This is the conference operator. Welcome to Aritzia's third quarter fiscal year 2022 earnings call. As a reminder, all participants are in listen-only mode, and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star and zero. I will now turn the conference over to Carly Bishop, Executive Manager, Office of the CEO. Please go ahead.
Thank you, Carl, and thanks for joining Aritzia's third quarter fiscal 2022 earnings conference call. On the call today, I'm joined by Brian Hill, our Founder, Chief Executive Officer, and Chairman. Jennifer Wong, President and Chief Operating Officer, and Todd Ingledew, our Chief Financial Officer. Following management's discussion, we'll host a question and answer period open to analysts and investors. Please note that remarks on this call may include our expectations, future plans, and intentions that may constitute forward-looking statements. Due to the material impact of COVID-19 on business operations in fiscal 2021, certain references to our pre-pandemic results in the third quarter of fiscal 2020 have been included where management deems to be a more meaningful measurement of performance. The uncertain and dynamic nature of COVID-19 and its ongoing impact could continue to materially alter our performance.
We would refer you to our most recently filed management discussion and analysis and our annual information form, which include a summary of the material assumptions as well as risks and factors that could affect our future performance and our ability to deliver on these forward-looking statements. Our earnings release, the related financial statements, and the MD&A are available on SEDAR and the investor relations section of our website at aritzia.com. I will now turn the call over to Brian.
Thank you, Carly. Thank you all for joining us this afternoon. Happy New Year. I'm excited to share alongside Jennifer and Todd our results for the third quarter of fiscal 2022. In Q3, our business continued to surge, surpassing our own high expectations across all geographies and all channels. In the United States, we saw our business further advance at an unprecedented pace. In addition, our entire e-commerce channel sustained its exceptional growth momentum, and retail in both countries flourished, with all boutiques open for the entire quarter for the first time since the start of the pandemic. Our exceptional performance in Q3 and throughout fiscal 2022 has not come without challenges. Our world-class team and their unwavering commitment to excellence and teamwork have enabled us to successfully navigate the ever-changing landscape of the pandemic and the many obstacles that have come with it.
For this, I could not be more grateful and proud. As we set our sights on the future, we have extraordinary opportunities ahead of us. We are working hard to deliver on significant demand increases while managing the global headwinds of the pandemic, supply chain disruptions, labor shortages, and health and safety protocols. We remain focused on our fundamentals to sustain our growth and delivering our much-loved everyday luxury experience to our expanding client base while we continue to purposefully invest in the infrastructure required to scale for years to come. While Todd will provide you with a detailed perspective on our Q3 financials, I'm very pleased to share our performance highlights for the quarter.
In Q3, we delivered net revenue of CAD 453 million, with growth of 63% or CAD 175 million from last year and growth of 70% or CAD 186 million from two years ago. In the United States, our business has further accelerated at an unprecedented pace. Net revenue increased 115% from last year and 116% from two years ago, accounting for 44% of our revenue in the quarter. On a particular note, we have almost doubled our active U.S. client base over the past trailing twelve months. Our e-commerce channel sustained its exceptional momentum as net revenue increased 47% from last year and 162% from two years ago, accounting for 33% of our revenue in the quarter.
Our retail business flourished, with boutiques delivering sales growth of 72% from last year and 45% from two years ago, with comparable sales exceeding pre-pandemic levels in both Canada and United States by 26%. This manifested itself in adjusted EBITDA growing to CAD 109 million, growth of 100% or CAD 55 million from last year. We fueled our surging e-commerce business by further enhancing our digital everyday luxury experience. Beyond optimizing aritzia.com with new and improved features and functionalities across personalization, product discovery, digital gift cards, and checkout, we brought our clients an elevated outerwear experience and launched superworld.com, a new immersive branded digital experience to complement our Super World pop-up boutiques. In addition, our omni capabilities initiative is also meaningfully growing in adoption. Jennifer will speak to this shortly. Our retail business continued to exceed our own optimistic expectations.
In addition to operating all of our boutiques for the first time since the start of the pandemic, we continued to expand our presence in the United States. We opened a new boutique in Nashville, Tennessee, and expanded four additional boutiques with our Troy, Michigan expansion, breaking opening day and opening weekend sales records. That being said, the strength of our boutique network is our people. They bring our much-loved everyday luxury experience to life with each and every client interaction. Despite shortages in the labor market in both Canada and United States, we significantly expanded our team this holiday season to ensure every client's needs were fulfilled.
