Aritzia Inc.

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 Aritzia's second 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 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 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 Plus as well as the investor relations section of our website. I'll now turn the call over to Jennifer.

Thanks, Beth. Good afternoon, everyone, and thank you for joining us today. I'm delighted to share that our results for the second quarter of fiscal 2026 exceeded the outlook we provided in July across sales and margins. Trends in July and August surpassed even our highest expectations as we fueled exceptional broad-based strength across channels and geographies. This was driven by continued robust demand for our high-quality, beautiful products as our summer assortment seamlessly transitioned to the launch of our fall campaign, which began at the end of July. This, combined with our strong inventory position, strategic marketing investments, and new boutique openings drove a 32% top-line increase over last year. We achieved net revenue of $812 million in the second quarter, well above the top end of our guidance range. We're extremely pleased with our performance in both channels with net revenue increasing 34% in retail and 26% in e-commerce. Comparable sales grew an outstanding 22% fueled by double digit positive growth in all channels and all geographies. led by our U.S. e-commerce business. Our performance in the United States continued to drive our overall results. In the second quarter, we generated a 41% increase in U.S. net revenue, underscoring the strength and growing awareness of the Aritzia brand. Our results were fueled by the strong performance of our new and repositioned boutique over the last 12 months. In addition, Elevated demand for our products drove continued momentum in e-commerce, which we supported through strategic investments in marketing. We also generated outstanding comparable sales growth in our existing boutiques. During the quarter, we continued to focus on driving brand awareness and fueling the growing appreciation for our everyday luxury offerings. We've seen outstanding new customer growth in the United States where our base of loyal clients expands quarter after quarter. We're also super pleased with our second quarter results in Canada. We accelerated our sales growth for a third consecutive quarter, achieving a 21% increase in net revenue in Q2. We continue to maintain strong loyalty in Canada as clients responded well to our product assortment. In addition, our marketing investments helped drive double digit growth in our active client base. In our retail channel, we delivered net revenue growth of 34% in the second quarter. This was driven by the success of our real estate expansion strategy, as well as strong comparable sales growth in both the United States and Canada. Over the past 12 months, we increased our retail square footage by 25%. opening a total of 13 new and four repositioned boutiques. This included three new boutiques and one repositioned boutique in the second quarter, all in the United States. We also generated high teens comparable sales growth in our existing boutiques. This is primarily driven by traffic growth due to the elevated demand for our product and supported by our strategic investments in marketing. Our real estate expansion strategy continues to yield exceptional results. This underscores the vast opportunity for growth in the United States, where we have just 68 boutiques today. The boutiques we've opened in the U.S. in fiscal 2026 are tracking to pay back in less than one year on average. That exceeds our target of 12 to 18 months. Boutique openings continue to be our most predictable driver of top-line growth. They enhance brand visibility and support client acquisition in both new and existing markets. In Q3, we expect to open six new boutiques in the United States. This includes locations in Pittsburgh and Scottsdale, which are new markets for us, as well as in Denver, Miami, and Minneapolis. We also plan to open our newly repositioned Flatiron flagship in Manhattan. In e-commerce, we delivered an increase in net revenue of 26% in the second quarter. This was driven by the robust demand for our product from our summer assortment to the launch of our fall campaign. Notably, our focus on full funnel marketing fueled an increase in website traffic of nearly 50% in the United States. In addition, we benefited from site enhancements, operational improvements, and higher omni-channel engagement. In late August, we launched our new and improved international e-commerce platform. The site offers an enhanced shopping experience, which is fueling higher revenue growth through increased conversion. Its performance in the first six weeks has meaningfully exceeded our expectations, and we're confident we'll hit our target to triple sales within two years or less. And that's before we've even launched any dedicated marketing, which is still to come. In addition, I'm excited to report that we're on track to launch our mobile app later this month. The Aritzia app is the introduction of an entirely new shopping channel for our clients. It will place duration, selling expertise, and our quality product right in their