aritzia inc shares were down in early trading on thursday after the company reported higher costs and a larger inventory in its third quarter as investors weigh concerns over demand ahead of a potential recession the canadian womens fashion brand said it had 5084 million canadian dollars 3787 million worth of inventory in its fiscal third quarter up from c1769 million a year earlier aritzia said it was comfortable with its new level of inventory a decision which was made to mitigate supply chain risks at a time when it was seeing higher demand for its products the supply chain environment was dynamic and uncertain at the time the company began placing orders for fall and winter product over 12 months ago aritzia said at the time freight timelines were also uncertain but as they improved inventory arrived sooner than anticipated which has led to the yearoveryear increase it said aritzias sales increased 38 to c6246 million better than the c5855 million analysts polled on factset expected the us market saw a sizable increase in revenue jumping 58 to c3135 million in the third quarter representing slightly more than 50 of total revenue in the period gross profit also increased rising by nearly 29 to c2707 million but gross profit margin fell to 433 from 464 a year earlier the company blames inflationary pressures additional warehousing costs for its higher levels of inventory and foreign currency headwinds costs also saw an increase with selling general and administrative expenses up nearly 49 at c1637 million which the company said was largely due to investments in staff but also towards marketing and technology looking ahead the fashion brand said it now expects fullyear revenue in the range of c214 billion to c216 billion up from a prior forecast for revenue of up to c205 billion