Aritzia Q2 Earnings: Adjusted EPS Beats by 25% and the Full-Year Guide Goes Up Again
Aritzia reported Q2 fiscal 2027 earnings after Thursday’s close with adjusted diluted EPS of $1.31, which is 24.7% above the $1.0506 consensus of 14 analysts, our arithmetic on those two figures. That consensus is Yahoo Finance’s and it is the Street’s own number rather than a company target, because Aritzia guides revenue and margins and never earnings. The company’s own stated change on the year-ago $0.59 is 122.0%.
Net revenue of $1,169.813 million beat the $1,118.956 million consensus of 15 analysts by 4.5% and landed 4.0% above the top of Aritzia’s own guide of $1.100 billion to $1.125 billion, both ours. Company-stated growth was 44.1% on $812.054 million, against a guide of approximately 35% to 39%. Some of that is translation. Growth was 42.1% on a constant currency basis, on a $16,022 thousand foreign exchange impact, so about two percentage points of the headline is currency, In dollars that is $16.0 million of the $357.8 million the top line added on the year, ours. Aritzia reports in Canadian dollars and fiscal 2027 ends February 28, 2027, so the year is mostly calendar 2026.
The part the Street had not priced is the outlook. Three lines of it went up: net revenue, adjusted gross margin and adjusted EBITDA margin. For revenue and gross margin that is the third quarterly guide for fiscal 2027 since the series began in May, and the second raise of it. The new full-year revenue floor of $4.78 billion sits above the $4,710.5 million the Street carried for all of fiscal 2027 going in, and above the July guide’s ceiling.
The release landed after the bell, so the reaction is pending. Aritzia finished Thursday at C$121.89, down 1.13% from C$123.28, on volume of 639,315 shares, data as of the 4:00 p.m. close on October 8, 2026 (Source: StockAnalysis).
The refund sits outside the numbers the beat is measured on
Two gross margins describe this quarter and only one of them describes the business. Aritzia recognised approximately $97.4 million of International Emergency Economic Powers Act (“IEEPA”) tariff refunds received during the 13 weeks ended August 30, 2026, on its own line inside cost of goods sold, “recovery of tariff refund claims”, in its second quarter fiscal 2027 earnings release. That is 8.4% of net revenue and 840 basis points of gross margin, both printed on the release’s own “recovery of tariff refund claims” line.
| line | as reported, refund included | adjusted, refund excluded |
|---|---|---|
| gross profit | $667.448 million, 57.1% of net revenue | $570.011 million, 48.7% |
| diluted EPS | $1.70 | $1.31 |
| net income | $201.690 million, 17.2% | Adjusted Net Income $156.042 million, 13.3% |
Source: Aritzia Q2 fiscal 2027 earnings release, page 2, and the non-IFRS reconciliations on page 12.
The beat is measured on the adjusted column. The release’s reconciliations deduct the whole $97,437 thousand from both Adjusted EBITDA and Adjusted Net Income, so $1.31 against $1.0506 is an underlying beat and not a refund artifact. The consensus itself is built on that basis, which is checkable: Yahoo Finance’s year-ago comparatives are $0.59 for the quarter and $3.25 for fiscal 2026, Aritzia’s adjusted figures, where its reported ones were $0.56 and $3.20.
One caution on the arithmetic that invites itself. Reported $1.70 less adjusted $1.31 is $0.39, and that gap is not the refund: it also carries stock-based compensation, an unrealised loss on equity derivatives, foreign exchange on intercompany balances and the related tax effects. The honest per-share figure for the refund alone is $0.82 pre-tax, excluded from the adjusted figures entirely, our arithmetic on $97,437 thousand over the 118,870 thousand weighted average diluted shares. A quarter where one line reads 57.1% or 48.7% depending on the basis is what our guide to how to read financial statements is for.
