Canadian fashion retailer Aritzia (OTC:) Inc. reported a second-quarter loss of C$6 million, marking a notable downturn from the C$46.3 million profit made in the same period last year. The results, announced on Thursday, were attributed to elevated labor and project costs, which led to a 16% increase in selling, general, and administrative expenses to C$171.1 million.
In spite of the loss, Aritzia saw a slight revenue increase of 1.6% to C$534.2 million, surpassing FactSet forecasts. However, the company’s gross profit margin experienced a decline of 15%, influenced by the aforementioned rise in operational expenses.
CEO Jennifer Wong commented on the Q2 results on Thursday, attributing the shift in performance to evolving consumer trends and missed opportunities within their new product range.
Despite the challenges outlined by Wong, the slightly improved revenue suggests that Aritzia’s sales performance managed to withstand some of the impact from these factors. The company’s ability to exceed revenue forecasts may indicate a resilience that could be crucial as it navigates through ongoing changes in consumer behavior and market conditions.
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