Our world-class team not only drove tremendous success throughout the quarter, but delivered record-breaking results during our Black Fiveday Event, as almost half of our boutiques, including every single one of our 37 U.S. boutiques, achieving their top sales day in their history. Shifting gears to product, we saw an outstanding client response to our fall/winter collection. We extended our assortment depth by making strategic investments and expanding key programs with new lengths and sizes, bringing more of our most loved beautiful products to new and loyal clients. At the same time, further headwinds as a result of the pandemic's resurgence resulted in meaningful supply chain disruptions taking shape in the form of factory closures, reduced production efficiency, and ongoing shipping delays.
Our product and supply chain teams continued to work hard to mitigate these challenges through our geographically diverse supply chain, strategic inventory management, and the increased use of expedited freight. Jennifer will also touch on this shortly. In marketing, we effectively reached new and loyal clients by delivering captivating communications through brand and feature-focused product campaigns that seamlessly translated across all channels for our launches of fall/winter and Super World, as well as our Black Fiveday Event. I will now turn it all over to Jennifer Wong.
Thanks, Brian, and good afternoon, everyone. Our operations supported the strong momentum of our business through an incredible third quarter and holiday season. We were all hands on deck to maximize our sales across all areas, setting us up for overwhelming success and exceeding all performance expectations. This is a testament to our world-class team and operations, both of which continue to fuel our growth. Today, I'll update on four areas within our operations and our lead up to the holiday season. First, our supply chain, second, our digital infrastructure investments, third, our talent landscape, and finally, our progress on ESG. Throughout the quarter, we continued to face pandemic-related global supply chain disruptions head on. Like many in the industry, this included COVID-related factory closures until mid-October and reduced shipping capacities resulting in increased cost.
Despite the production disruptions, freight delays, and port slowdowns, we successfully navigated these challenges and remain in a solid inventory position to keep up with the high demand. In particular, our product and supply chain teams worked tirelessly to proactively manage and mitigate these industry-wide headwinds through continued geographic diversification, strategic inbound inventory management, and the use of expedited freight. On the outbound side, thanks to our strong partnership with FedEx, we also achieved record service levels. E-commerce orders were expedited to clients, and we kept up with the unprecedented demand. All of these efforts kept us well-positioned to sustain our sales momentum, especially heading into the holiday, and will remain contributing factors as we continue to invest in delivering strong results going forward. I'm extremely proud of our teams for their perseverance and adaptability.
They are doing a phenomenal job. Moving to our talent landscape going into Q3, the availability of labor remained extremely challenged in both the U.S. and Canada. In the lead up to the holiday period, the strength of our employer brand, targeted acquisition strategies, and competitive wage offerings enabled us to successfully attract and hire the talent we needed to build our seasonal teams across retail, concierge, and the DC. We continued our ongoing investments in talent across the business. In particular, we added global luxury experience and expertise to our creative team. This will be key as we continue to elevate our brand through innovative and beautiful product design and deliver on everyday luxury. As our teams grow, we continue to prioritize and invest in our people, operating with an industry-leading health and safety program. This includes best-in-class testing and screening frequency and diligent contact tracing.
Most recently, in close partnership with government health authorities, we launched a vaccine clinic in Toronto for 1,400 of our people, plus their friends and families and our partners. We know that every decision we make during this time impacts our community as a whole, and we'll keep navigating the uncertainty of COVID-19 with agility and care. We're certainly not alone in the impact being felt across the industry caused by the Omicron variant and the pressure it has imposed. While we cannot predict the future, we are doing everything within our control to mitigate its effects. The depth of a dedicated team, together with our best-in-class processes, and our ability to mobilize and pivot in the moment have effectively powered us to operate with minimal disruption so far.
Despite all of the pandemic-related disruptions, we saw a record order and sales volume across all channels this holiday season, particularly during Black Friday and Cyber Monday. Our distribution team delivered exceptional performance yet again as we topped our record for most e-commerce orders processed, not just in a single day, but in a single hour. Our concierge team kept pace through our event period, having handled over 126,000 client interactions while achieving improved response times and increased sales results. These results demonstrate that once again, our best-in-class infrastructure is the backbone for success in our ability to handle substantially higher volumes. We have a world-class team, and we remain committed to developing our next generation of leaders and recruiting top talent to Aritzia, especially with the outlook for significant growth ahead.
