Aritzia Inc.

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 turn the conference over to Beth Reed, Vice President, Investor Relations. Please go ahead.

Thanks, operator, and thank you all for joining Arisia's first quarter fiscal 2026 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 made 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 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 and our annual information form, which include a summary of the material 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+, as well as the investor relations section of our website. I'll now turn the call over to Jennifer.

Good afternoon, everyone, and thank you for joining us today. Our results for the first quarter of fiscal 2026 exceeded the outlook we provided in May, and they highlight the strength and growing awareness of the Aritzia brand. Fundamental to our performance was our spring-summer assortment of high-quality, beautiful products, which resonated extremely well with our clients. This, combined with our optimized inventory position, strategic marketing investments, and new boutique openings, grew a continued strong momentum in e-commerce and accelerated growth in our retail channel. For the first quarter, we achieved net revenue of $663 million, a 33% increase over last year and above the top end of our guidance range. Growth was consistent across channels with net revenue increasing 34% in retail and 30% in e-commerce. This underscores the broad strength of our multi-channel business. Comparable sales grew an outstanding 19% fueled by double-digit positive growth in all channels and all geographies. Our business in the United States continued to drive our results. This was fueled by the strong performance of our new and repositioned boutiques over the last 12 months. In addition, elevated demand for our spring-summer product drove continued momentum in e-commerce. We supported this through strategic investments in marketing, and we also generated strong comparable sales growth in our existing boutiques. During the quarter, we continued to drive brand awareness and fuel the growing appreciation for our everyday luxury offerings. Our base of active clients in the US increased by approximately 40% compared to Q1 last year. All of this drove a 45% increase in first quarter net revenue in the United States. We're also extremely pleased with our first quarter results in Canada, building on our strong Q4 momentum. In Q1, we drove a 17% increase in net revenue. Clients responded well to our product assortment, and our marketing helped keep Aritzia top of mind when they were ready to shop. Turning to our retail channel, over the past 12 months, we grew our square footage by an unprecedented 25%. During this time, we opened a total of 13 new and 3 repositioned boutiques, which included one new and one repositioned boutique in the first quarter, both in Canada. We also generated strong mid-teens comparable sales growth in our existing boutiques. This was fueled by elevated demand for our products and supported by our investments in marketing. Our successful real estate expansion strategy and strong comparable sales growth enabled us to deliver retail net revenue growth of 34% in the quarter. Our real estate expansion strategy continues to yield strong results year after year. Payback periods for even our newest boutiques are exceeding our target of 12 to 18 months. The fiscal 2025 class of standard boutiques is tracking the payback in less than 12 months. Our repositions also continue to perform well, driving top-line growth and profitability while elevating the customer experience. Our newly expanded and repositioned boutique here in the Greater Vancouver area has the distinction of being our largest boutique in Canada at 22,000 square feet. It features the first AOK Cafe on the west coast of Canada. Sales in the first two months are beating our expectations by 50%, putting it on track to pay back well ahead of our target of 18 to 24 months for reposition. Our boutique openings have a consistent track record as our most predictable driver of top line growth. They help drive awareness and client acquisition in both new and existing markets. This fiscal year, we plan to open a minimum of 12 new and five repositioned boutiques, including locations in five new markets across the United States. In Q2, we expect to open four new boutiques in the US. This includes locations in Raleigh and Salt Lake City, which are new markets for us, as well as in Miami and the Boston area. We also plan to open our newly expanded boutique in Orlando. In e-commerce, we delivered an increase in net revenue of 30% in the first quarter. This was driven by a robust demand for our spring-summer assortment. In addition, our focus on full funnel marketing fueled an increase in e-commerce traffic of nearly 50% in the United States. We also continue to drive meaningful growth in new and existing clients, both in Canada and the United States. In Q1, we completed the migration of all website traffic to the new and improved Arisia.com. We're extremely pleased with the performance of our new site. It enables us to offer our clients an elevated experience, greater personalization, and enhanced product discovery. Over the balance of this year, we're