A Lululemon sign is seen at a shopping center in San Diego, California, November, 23, 2022.
Mike Blake | Reuters
Lululemon on Tuesday reported strong holiday-quarter sales, suggesting wealthier shoppers are still purchasing yoga pants and tops despite rising prices for essential goods.
The corporate also issued upbeat guidance for its recent fiscal yr.
Shares of Lululemon jumped about 14% in premarket trading Wednesday. Through Tuesday’s close, the stock is about flat for the yr, putting the corporate’s market value at $40.87 billion.
Here’s what the corporate reported for the three-month period ended Jan. 29, compared with Wall Street expectations based on a survey of analysts by Refinitiv:
- Earnings per share: $4.40 adjusted vs $4.26 expected
- Revenue: $2.77 billion vs. $2.7 billion expected
Lululemon’s fourth-quarter net income fell to $119.8 million, or 94 cents per share, from $434.5 million, or $3.36 per share, a yr ago. Excluding impairment and other charges related to the acquisition of Mirror, in addition to other items, per-share earnings were $4.40.
Revenue rose to $2.77 billion from $2.13 billion a yr ago.
The corporate expects fiscal 2023 revenue of between $9.3 billion and $9.41 billion, topping Wall Street’s expectations of $9.14 billion, in response to Refinitiv estimates. The corporate expects full-year profit of between $11.50 and $11.72 per share, compared with Refinitiv estimates of $11.26 per share.
“Looking ahead, we remain optimistic regarding our ability to deliver sustained growth and long-term value for all our stakeholders,” said Chief Financial Officer Meghan Frank in a press release.
The Vancouver-based athletic apparel retailer said total comparable sales for the fourth quarter increased by 27%. Also called same-store sales, the metric includes sales from stores open repeatedly for not less than 12 months.
“We imagine that it’s certainly one of the few firms within the space that has a really long pathway for growth, and it is also a really highly visible one,” said Rick Patel, managing director at Raymond James.
Patel said his firm, which maintains a robust buy rating on the stock, sees upside in Lululemon’s international business and its men’s business, and that the worst of the corporate’s inventory struggles are up to now.
In December, Lululemon said inventories at the tip of its third quarter were up 85% year-over-year. The corporate said Tuesday that as of the tip of 2022, inventories were up 50%.