Turning to digital infrastructure, in Q3, we remained focused on our fundamentals and strategic infrastructure investments required to scale. We continued to enhance our technology infrastructure to support our accelerating e-commerce business. We launched digital gift cards, giving our clients another way to purchase gifts seamlessly this season. We also implemented site feature and functionality optimization and personalization, product discovery, and checkout to elevate our digital experience. As noted on our last call, we launched Store Inventory Visibility, known as SIV. By giving our clients the direct ability to locate the product they want, we've not only increased traffic to our stores, which has translated to a meaningful lift in sales, we have also increased the capacity for concierge to focus on higher value inquiries. Sharing our progress on ESG, Aritzia remains steadfast in our ongoing commitment to people and the planet.
We're making encouraging progress in our promise to exclusively source Forest Stewardship Council certified or recycled content paper packaging. Including our holiday packaging this season, we are close to reaching our goal of producing all of our boxes, tissue paper, e-commerce, and retail bags entirely with sustainable or certified materials. We know that being responsible is fundamental to fully delivering everyday luxury, and we continue to advance our ESG agenda. I encourage you to visit our investor relations page on aritzia.com to learn more about our sustainability commitment and how far we have come in our fiscal 2021 ESG executive summary. Finally, with the grateful support of our people and our loyal clientele, we are proud to continue giving back to our communities where we live and work through financial and product donations to Aritzia community partner organizations across the U.S. and Canada.
This holiday season, we celebrated GivingTuesday, a global day of giving, with a commitment to donate CAD 10 of every purchase that day. We are pleased to share we reached our CAD 250,000 donation goal. We also donated 4,000 warm winter coats valued at over CAD 1 million. We remain committed to being responsible as we continue to make a meaningful, positive impact toward the well-being of our people and the planet. With the busiest season behind us, we remain focused on enabling growth through strategic planning and initiatives for the future.
This includes formalizing our multi-year business strategy, which we look forward to sharing with you in the next fiscal year. In closing, I would like to thank our entire team for their hard work, unwavering dedication and resilience in delivering another extraordinary quarter. I'm tremendously proud of the outstanding results we continue to achieve together. I'll now turn the call over to Todd to discuss the financial results.
Thanks, Jennifer, and good afternoon, everyone. Our exceptional performance in the third quarter exceeded even our high expectations. We delivered another record quarter of both top and bottom-line results, reflecting our growing brand affinity in the United States and the strength of our e-commerce business. What makes these results so remarkable is that they were accomplished with the backdrop of ongoing supply chain disruptions and labor shortages. For the third quarter, we generated net revenue of CAD 453 million, an increase of 63% or CAD 175 million from last year, and 70% or CAD 186 million from two years ago. This exceptional performance is driven by the following.
First, we continue to see outstanding growth in the United States, with net revenue in U.S. dollars of $159 million in the quarter, growing 126% or $88 million from last year, and 128% or $89 million from two years ago. Our business in the United States comprised 44% of net revenue, up significantly from 33% in the third quarter last year. The sustained momentum in our U.S. business is reflective of the significant acceleration in our U.S. client base, which has nearly doubled in the last 12 months as more and more clients discover the Aritzia brand. Second, our e-commerce business delivered another strong quarter with net revenue of CAD 148 million, an increase of 47% on top of the 79% increase in the third quarter last year.
The increased demand for our product manifested in both higher traffic and conversion during the quarter. E-commerce penetration was 33%, up significantly from 21% in the third quarter two years ago. Third, retail revenue in the third quarter was CAD 305 million, an increase of 72% or CAD 128 million from last year, and 45% or CAD 94 million from two years ago. This remarkable growth was driven by both comparable sales and new and repositioned boutiques led by the strength in the United States. Retail comparable sales growth of 58% from last year and 26% from fiscal 2020 pre-pandemic. It was driven by both double-digit comp growth in Canada and the United States.
We delivered gross profit of CAD 210 million, up 67% from CAD 126 million in the third quarter last year. Gross profit margin was 46.4% in the quarter, expanding 110 basis points from 45.3% last year. When compared to fiscal 2020, our gross profit margin expanded to 170 basis points. The improvement in gross profit margin exceeded our expectations with higher leverage on occupancy costs and lower markdowns, more than offsetting the expected, significantly higher expedited freight. SG&A expenses in the quarter were CAD 110 million or 24.3% as a percentage of net revenue, compared to 26.8% last year. The 250 basis point improvement was primarily driven by leverage from increased revenue.
