Looking for one of the hottest stocks on the TSX? You might want to take a look at Aritzia (TSX:ATZ). The fashion retailer just posted a blockbuster second quarter, and it has rewarded investors with a gain of around 70% so far this year. This incredible run is being fueled by an explosive expansion into the United States and a dramatic surge in profitability.
The company's push into the U.S. is paying off in a big way. Sales south of the border skyrocketed by over 40% and now account for almost 60% of Aritzia's total revenue. CEO Jennifer Wong credited strong demand for the Fall collection, new store openings, and smart marketing for the success. It wasn't just about sales, either; the company became much more profitable. Gross profit margins expanded to 43.8% thanks to better product margins and lower warehousing costs, which helped adjusted net income grow by a staggering 181%.
And it looks like the momentum is set to continue. Aritzia is forecasting impressive revenue growth of 20% to 24% for the third quarter and expects to finish the full fiscal year up by 21% to 22%. The company did mention, however, that it's keeping an eye on U.S. tariffs and changes to duty-free shipping rules, which might slightly trim its profitability outlook for Fiscal 2027.
With its rapid expansion in the massive U.S. market and its proven ability to turn sales into significant profits, Aritzia could be one of the better growth stocks to be holding right now.
