase 6.3% to $ 275.4 million, from $ 259.1 million in the same quarter a year earlier.
Net income totaled $ 21.7 million, up 16% from $ 18.7 million in the fourth quarter last year.
Adjusted net income for the quarter fell 6.6 percent to $ 23.4 million or 21 cents per diluted share, from $ 25.1 million or 21 cents per diluted share in the same period last year .
The “results for the company were strong although one step ahead of expectations,” wrote Irene Nattel, analyst at RBC Dominion Securities Inc., in a note.
She noted that Aritzia’s estimated first quarter Adjusted EBITDA loss (earnings before interest, taxes, depreciation and amortization) of $ 24-28 million is higher than its previously released forecast by a positive amount of 3.5. millions of dollars.
âThe high demand during the COVID-19 period is an exceptional result given the necessities-driven consumer spending during the period. “