In FY24, the company also expects its gross profit margin to decrease by approximately 200 basis points (bps) due to ongoing inflationary pressures, normalised markdowns, pre-opening lease amortisation and additional warehousing costs related to inventory management, partially offset by lower expedited freight costs.
Canadian fashion brand Aritzia expects a 10 per cent to 14 per cent increase in net revenue in fiscal 2024, reflecting strength in the US and retail expansion.
However, gross profit margin is expected to decrease by 200 bps and selling, general, and administrative expense as a percentage of net revenue to increase by 150 bps compared to fiscal 2023.
Meanwhile, selling, general, and administrative expense as a percentage of net revenue is set to rise by 150 bps in FY24 due to distribution centre project costs and the annualisation of investments in talent and increased retail wages made in the back half of fiscal 2023, the company said in a press release.
To support its growth, Aritzia plans to build infrastructure, including a new distribution centre in the Toronto area, repositioning of its three New York City flagships and a new Chicago flagship, expansion of support office space and e-commerce technology. Despite near-term margin pressures, Aritzia expects FY25 adjusted EBITDA to return to FY23 levels of 16 per cent.
“In fiscal 2024, our focus will be on scaling our infrastructure to match our recent tremendous growth and make strategic investments to fuel our future growth and achieve our long-term goals. While investing for the future, we are also focused on optimising our processes to more efficiently manage our current business, helping ensure we are positioned to deliver profitable growth for the long term. I am extremely grateful to our highly talented team for their hard work and unwavering commitment to excellence, which continues to propel us toward our goals,” said Jennifer Wong, chief executive officer.
Fibre2Fashion News Desk (DP)