Aritzia Inc.’s CEO said “everything is working” for the company as strong sales, continued growth in the United States and more than one million downloads of its new mobile app helped propel the 42-year-old Canadian retailer to its first ever billion-dollar quarter.

The Vancouver-based clothier reported Thursday that net revenue increased 42.8 per cent year-over-year to $1.04 billion in the third quarter of fiscal 2026, which ended Nov. 30. Net income grew 87.5 per cent to $138.9 million.

Chief executive Jennifer Wong said on a call with analysts that the company’s blockbuster results are owed to the strength of its business and growing brand awareness in the U.S., where net revenue was up 54 per cent year-over-year to $621 million.

Chief financial officer Todd Ingledew said U.S. square footage grew by 30 per cent during the quarter. The company now has 72 boutiques south of the border — more than half of its total store count — and its American business makes up nearly 60 per cent of overall net revenue.

Wong said Aritzia plans to open four new U.S. locations during the next quarter and still has room to grow. Over the long term, she said the company sees potential for 180 to 200 stores or more.

“In Canada, we’re very well-known and loved, and our goal was to achieve that same level in the U.S., and I think we are well on our way,” she said.

Canadian net revenue increased 29 per cent to $419 million, “a level of growth never seen outside the pandemic periods in the rest of (Aritzia’s) life as a public company,” CIBC Capital Markets analyst Mark Petrie said in a note.

“We believe this validates the thesis that not only is Aritzia getting famous in the U.S., but it is also executing at an exceptionally high level in all facets,” he said.

Retail net revenue grew 35 per cent to $657 million on the back of strong sales in new, expanded and existing boutiques.

Comparable sales, a retail industry metric that includes e-commerce and established stores that have been open for more than a year, increased 34 per cent.

“Most importantly, Aritzia’s comparable sales were boosted by traffic, a more healthy and sustainable metric than price increases,” Stifel Nicolaus Canada Inc. analyst Martin Landry said in a note.

Investments in marketing and the launch of Aritzia’s mobile app in late October helped boost e-commerce net revenue, which grew 58 per cent to $383 million. Wong said the app has been “wildly successful” and received 1.4 million downloads to date, beating expectations for the entire first year.

Ingledew said gross profit margin expanded 30 basis points to 46 per cent during the quarter, and that 410 basis points of pressure related to U.S. tariffs and the elimination of the de minimis exemption was “more than offset” by leverage on fixed costs, improved markdowns and freight tailwinds.

The de minimis loophole, which ended Aug. 29, allowed packages valued at US$800 or less to enter the U.S. duty-free. Aritzia moved fulfilment of all American orders from Canada to its Ohio warehouse ahead of the change and plans to invest in a second U.S. distribution centre.

Ingledew said the percentage of clothing Aritzia sources from China is in the mid-single digits, compared to 30 to 35 per cent at this time last year.

“We are more weighted now to Vietnam and Cambodia, as well as a number of other countries, but next phase is to balance more evenly and get to a position where we have no more than 20 to 25 per cent sourced from any country,” he said.

Based on strong momentum that included record-breaking Black Friday sales at the end of the quarter, Ingledew said Aritzia expects revenue for the fourth quarter to be in the range of $1.1 to $1.125 billion, an increase of 23 per cent to 26 per cent.

The company reported $620 million in cash, no debt and no money drawn from its $300 million revolving credit facility. With a “growing cash balance,” Ingledew said the company plans to revisit its capital allocation strategy and will continue to “opportunistically” repurchase shares under its stock buyback program.

When asked about where Aritzia is seeing the most traction internationally, Wong said there’s interest in English-speaking countries such as United Kingdom and Australia and central European and Asian markets such as Germany, Switzerland and China.

She said online orders outside of Canada and the U.S. represent just one per cent of Aritzia’s online business, but sales through the company’s international e-commerce site more than doubled during the quarter compared to the same period last year.

“We’re gaining lots of good information for future expansion of the Aritzia brand,” said Wong.

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