The Globe and Mail reports in its Thursday edition that Aritzia's share price has been sliced in half this year as inflation and product markdowns weigh on the retailer's profit margins and earnings. The Globe's David Berman writes that as the company prepares to release its latest financial results, investors are hoping for a turnaround in a tough sector. Aritzia is set to report its fiscal second-quarter results on Thursday after markets close. On July 11, it reduced its full-year outlook for sales and profit margins. In response, Aritizia's share price tumbled 24 per cent, and analysts slashed their 12-month target prices by an average of 30 per cent. Some observers believe that the backdrop for retailers remains challenging. Luke Hannan, an analyst at Canaccord Genuity, expects Aritzia's revenue in the second quarter fell 4.3 per cent compared with the same period last year, while profit margins decline partly as a result of product markdowns. For the full fiscal year, he expects that Aritzia will report a profit of 87 cents a share, down from $1.86 last year. However, Aritizia's brand continues to resonate with young shoppers, especially among U.S. female teens in upper-income families.
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