When compared to fiscal 2020, our SG&A as a percent of revenue increased by 30 basis points. The increase was primarily driven by continued investment in talent across e-commerce, marketing and IT to support the ongoing and future growth of our business. Overall, adjusted EBITDA in the third quarter was CAD 109 million, an increase of 100% from CAD 55 million last year and 87% from CAD 58 million two years ago. Adjusted EBITDA margin was 24.1%, expanding 19.6% from last year and 21.9% from two years ago. The expansion in adjusted EBITDA margin is a testament to the strength of our business and our ability to drive profitable growth despite significant headwinds. Inventory was CAD 177 million at the end of the quarter, up 28% from last year.
Throughout the quarter, the team did an outstanding job managing inventory levels to deliver our revenue growth in a challenging environment. We ended the quarter with CAD 306 million of cash and zero drawn on our CAD 175 million revolving credit facility. We continue to generate significant cash flow and have a strong balance sheet. With this in mind, we announced the implementation of a normal course issuer bid to repurchase and cancel up to 5% or CAD 3.7 million of our subordinate voting shares. Our number one priority for capital allocation will always be investing in the growth of our business. However, having an NCIB facility in place allows us to buy shares opportunistically and offset the dilution of option exercises over time. Turning to our outlook.
We expect net revenue for the fourth quarter to be in the range of CAD 375 million-CAD 400 million, representing a 40%-50% increase compared to last year. This reflects the robust client demand and continued strength of our business throughout the entire holiday selling season. Since the beginning of January, we have seen revenue pressure due to our third quarter and holiday sales exceeding expectations and correspondingly resulting in meaningfully lower end-of-season sale inventory. That said, our business in the United States remains strong, and we are well-positioned for the launch of our exciting new spring collection in February.
For the full year, we are increasing our outlook and now expect net revenue to be in the range of CAD 1.425 billion-CAD 1.45 billion, with the top end of the range up CAD 150 million from our previous outlook. The updated outlook implies a full year revenue increase of approximately 65%-70% from fiscal 2021. We expect gross profit margin improvement seen in the third quarter compared to pre-COVID-19 levels in fiscal 2020 to be similar in the fourth quarter. This reflects leverage on fixed costs and lower markdowns offset by ongoing meaningfully higher expedited freight costs.
We expect the increase in SG&A dollars seen in the third quarter compared to pre-COVID-19 levels in fiscal 2020 to be similar in the fourth quarter, driven by continued investments in people, processes, and technology, in addition to variable costs related to our sales growth. In summary, we are extremely pleased with the strength of our business, particularly with our growth in the United States and the momentum of our e-commerce business. With our strong balance sheet, we will continue accelerating investment in our strategic initiatives and infrastructure. We are confident we are well-positioned to maximize the opportunities ahead to drive profitable growth and deliver meaningful shareholder value. With that, I'll now turn the call back to Brian.
Thank you, Todd. We're excited for the road ahead. We carried our exceptional demand and strong performance into Q4 and throughout the entire holiday season. However, with our third quarter and holiday sales significantly exceeding expectations, resulting in meaningfully lower end-of-season inventory, we have seen revenue pressure since the beginning of the new year. Despite this, as Todd mentioned, our business in the United States remains strong across retail and e-commerce. In the fourth quarter alone, we are expanding our boutique network, including new boutiques in Las Vegas, Washington, D.C., technically Virginia, Columbus, and Miami. In Canada, however, growth in both retail and e-commerce is being affected by Omicron-driven restrictions. That said, despite these headwinds, we're well positioned for a launch of our exciting new spring collection in February.
As we set our sights on fiscal 2023, our business has never been stronger or better positioned for growth. The foundation our team has built over the past 37 years continues to empower our ability to deliver our much-loved everyday luxury experience of engaging service, beautiful product, aspirational environments, and captivating communications for new and loyal clients across all geographies and all channels. As I reflect on our brand acceleration, new client acquisition, and the performance of our business, particularly in the United States, I see extraordinary opportunities for Aritzia. While for us, having a laser focus on our fundamentals has proven to be successful, our accelerated momentum also opens significant opportunities to further expand our footprint.
