Aritzia (ATZ.TO) surged 20.98% after an earnings beat of 53.37% as the company posted an EPS of 0.47 which was good for a net income of $43.1 million. Revenue also beat expectations by 4.9% as it came in at $653.5 million.
The surge in shares is surprising because the company suffered higher markdowns in the quarter even though net income for the quarter was the highest of any quarter last year. Aritzia has a long way to go to better manage inventory and create demand internationally if it hopes to continue to grow its semi luxury brand. This 20% spike will likely be retraced somewhat as market participants come back down to earth. It all just seems too much, too soon.
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