hands. These new platforms 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 now to product, throughout the second quarter, demand for our assortment was broad-based across multiple categories. We saw an outstanding response to our fall launch across all geographies, as clients responded well both to our iconic franchises and our new styles. These included exciting new colors and prints. Due to the success of our spring-summer styles and focus on seasonal transitions, we drove stronger, full-price selling year over year. In addition, we remain well positioned with the right inventory in the right place to drive sales. Looking ahead, new winter styles and exciting drops and collaborations will surprise and delight our clients. We're confident these will keep clients engaged and attract new clients, all driving continued strong performance. We're continuing to refine our marketing engine across the organization to help grow awareness and spotlight all the different aspects that set Aritzia apart. namely high-quality, beautiful product, aspirational shopping environment, engaging client service, and captivating communication, all of which is provided at an attainable price point. In Q2, we continued to deepen our focus to ensure that everyday luxury is synonymous with the Aritzia brand. Partnerships with Sperry and Thistles helped solidify Aritzia as a destination for exciting brand collaborations. In addition, celebrity sightings in iconically Aritzia pieces reinforced Aritzia as a much-loved and highly sought-after brand with aspirational appeal. Our increased investment in digital marketing continues to fuel our growth both online and in our boutiques. We're continuing to refine our programs and tactics across existing channels while launching new channels to further drive brand awareness. 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. Shifting to the current trade environment, previously under the de minimis exemption, we utilized our existing supply chain network in Canada to fulfill a portion of U.S. e-commerce orders. However, the removal of the de minimis exemption in August required an operational pivot. We've relocated all U.S. order fulfillment to our distribution center in Ohio, which we strategically expanded last year to 560,000 square feet, more than double its prior size. We've also hired additional staff and pulled forward retrofitting work. We are now operating at triple the capacity compared to prior to the de minimis removal. And eventually, further optimization will allow us to quadruple our prior capacity. More importantly, there was no impact on the exceptional client service for which we are known and loved. This will allow us to handle U.S. order volume for the next two years. I'm extremely proud of our teams for this seamless transition. Despite headwinds from the elimination of the de minimis and higher reciprocal tariff rates on Vietnam and Cambodia, our proactive mitigation strategies and strong revenue growth have positioned us very well. As a result, our margin outlook for fiscal 2026 is unchanged at 15.5 to 16.5%. We're leveraging our agile global supply chain to minimize tariff exposure where possible. We continue to expect our China sourcing mix to be in the mid single digits, if not lower for spring 2026. We've also received cost sharing support from our longstanding supplier partners. In addition, we're continuing to focus on smart spending and IMU improvement to key multi-year initiatives to drive margin expansion. We continue to navigate macro developments from a position of strength. The fact that we're still growing our margins this year in spite of these developments speaks to our agility and ability to execute with excellence. Without reciprocal tariffs and the removal of the de minimis, we would otherwise be tracking an adjusted EBITDA margin of 18 to 19% for this year. That's in line with our long range target one year early. Looking ahead, we're pleased with the start to our third quarter. The outstanding momentum in our business has continued across all channels and all geographies. We continue to be in a strong product position with the right product in the right place at the right time. We're also in a strong inventory position to meet the robust demand for our product. In addition, we continue to make progress with our digital initiative. We're launching our mobile app later this month, delivering ongoing site enhancements and operational improvements, and continuing to refine our strategic marketing investments, which are all driving traffic and creating demand. And last, but certainly not least, we have a terrific pipeline of nine new boutiques opening in the back half of this year, as well as the reposition of our Flatiron flagship. The momentum in our business, our proven operating model, and our healthy balance sheet give us confidence in our path forward as we capitalize on our vast opportunity for growth in the United States and beyond. In closing, I would like to thank our people for their hard work and commitment to excellence as we grow the Aritzia brand. Our consistent Strong results would not be possible without all of our exceptional teams across the business. With that, I'll now hand it over to Todd to discuss the details of our financial performance.