Second-quarter gross profit margin as each year’s Q2 earnings release reports it. Fiscal 2027 is shown on the adjusted basis, which excludes the $97.4 million of IEEPA tariff refunds; as reported it was 57.1%. Source: Aritzia Q2 earnings releases, fiscal 2023 p.2, fiscal 2024 p.2, fiscal 2025 p.2, fiscal 2026 p.2 and fiscal 2027 p.2 and p.12. The fiscal 2022 bar comes from the prior-year comparative column of the fiscal 2023 release.
Two facts sit side by side here. Aritzia recognised IEEPA tariff refunds it received in the quarter. The US Supreme Court held on February 20, 2026, in Learning Resources, Inc. v. Trump (No. 24-1287, consolidated with V.O.S. Selections), that “IEEPA does not authorize the President to impose tariffs”. The drag has not gone away. The release still names “the impact of additional tariffs and the elimination of the de minimis exemption” as the partial offset against the year-to-date margin gain, and keeps tariffs in its forward risk list.
Aritzia is not the first retailer to book one of these. Lululemon recognised $134.5 million of IEEPA refunds plus $4.1 million of interest, both inside its reported EPS, and its stock fell about 18% in after-hours trading on the guidance that came with it. That refund flattered a quarter whose outlook came down. This one sits outside the figures the beat is measured on, and the outlook went up.
The quarter underneath the headline
| line, 13 weeks ended August 30, 2026 | Q2 fiscal 2027 | % of net revenue | change from Q2 fiscal 2026 |
|---|---|---|---|
| retail net revenue | $766.866 million | 65.6% | +34.1% |
| digital net revenue | $402.947 million | 34.4% | +67.7% |
| net revenue | $1,169.813 million | +44.1%, from $812.054 million | |
| gross profit, as reported | $667.448 million | 57.1% | from $355.630 million at 43.8% |
| adjusted gross profit | $570.011 million | 48.7% | +490bp, the company’s own figure |
| SG&A | $345.434 million | 29.5% | from $250.213 million at 30.8% |
| Adjusted EBITDA | $246.170 million | 21.0% | +99.7%, up 590bp |
| adjusted net income per diluted share | $1.31 | +122.0%, from $0.59 |
Source: Aritzia Q2 fiscal 2027 earnings release, page 2, with the non-IFRS reconciliations on page 12. Percentage changes are the company’s own.
United States net revenue of $779.4 million grew 60.3% and is now 66.6% of net revenue, against Canada at $390.4 million, up 19.8%. Comparable sales, which Aritzia defines as combined growth in digital and established boutiques, grew 34.5% against total growth of 44.1%, on a count that went from 134 to 146 boutiques. Growth of that size on the digital and established-boutique base, rather than on new square footage alone, is what we weigh in ranking Aritzia among Canadian growth stocks.
Jennifer Wong, Chief Executive Officer, calls that Adjusted EBITDA margin “a second quarter record of 21%”. Inventory finished at $714.883 million, up 35.8% against revenue up 44.1%.
The outlook tariffs cut a year ago now stands a point higher
Aritzia sized the tariff pressure itself. Its fourth quarter and fiscal 2026 release, dated May 7, 2026, said it “Delivered a 260 basis point improvement in Adjusted EBITDA as a percentage of net revenue, despite 260 bps of pressure from tariffs and the elimination of the de minimis exemption”. On fiscal 2026 net revenue of $3,702.148 million, that is about $96 million, our arithmetic.
The cut came in last year’s second quarter release, dated October 9, 2025, which took the fiscal 2027 adjusted EBITDA margin outlook down to “high teens”, “due to additional pressure from U.S. reciprocal tariffs and the elimination of the de minimis exemption”. This release is dated October 8, 2026, almost exactly a year to the day later. From there the outlook went to approximately 19.0% on May 7, 2026, approximately 19.5% on July 9 and approximately 20.0% now, each figure from the release that gave it, against a fiscal 2026 base of 17.8%. That base was restated when Aritzia changed the composition of Adjusted EBITDA in the first quarter of fiscal 2027, a change the company stated had no impact on its previously provided outlook, so the steps are like for like. The outlook tariffs knocked into the high teens now stands a full point above where it was before the cut, and $97.4 million of IEEPA tariff refunds landed in the same quarter.