We will continue to drive digital innovation of our e-commerce channel and omni capabilities, grow our boutique portfolio, expand our product assortment, and acquire new clients, all while continuing to strategically invest in our infrastructure and growing our team of world-class talent. As our business continues to accelerate beyond our own high expectations, so does the incredible support of our clients and our people. I am deeply grateful for our team's constant agility, dedication to excellence, and tireless hard work that are propelling us towards our goals and for our clients' enduring loyalty. I could not be more excited about the road ahead. We're just getting started. Thank you for joining us today.
Thank you. We will now begin the question and answer session. To join the question queue, you may press star then one on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star then twH. The first question comes from Mark Petrie of CIBC. Please go ahead.
Yeah, good afternoon, and congrats on the results. Obviously, the U.S. momentum remains exceptionally strong. I know your strategy is consistent and stores are the primary marketing tool, but what other vehicles do you believe are drawing so many new people to the brand?
I'll take that. Thanks for the question, Mark. Welcome. You know, we're experimenting with a little bit of digital marketing, not a lot. You know, we did have some influencer activations culminating with J.Lo did a little favor for us towards the end of the year. But you know, realistically, I think it's our stores. I mean, our stores are busy. We have busy stores. Anecdotally, everywhere we go and everything we hear, you know, like, we walked in. I was in Manhattan about five weeks ago checking on the stores, and I mean, I had to wait five minutes to get out into SoHo or two minutes to get into SoHo, and we didn't even have a line up or a queue.
That was the first thing I did when I went inside. I mean, we're busy. You know, I think we're the place to shop right now in the United States, and can't wait till we get opportunities to continue to open stores. It's an omni experience, an omni shopping experience. The stores are fueling our fame. They're making us famous. Our e-commerce channel is facilitating a lot of these sales now. You know, as I've said before, when things are this good, typically it's not one thing that you're doing right, there's a lot of things you're doing right and a lot of things are working. You know, we don't expect it to always be the case, but right now everything seems to be working.
Yeah. Okay. I know you've been investing in your social media marketing capabilities, but is it fair to assume that you still see that as a continued lever for supporting this type of growth?
I mean, anybody who's not using social media right now, and comes in all sorts of forms, and every time we turn around, whether it be TikTok or something else is new along, you know, as you roll through. You know, everybody's engaging in social media, some more than others, and we're probably doing it a lot less than others. That said, from an investment perspective, organically, we're using our channels to leverage as much as we possibly can right now. We're building a team, and we look to be doing more of it in the future. You know, I think it certainly has helped us here, but I wouldn't say it's underpinned our growth here at the same time.
Yeah. Understood. Could you just talk about where you're at on your goal of doubling SKU count over five years and maybe the performance of the extensions that you've executed on so far and what the sort of roadmap is over the next 12 months?
I think we're probably 50% of the way there right now. That said, we've got the easy part of the 50%, adding sizes, adding colors, things like that. The heavy lifting is still to come. I think you'll see us launch lingerie and swim or intimates and swim this year. We also have some new collections we need to launch, and we're still in the building phases there. No time limit on those, but those will certainly contribute to our goal. I think we're 50% of the way there. That said, we've completed all the easy things now.
Okay. Just one more, if I could. Obviously, there's lots of moving parts on the cost side, at both, you know, investing to support growth, but also, external, be it labor or supply chain. What's your sense on price increases in the coming year? What are your expectations for product margins, you know, outside of any, you know, gross margin impacts from things like category or promotional mix?
We're hoping that the growth of our U.S. business will offset inflationary pressures of both the cost of goods that we're selling and the labor or the logistics of getting our product there. Don't know if they will, but certainly, as you can see by our numbers, we've already been dealing with meaningful logistics increases. We don't see them increasing much more because we don't see us needing as much expedited freight as we have this year, hopefully, now that we know what we know. That said, we do expect more inflation to come along in both raw materials and labor and therefore finished goods. But we have a natural arbitrage built in with our increasing mix of U.S. business. We're hoping they will offset each other. Up to this point in time, it's done a good job of that.
Appreciate all the comments, and all the best.
Thank you.
The next question comes from Lorraine Hutchinson of Bank of America. Please go ahead.