launching additional functionality aimed at further boosting client engagement and encouraging omnichannel shopping. We remain on track with the expansion of our digital commerce platforms, including international e-commerce that will launch next month and the Aritzia mobile app launching in the back half of this fiscal year. These platforms will provide clients with greater access to our product assortment while reducing friction, increasing conversion, and most importantly, further fueling the momentum in our e-commerce business. Turning to product, throughout the first quarter, demand for our spring-summer assortment was broad-based. Clients responded well to our iconic franchises and exciting styles in lighter-weight fabrics. We drove additional excitement through collaborations, such as the Sperry Arisia Collab and seasonal drops that resonated with our clients. To help grow awareness and further amplify our unique everyday luxury offering, we continue to refine our marketing strategy. By increasing the integration of marketing across the business, we've created a halo effect that spans all geographies, both online and in all of our boutiques. Our teams across product, marketing, retail, and digital are laser focused on initiatives that will elevate brand love for everyday luxury and in turn grow awareness. In Q1, we continue to spotlight the core elements that make our brand iconically Aritzia. High-quality product, beautiful and aspirational shopping environments, and dedicated and engaging client service. Our increased investment in digital marketing has continued to fuel our growth both online and in our boutiques. Just one year in, we've already seen meaningful success. Our focus remains on reinforcing our everyday luxury brand ethos growing awareness across U.S. demographics, and acquiring new clients and retaining existing clients to drive incremental revenue. Our updated fiscal 2026 outlook reflects a substantial decrease in U.S. reciprocal tariffs on Chinese goods to 30% from 145%. While this is a positive development, the impact from the tariffs remains meaningful. I think it's important to note that without the pressure from reciprocal tariffs, we would have guided to an adjusted EBITDA margin in the range of 17 to 18 percent. Todd will speak to our revised assumptions during his remarks, but first I want to provide an update on our approach to help mitigate the impact of tariffs and grow our margins. diversification of our supply chain is well underway and has exceeded even our own expectations we expect our china sourcing mix to be in the mid single digits if not lower for spring 2026. second we've had productive conversations with our long-standing supplier partners regarding cost sharing that said given the change in tariff landscape this will have a smaller impact than initially anticipated third We're in year three of our smart spending initiative and have implemented additional non-client facing cost reduction. We have been particularly thoughtful about ensuring a balance between growing our margins and investing for the future. And finally, we're continuing to focus on our multi-year initiative to improve IMU. And as a reminder, nearly 40% of our business is not impacted by the tariffs because it is generated outside the United States. Macro uncertainty, including US tariffs and broader consumer concerns, continues to pose unique challenges for virtually every company across all industries. However, we remain confident given our strong fundamentals. We have an agile global supply chain. Our balance sheet is healthy. Our client base is extremely loyal. The strength of the Aritzia brand has never been greater. and adaptability and our ability to execute with excellence are built into our DNA. Looking ahead, we're pleased with the start to our second quarter, where our momentum has continued across the business. I'm both optimistic and realistic as I reflect on our strong first quarter and the initiatives on deck for the balance of the year. Yet mindful, we will be cycling our exceptional growth in the back half of last year. We have a great pipeline of boutique openings for fiscal 2026. We're in a strong inventory position to meet the demand for our product, and we're launching international e-commerce as well as our mobile app. We continue to navigate macro developments from a position of financial and operational strength as we adapt to the environment around us and execute across our three strategic growth levers, geographic expansion, digital growth, and increased brand awareness. Our recent results underscore the strength of our business model and growing appreciation for our brand, and yet we still have a long runway for growth in the United States. Even with the impact of tariffs, we're on the path to reaching our fiscal 2027 adjusted EBITDA margin target of approximately 19%. This gives me great confidence in our ability to execute and capitalize on all of the opportunities that lie ahead. In closing, these tremendous results could not be possible without our world-class team, and I would like to thank all of our people for their dedication to excellence and commitment to growing the Aritzia brand. With that, I'll now hand it over to Todd to discuss the details of our financial performance.