Three lines went up, and the footnotes say the refund is not why
Aritzia now guides fiscal 2027 net revenue to $4.78 billion to $4.88 billion, growth of 29% to 32%, with adjusted gross margin up 225 to 275 basis points from 44.9% and adjusted EBITDA margin at approximately 20.0%. In dollars, that is roughly $956 million to $976 million of adjusted EBITDA against about $659 million at 17.8% of fiscal 2026’s $3,702.148 million, ours, both ends on the restated definition. Both margin lines are 50 basis points better than the July guide, and the revenue floor is 0.6% above July’s ceiling and 3.9% above the original May ceiling, both ours. SG&A guidance is unchanged at approximately flat to down 50 basis points from 29.1%, as are capex, depreciation and amortisation, and the plan for 12 to 13 new boutiques with 11 to 12 of them in the United States. The currency assumption moved from USD:CAD 1.36 to 1.38, and a weaker assumed Canadian dollar lifts a Canadian-dollar revenue guide mechanically.
Aritzia’s fiscal 2027 net revenue guidance as given in each release: Q4 fiscal 2026, May 7, 2026, page 5; Q1 fiscal 2027, July 9, 2026, page 3; Q2 fiscal 2027, October 8, 2026, page 5. The consensus line is Yahoo Finance’s full-year figure before the report.
A reader could reasonably assume the margin raise is the refund arriving in the forecast. The footnotes say it is not. Footnote 5 states that the previous outlook of up 175 to 225 basis points “did not include the benefit of tariff refunds”, footnote 6 says the same of the previous approximately 19.5%, and the outlook text itself says “This outlook does not include any benefit from tariff refunds”. Both ends of both raises are refund-free, which makes the 50 basis point lift on each an underlying one.
The third quarter guide asks for more revenue and worse SG&A
The third quarter is guided to net revenue of $1.275 billion to $1.325 billion, approximately 23% to 27% growth on the $1,040.263 million Aritzia filed a year ago, with adjusted gross margin up 100 to 150 basis points from 46.0%, which is 47.0% to 47.5% on our translation. Even the floor of the revenue guide is 2.6% above the Street’s $1,242.622 million for the quarter and the midpoint is 4.6% above, both ours on Yahoo Finance consensus, where the adjusted EPS figure is $1.3895 from 13 analysts against the $1.10 Aritzia filed a year ago.
SG&A is the exception, guided 50 to 100 basis points worse than a year ago, and it is worth seeing why it can get worse while the full-year guide holds. The ratio is seasonal: it ran 32.0% in the first quarter of this year and 29.5% in the second, against 27.9% in the third quarter of last year and 26.3% in the fourth, so the second half is where SG&A as a percentage of revenue is naturally lowest and the guided 28.4% to 28.9% is a step up from a seasonally low base. The first half has already improved 140 basis points, 30.7% against 32.0%.
On the quarter already running, the release offers management rather than arithmetic. Jennifer Wong: “Our momentum has continued into the third quarter, driven by the positive response to our Fall product and growing affinity for our brand.” That is a claim, not a figure.
Four quarter-ahead guides, four overshoots
Our preview of this quarter argued that Aritzia’s revenue guidance has behaved as a floor rather than an envelope, and the quarter tested that on all three guided lines. The July release guided “gross profit margin to increase approximately 250 bps to 300 bps from 43.8%”, with no “adjusted” in it, so 46.3% to 46.8%. The adjusted actual of 48.7% is 193 basis points above the top of that, and it is the like-for-like read because the guide predates any refund. SG&A at 29.5% was 52 basis points better than the better end of the guided 30.05% to 30.55%. Both ours, computed from the dollars rather than the company’s rounded percentages.