Thanks. Good afternoon. Just wanted to follow up on that pricing question. You know, there seemed to be inflation in various areas of the business. Would you consider a price increase, you know, if some of these transportation headwinds persist longer than expected and combined with raw material costs to really increase the cost of goods upwards of what it's done recently?
I mean, we always discuss it and debate it, but until we see our margins eroding, we don't see any need to put our prices up. We don't wanna be, you know. I was taught at a very young age, there's two ways to go bankrupt, being stupid and being greedy. We try not to be either, or we try to be neither. I think it's important that we're giving our customers and continuing to give them value. Until we start seeing erosion of our margins, we don't see any reason to put our prices up.
Believe me, this debate happens all the time, and I'm usually the one at the end of the day saying, you know, holding still and just saying, "No, until we see this pressure, we're not gonna put our prices up." Up to this point in time, if nothing else, we've seen our margins increase due to more mix of U.S. dollars and less sale inventory, less sale activity due to sell-throughs at full price. You know, then on top of that, as I mentioned, we did make a concerted effort to be on sale less and have been working and successfully executing these numbers, these incredible numbers we're sharing with you today with less sale activity as well.
We're gonna continue to try and shrink the windows of off pricing. From a time perspective, we're gonna try and shrink the amount of product we're selling off price, which both indirectly increase your margins. We're gonna continue to see growth in the United States and in U.S. dollars, which are gonna help our margins. Hopefully these will all continue to offset these inflationary pressures.
Thank you.
The next question comes from Stephen MacLeod of BMO Capital Markets. Please go ahead.
Thank you. Good afternoon, and congratulations on a great quarter. Just have a couple of questions. Just maybe starting high level. Given the strength that you've seen over the last two quarters and actually through the pandemic, you know, how has your view of the market opportunity changed over the last sort of six months or 12 months?
Well, it hasn't really changed. We've been very bullish on our opportunities in the United States for quite some time. You know, the whole idea of international keeps on coming up, but we have such an incredible runway ahead of us in the United States. We're already set up there, building lots of stores there, have relationships with all our partners there. It's just so much easier and with lots of runway ahead of us. It doesn't mean we're ignoring our international or we haven't been, but certainly our focus has been in the United States. You know, we're going to probably gonna get a little bit more aggressive as far as store openings.
I have said on previous calls that you know we've run out of runway to some degree in Canada, and so we'll see more of those new stores shifting into the United States. We've already seen that. As I cited, the four new store openings are all in the United States. You know, I see us opening sort of one store a year in Canada, and there's lots of stores in the United States. I mean, I was looking at a competitive retailer today that has 901 stores in the United States. I think we have 40. You know, we got a long way to go here and, you know, don't worry, we're not opening 900 stores in the United States. You know, I think that, we're just gonna continue doing what we're doing.
It seems to be really good thing. Where we don't have stores, our e-commerce, our incredible e-commerce channel is picking that up. You know, we've done some projections, and if things just continue the way they've been continuing, we're gonna have our hands full keeping up with this growth for several quarters and many years to come. We're just gonna keep on going at the same rate we are now.
Okay. That's great. I guess maybe ask separately different way. Sorry. How many stores do you think you can have in the U.S., or is that a target that is, you know, so far out you don't even think about the, you know, the ceiling necessarily?
There's very few things we don't think about here at Aritzia, so we certainly think about that. You know, it depends, and we had our board meeting yesterday, and we were discussing that as we usually do. You know, it's hard to say because it really depends on your volumes your stores are doing. You know, we have stores and, you know, you're familiar with what we have in Canada and, you know, we have some stores that are close by to each other, just because the stores get really busy. You know, we're gonna be in the same situation in the United States.
You know, as your stores get busier and busier, there's all of a sudden where you didn't think you would need a store or put a store, you all of a sudden do need one because the existing store is too busy and doesn't fulfill the sort of the everyday luxury experience that we're trying to achieve. You open a new store to take the pressure off those stores, and we're starting to see that more and more in the United States. Sort of markets and stores that we were looking at two years ago thinking this is a one store market, we're looking at thinking, "Well, maybe it's not. Maybe it's a two or three store market." We'll see. I mean, the number's north of 100 for sure, and we'll go from there. You know, you can solve as well by opening bigger stores.
