Aritzia Inc.

Thank you for standing by. This is the conference operator. Welcome to Eritrea's fourth quarter 2024 earnings conference call. As a reminder, all participants are in listen only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star then zero. I will now like to turn the conference over to Beth Reed, Vice President, Investor Relations. Please go ahead.

Good afternoon, and thanks for joining Arisia's fourth quarter fiscal 2024 earnings call. On the call today, I'm joined by Jennifer Wong, our Chief Executive Officer, and Todd Engledue, our Chief Financial Officer. As a reminder, please note that remarks on this call may include our expectations, future plans, and intentions, that may constitute forward-looking information. Such forward-looking information is based on estimates and assumptions made by management regarding, among other things, general economic and geopolitical conditions as well as the competitive environment. Actual results may differ materially from the conclusions, forecasts, or projections expressed by the forward-looking information. We would refer you to our most recently filed management discussion and analysis in our annual information form, which include a summary of the materials assumptions as well as risks and factors that could affect our future performance and our ability to deliver on the forward-looking information. Our earnings release, the related financial statements, and the MD&A are available on CDAR Plus as well as the investor relations section of our website. I will now turn the call over to Jennifer.

Thanks, Beth. Good afternoon everyone and thank you for joining us today. For the fourth quarter of fiscal 2024, we delivered net revenue of $682 million, an increase of 7% compared to the fourth quarter of fiscal 2023. This is on top of delivering outstanding revenue growth of 44% in the fourth quarter last year. It's also on top of 66% growth in the fourth quarter of fiscal 2022. All financial metrics discussed today are inclusive of the 53rd week in fiscal 2024, except for comparable sales. Comparable sales declined 3% for the quarter as we cycled a remarkable 32% increase in Q4 last year. In the US, our net revenue increased 9% for the quarter, while sales grew 4% in Canada. In our retail panel, Net revenue increased in the fourth quarter by 15%. This was driven by the progress we've made on our real estate expansion strategy. During the quarter, we opened three new boutiques, Indianapolis, Indiana, Puerto Madera, California, and Roseville, California. We also opened a newly repositioned location in Skokie, Illinois. Thus far in Q1, we've completed the reposition of our Oak Brook, Illinois boutique. We also opened a reigning champ pop-up at Yorkdale in Toronto. Finally, we plan to open a new boutique in Boca Raton later this month, our fourth boutique in the state of Florida. This is significant because boutique openings have been our most consistent, predictable driver of top line growth. The performance of our new boutiques remains strong, beyond our expectations. The cohort of six new boutique openings in fiscal 2024 is tracking to pay back in under 12 months. This beats our own projections of 12 to 18 months. But it's not just the new boutiques that are performing very well and driving our top line growth. Our boutique repositions are delivering as well. Repositions elevate the customer experience and drive increased revenue and profitability. From fiscal 2022 to 2024, we completed six repositions in the U.S. Collectively, we more than doubled the square footage of these boutiques and drove an even higher increase in sales. This resulted in a mid-single digit lift in sales per square foot. Turning to e-commerce, net revenue decreased by 3% in the fourth quarter. This was driven by a lower volume of markdown sales compared to the fourth quarter last year. The tremendous opportunity we see in e-commerce is far greater than our recent performance. But we also recognize we're coming off three years of unprecedented growth, delivering a four-year e-commerce net revenue pager of 34%. We're confident that as we continue to optimize the composition of our product, friends will reaccelerate. In addition to optimizing our product, we're focusing on three areas to further support growth in e-commerce. One, we're investing in digital performance marketing. This will help amplify our product franchises, grow brand awareness in the US, and drive customer engagement. Two, we're making good progress on upgrading the technology that underpins our e-commerce platform. We have bold, creative plans for delivering an outstanding customer experience on Aritzia.com. This latest technology will allow us to reach these goals. And three, we're optimizing our Omni capabilities. As a reminder, in Q3 in Canada, we completed the rollout of buy online, ship from store, and continued piloting buy online, pick up in store. In Q4, we launched omnichannel capabilities in the U.S. Early results are encouraging, and we look forward to ramping up buy online, pick up in store to more than 100 boutiques this quarter. Omnichannel services optimize our inventory and lower our distribution costs. In addition, we believe omnichannel will ultimately drive incremental low- to mid-single-digit e-commerce sales growth. Turning now to product, one of our primary goals continues to be improving the composition of our product, both online and in our boutiques, and that's exactly what we're doing. We've achieved a much better balance of newness and client favorites, and our composition has continued to improve in Q1. Furthermore, our new styles have been well received, which is a positive indicator for future seasons. We're pleased with the progress we made on our inventory position. We successfully cleared through our fall-winter inventory, ending Q4 with inventory down 27% compared to last year. In March, we launched Golden. Golden is an expansion of the athletic assortment we offered under our T&A brand and allows us to address even more of our clients' activewear needs. Golden is designed for the athlete who loves all things refined. It features luxuriously crafted essentials made with high-performing fabrics and next-level details. This represents beauty in sports, something we call the aesthetics of athletics. In marketing, our spring sweat fleece campaign featured international supermodel and ongoing brand fan, Arena Shake, establishing cultural relevance and fashion credibility. Alongside the campaign, more than 100 aspirational influencers highlighted the stunning versatility of Sweat Fleece by showing their audience how they were hashtag spotted in Sweat Fleece. We also continued growing our community of celebrity fans, including Blake Lively in Babiton at the Super Bowl and Meghan Markle in the Super Puff. In addition to propelling brand awareness and driving client engagement, we also see a tremendous opportunity in marketing, to amplify our product franchises. Over the last 40 years, Aritzia has become the creator and purveyor of everyday luxury. Our clients know and love the Aritzia brand, which has inspired us to offer more of our styles under the Aritzia name. This enables us to focus and augment the brand as we continue to increase awareness, particularly in the US. Of course, our multi-brand strategy is one of our key competitive advantages. So we will continue to create, design, and evolve our collection of exclusive brands that cater to the lifestyles of our clients. During the quarter, we continued to optimize our distribution network. The ramp up of our new Ontario distribution center has gone extremely well. Productivity KPIs continue to beat our expectations. Pick and pack metrics have increased by more than 70% compared to the prior third party facility. e-commerce specifically has increased by more than 90%. Per unit labor costs are down meaningfully, and we have now exited all of our temporary offsite facilities, resulting in a significant reduction in our inventory management costs. Now, I'll turn the call over to Todd.