Each of the last four quarter-ahead revenue guides has been beaten.
| guided in | for | guided | actual | above the top |
|---|---|---|---|---|
| Oct 9, 2025 | Q3 fiscal 2026 | $875 million to $900 million | $1,040.3 million | 15.6% |
| Q3 fiscal 2026 release | Q4 fiscal 2026 | $1.100 billion to $1.125 billion | $1,186.515 million | 5.47% |
| May 7, 2026 | Q1 fiscal 2027 | $900 million to $925 million | $951.009 million | 2.81% |
| Jul 9, 2026 | Q2 fiscal 2027 | $1.100 billion to $1.125 billion | $1,169.813 million | 3.98% |
Each guide from the release that gave it and each actual from the release that filed it. The percentages above the top of each range are ours.
The second half is guided to add a fraction of what the first half delivered
Revenue is the plainest version of this. The first half delivered net revenue growth of 43.7%, and 43.7% on a constant currency basis too: the first quarter’s $15,997 thousand foreign exchange headwind and the second quarter’s $16,022 thousand tailwind very nearly cancel, leaving a $26 thousand impact across the 26 weeks, so the half’s growth is organic. Back it out of the full-year guide and the implied second half is $2.659 billion to $2.759 billion against $2,226.778 million a year ago, growth of 19.4% to 23.9%, our subtraction on the company’s inputs. The third quarter inside that is guided to 22.6% to 27.4% growth, ours, which leaves the fourth quarter implied at roughly $1.33 billion to $1.48 billion against $1,186.5 million, growth of about 12% to 25%. The first of those four overshoots was 15.6%; the three since have run between 2.81% and 5.47%, so the recent beats are a fraction of the early one.
The margin arithmetic says the same thing. The first half filed $2,120.822 million of net revenue and $1,048.036 million of adjusted gross profit, an adjusted gross margin the company states as 49.4% and which is 49.42% on our arithmetic. The first half of fiscal 2026 was 45.31%, so the half has delivered 411 basis points of year-over-year gain on our arithmetic from the dollars, where the release prints 410 on page 4.
| full-year guide used | implied H2 adjusted gross margin | step from H1 | against H2 fiscal 2026 at 44.59% |
|---|---|---|---|
| low, $4.78 billion at 47.15% | 45.34% | -407bp | +75bp |
| midpoint, $4.83 billion at 47.40% | 45.82% | -360bp | +123bp |
| high, $4.88 billion at 47.65% | 46.29% | -312bp | +170bp |
Our arithmetic on the fiscal 2027 outlook in the Q2 fiscal 2027 earnings release, page 5, and the filed first half on page 4. The guide gives a revenue range and a margin range independently, so each row pairs the matching ends to bound the envelope. No other pairing of those ends implies a second-half margin above the 46.29% in the high row.
Aritzia’s own first-half-to-second-half steps across five filed years run -103 basis points in fiscal 2022, -235 in fiscal 2023, +305 in fiscal 2024 (a 53-week year with a 14-week fourth quarter), +203 in fiscal 2025 and -72 in fiscal 2026, so even the top of the guide implies a steeper step down than any of the five.
Aritzia’s filed first-quarter-to-second-quarter steps run +43 basis points in fiscal 2022, then -243, -392, -383 and -336 through fiscal 2026. This year the first quarter printed 50.3% and the second quarter 48.7% adjusted, a step of -154 basis points on our arithmetic from the dollars, where the guide had implied -347 to -397. Both ends of that comparison are refund-free.
Where the stock sits, and where the company is buying
Thursday’s C$121.89 close is 29.6% below the 52-week closing high of C$173.20 set on June 15, 2026, our arithmetic on Yahoo Finance daily closes and a closing high rather than an intraday one. On the pre-report full-year consensus adjusted EPS of $4.9416 from Yahoo Finance, that close is 24.67x on our arithmetic, a multiple already stale because the estimates behind it were set before a 24.7% beat and a raised guide.
