Aritzia (ATZ.TO), mcap=C$3.3bn, price C$37.66 vs C$44.98

Pitch: Canadian clothing brand with locations in Canada and the US. The upside mainly comes from a successful US expansion to reach similar penetration levels as in Canada. A higher retail presence is also expected to drive e-commerce. Strong brand and execution allowed ATZ to achieve the second-highest sales per sq.ft., only behind LULU.

Valuation: DCF with 50% increase in store count over the next 10 years, gradually improving margins, increasing sales per sq.ft., and 31x FCF exit multiple results in 10%-20% implied IRR.

Exp. gain: 5-year IRR of 8%-20%

Full ATZ.TO write-up (free guest account required):
https://valueinvestorsclub.com/idea/Aritzia/2109884808

Published on: June 2, 2022  •  Published by:
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