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Lululemon Athletica raised its forecast for annual sales and profit on the strength of sales for its pricey activewear.
Shares gained more than 11% on Friday.
Contributing to better-than-expected quarterly results were an easing of air freight costs and tighter inventory control as well as a strong rebound in China.
The move toward more comfortable clothing and activewear since the pandemic has taken hold with most Americans, especially among a higher-income customer base.
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The corporate logo for Lululemon hangs on a wall at their store in Brookfield Place in New York City. ((Photo by Gary Hershorn/Getty Images) / Getty Images)
“We’ve seen no change in our (customer) behavior in terms of frequency of purchase or engagement,” said Lululemon CEO Calvin McDonald on a post-earnings call.
Lululemon saw inventories rise a smaller-than-expected 24%. The company expects growth of about 20% at the end of the current quarter.
Revenue from China rose 79% helped by the easing of that country’s strict COVID-19 curbs.
North America sales jumped 17%.
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A Lululemon sign is seen at a shopping mall in San Diego, California. (REUTERS/Mike Blake / Reuters Photos)
Net revenue increased 24% to $2 billion, beating estimates of $1.93 billion, according to Refinitiv IBES.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| LULU | LULULEMON ATHLETICA INC. | 365.44 | +37.09 | +11.30% |
Lululemon now expects full-year 2023 revenue between $9.44 billion and $9.51 billion, compared with $9.30 billion to $9.41 billion projected earlier.
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It forecastS annual profit between $11.74 and $11.94 per share, up from $11.50 to $11.72 earlier.
Reuters contributed to this report.