Aritzia kept buying through the drawdown. It repurchased 912,800 subordinate voting shares for $125.3 million during the quarter, against 202,500 for $15.3 million in the year-ago quarter, an average of about $137 on our arithmetic. Then from August 31 to October 7, after the quarter had closed, it bought 654,038 more for $80.0 million at a company-stated average of $122.33, which is 44 cents above Thursday’s close, ours. The cash was there: free cash flow was $214.335 million in the quarter against $62.614 million a year earlier, and cash finished at $528.143 million against $352.349 million.
What the buying has done to the share count cuts both ways. The second quarter’s weighted average diluted count did fall, 118,870 thousand against 119,101 thousand a year earlier. Across the full half it rose, 118,972 thousand against 118,664 thousand, up 308 thousand, so the $191.6 million spent across the first half has offset dilution rather than shrunk the company.
Adjusted Net Income per Diluted Share by fiscal year, from Aritzia’s Q4 and full-year Management’s Discussion and Analysis for each year, page 6 (Selected Consolidated Financial Information), on the definition of Adjusted Net Income that preceded the first quarter fiscal 2027 restatement. The first-half fiscal 2027 figure is from the Q2 fiscal 2027 earnings release, page 4.
Half of fiscal 2027 has banked $2.27 of adjusted diluted EPS against $1.08 a year ago, more than Aritzia earned in any full fiscal year before fiscal 2026.
Two readings of the same release
The stock is down nearly 30% from its June high while the business grew net revenue 43.7% in the half, raised its full-year revenue and gross margin guides twice since the quarterly series began in May, and is buying its own shares at roughly today’s price. The counterweight is in the same release: a second half guided to deliver a fraction of the first half’s margin gain, a worse third quarter SG&A line, and tariffs still on the forward risk list.
So the second-half guide reads two ways, and the release puts management’s assertion of continued momentum on one side of it and its own guided arithmetic on the other. Either the guide is conservative again, as each of the last four quarter-ahead revenue guides proved to be. Or the second half genuinely steps down, and the third quarter SG&A guide is the first line of it. Fiscal 2027 is the final year of the “Fiscal 2027 Strategic and Financial Plan, Powering Stronger” that Aritzia set out on October 27, 2022, and the plan that follows it gets set at the Investor Day on October 27, 2026.
Disclaimer: The content on bestcanadianstocks.ca is for informational and entertainment purposes only and does not constitute financial advice. Past performance is not indicative of future results. Always consult a qualified financial advisor before making investment decisions. Aritzia’s figures, guidance and quotation come from the company’s own Second Quarter Fiscal 2027 earnings release of October 8, 2026, covering the 13 weeks ended August 30, 2026, with page citations held in our extraction. The year-ago comparatives come from its Second Quarter Fiscal 2026 release dated October 9, 2025. The earlier fiscal 2027 guidance, the quarter-ahead guides and the second-quarter gross margin series come from Aritzia’s own Q4 and Fiscal 2026, Q3 Fiscal 2026, Q1 Fiscal 2027 and prior Q2 releases, and the five fiscal year earnings chart from its Management’s Discussion and Analysis for fiscal 2022 through fiscal 2026. Fiscal 2024 was a 53-week year. The Supreme Court holding is quoted from the slip opinion in Learning Resources, Inc. v. Trump, decided February 20, 2026. Analyst consensus is Yahoo Finance’s and is labelled as consensus with its analyst count wherever it appears. The October 8, 2026 closing price is from StockAnalysis; the 52-week closing high is our own measurement on Yahoo Finance daily closes. Every percentage, multiple and derived figure is our arithmetic on those numbers and is labelled as ours in the article.
