Canadian fashion retailer Aritzia has experienced significant growth in fiscal year 2023 (FY23), with a 39.6% increase in gross profit, reaching $914 million. This impressive growth is attributed to higher sales volumes across the company's retail and eCommerce channels. In comparison, Aritzia's gross profit in the previous fiscal year was $655 million.
In the fourth quarter of FY23, Aritzia's gross profit rose by 34.9% year over year to $242.2 million. However, the gross profit margin decreased by 240 basis points to 38%, primarily due to markdowns from the previous year and foreign exchange headwinds. Despite these challenges, the company's net income for FY23 increased by 19.5% compared to the previous fiscal year, reaching $187.6 million. Aritzia's success can be attributed to its strong performance in both its retail and eCommerce sectors.
The company's net revenue increased by 43.5% year over year to $637.6 million in Q4 FY23, with U.S. net revenue making up 52.9% of the total net revenue. Over a two-year period, Aritzia grew its business from $857 million in annual net revenue in Fiscal 2021 to $2.2 billion in Fiscal 2023, resulting in a two-year top line increase of 160%. For Fiscal 2024, Aritzia expects net revenue to range between $2.42 billion and $2.5 billion, representing an increase of approximately 10% to 14% from Fiscal 2023.
This growth is expected to be driven by continued strength in the United States across both retail and eCommerce channels, as well as ongoing growth in Canada. The first quarter of Fiscal 2024 is off to a promising start, with Aritzia on track to deliver expected net revenue in the range of $450 million to $460 million. This reflects a sales increase of 10% to 13% on top of the growth of 65% in the first quarter of Fiscal 2023.
Aritzia's management team and Board are confident that the company's growth strategies, targeted infrastructure investments, and cost efficiencies will drive sustained double-digit revenue and earnings growth in the coming years.