You know, that's something that, you know, people that have been following Aritzia for five, 10, 15, 20 years have noticed that our stores are getting bigger and bigger. The real estate isn't always available to open up bigger stores, but that's what all our repositionings are all about is opening up bigger stores. We're gonna continue to do that as well. You know, we're super excited that retail. You know, a year ago, a year and a half ago, you know, retail was on its deathbed, and to say it, but maybe I'm getting a little ahead of us, but retail is back, and it's certainly back at Aritzia, and you can see by our numbers it's back. That's what we do. We're good at e-commerce, we're great at e-commerce, but we're great at retail, too. We're certainly gonna take advantage of...
The next question comes from Dylan Carden of William Blair. Please go ahead.
Great. Thanks a lot. So I kind of perked up. I think you'd mentioned that the Troy, Michigan store opened to sort of record performance. I'm just curious now talking about stores in sort of suburban Virginia, you know, as you're in these markets that aren't sort of more of your classical downtown urban markets, are you kind of seeing greater performance in suburban mall-type locations? Thinking about some of the more recent openings and the accelerated openings, can you just kind of give us a sense of what type of stores those will be or will be kind of more of a mix like your current portfolio?
Yeah, I'm gonna take that 'cause our real estate department reports into me. You know, we're still in the top shopping center. Somerset Mall in Troy, Michigan, is one of the top shopping centers in the United States. When we're opening in rural Virginia, it just happens to be a 20-minute drive from D.C., and Tysons Corner is the name of the shopping center. It's one of the top shopping centers in the United States as well. Listen, the United States is a big place, and as you know, that's where you're from. There's a lot of credible shopping districts, some you know, shopping centers, some street front locations that we still don't have stores in, lots of them. We're gonna continue to push those things through.
You know, we don't really look at it as rural or urban. We seem to be doing incredibly well in both. We seem to be doing incredibly well, both street front and shopping center. What we're just looking for is some of the best shopping destinations, and that's how we look at it. We don't really look at it rural or urban. We don't really look at it enclosed or street front or open air. We look at it as shopping destinations, and that's where we focus, is being in the best shopping destinations both in Canada and United States and maybe one day internationally. We're gonna continue along that as far as our strategy is concerned.
Okay. Fair. On superworld.com, it's kind of a different strategy than you've taken with some of your other brands. I'm just kind of curious if there's anything to comment on there as to sort of what you might be testing or why you felt the need to kind of spin that off as a separate online presence, if they're sort of laying the groundwork for maybe bigger growth?
Yeah, I mean, I think when we get a big product that's important and has its own DNA, that it's important it has its own website and its own stores and everything else. I mean, our store in New York and our store in L.A., they're incredible shopping experiences for our Super World. If it makes sense to be opening up brick-and-mortar stores, it also makes sense to be opening up online stores specifically for that experience, and that's what we're doing. We're able to cater and shape the brand as we see it with that brand both online and in the stores and not getting sort of not necessarily buried, but certainly not in the forefront of Aritzia, which is promoting Aritzia and wide breadth of product we have that the customers expect.
You know, we've done this. It was successful. It was a lot of work, and we're gonna evaluate whether or not we're gonna continue to do that or not, when we sort of in the next few weeks as we sort of analyze the benefits of it versus the agony, as they say. It was very successful, but it was a lot of work on the teams, and so we're gonna assess if this is something we're gonna continue to do with the plethora of products that we have that our clients are chasing after that are holding their own right. We'll see what happens there and go from there.
Got you. Then the last one I had was just a point of clarification, maybe Todd or. The guidance, I'm just curious what that reflects as per, and excuse the Yankee here not fully knowing what the restrictions are in Canada. If the guidance kind of envisions or what kind of restrictions or store limitations the guidance envisions, I guess maybe the way to ask it.
It envisions our current operating conditions that we're under. Right now, obviously
And run-
What's that?
Run through to-
It runs through this full quarter.
To the end of February. Yes, exactly.
It's not just the conditions. I mean, you drive around now. I mean, I was lamenting at one point in time how great it was driving around the city with COVID, when COVID and all the restrictions were on because you could get everywhere. Then, you know, all the restrictions let off. Everybody's going back to the office, and, you know, you're stuck in traffic jams again. You drive around the cities again back in Toronto and Vancouver and Montreal, you know. There's curfews in Montreal. Toronto is completely shut down right now, restaurants and everything else, I believe. Vancouver has severe limitations, not so much on retail, but restaurants and things like that too.
We've rolled the clock back, sort of. It's the tightest it's been in quite some time. It's not just the actual restrictions themselves, it's the people and the mojo of the people and how much they're interacting, going out and things. The footfall is noticeably down everywhere in Canada. Certainly people are not buying things to go out again and things like that because they're just not going out. You know, it's not quite the same as the initial lockdowns we had two years ago, but it's a lot closer to that right now in Canada than it was six months ago, I can tell you that.
The next question comes from Derek Dley from Canaccord Genuity. Please go ahead.
Hi. Thanks and congrats on just another really strong quarter. Perhaps Jennifer, this one's for you. Just as it relates to the expedited shipping or the air freight that you've been using, have you found that that's become at all more competitive and have you been able to lock in contracts, you know, to guarantee some space there for the coming year?
Our logistics team, you know, I think I gave kudos to them the last quarter, but I should give kudos to them again this quarter. They have done a phenomenal job of partnering with our freight forwarders and the transportation companies. When it comes to air freight, it usually is just about who's willing to pay the high, you know, the price. They've been able to make sure that, when they're obtaining quotes that, we're first and foremost on the top of the minds of the airlines and the freight forwarders and getting the space which is most important to us and being prioritized for that is what they've been able to do.
I think again, it really comes down to our people and just how well of a job they've done in terms of navigating through this and working through the system. You know, expedited freight for us also includes with the sea freight that we've done. We did negotiate a contract for premium space on the ships when we chose to use the sea freight. I think, you know, if there was. If anything could have been done, they did it or arranged for it.
Okay. That's helpful. Just coming back to this comment on labor and talent. In regions, you know, where the brand is newer or cities in the U.S. where you're, you know, you're just opening your first store, how are you finding your ability to recruit talent in those locations?
Well, there's the obvious that we're newer to the market, but one of the other things that I cited was our competitive wage offerings, and it is plural because we do have a number of different things that we do in order to be competitive in those markets where our brand might be lesser known. You know, at the same time, when we're populating those stores in the newer markets, it's a hybrid of people from the market as well as veterans from our, you know, other locations that we bring in so that we can cultivate the culture within the stores and make sure that all of our operating philosophies and practices and standards are brought to that store.
Generally speaking, as Brian mentioned in his remarks, we are way more famous, particularly in the U.S., than we have been in the past. I do think because of the proliferation of social media and our e-commerce business that we're way better. We're, you know, we're getting famous and we're way more famous than we were in the past, so that's helped.
Okay, great. Thank you very much.
The next question comes from Meaghen Annett from TD Securities. Please go ahead.
Thanks, good afternoon. Just going back to the potential for international expansion, understandably, you are capitalizing on your success in the U.S. right now, but is international something that we can expect an update on when you provide your midterm outlook? If you could just update us on, you know, when we can expect you to communicate that outlook.
As I said, we're working. You know, we'll formalize that and share that with you. I did say in the next fiscal year, so next year, and maybe at the earliest next quarter. But we'll let you know. Certainly international is contemplated. I mean, every year when we sit down to do our corporate planning, we're looking at all of our opportunities, and prioritizing what makes sense given the upside and, you know, and what's going on in the environment at the time. So we've got lots of things to talk about. The good news is, and the hard thing is, that we have no shortage of opportunities, that's for sure.
The hard part will be about prioritizing all of these things and doing it in a way that continues with this phenomenal and sustainable growth. I won't set a date right now, but we do promise you that we will be sharing that in the coming months.
Thank you. Just with regards to the SG&A outlook for Q4, could you detail the main drivers behind that growth? Going forward, should we expect that rate of growth to continue or perhaps for how long?
For Q4, as I said, the dollar growth that we saw in Q3 versus FY 2020 will continue in Q4, and it's driven by the same thing that it's been driven by for the last couple of years, which is ongoing investment in our primarily marketing, IT, and e-commerce teams within SG&A. Investment in growing our teams to support and drive the growth that we're seeing. We would expect that will continue, that investment will continue as we grow the business. You know, I think over time, as our e-commerce business continues to become a larger portion of our mix, we will see leverage on SG&A as you know, obviously a large part of our SG&A is our variable costs in the stores, and so the e-commerce revenue directly levers that. So inherently we will see leverage over time, but you know, we will be continuing to invest.
Thank you.
This concludes the question and answer session and today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.