Pedestrians seen strolling previous Canadian athletic attire retailer Lululemon in Shanghai.
Alex Tai | SOPA Images | LightRocket | Getty Images
Lululemon prospects up to now aren’t balking at greater costs on the retailer’s leggings and sports activities bras, Chief Executive Officer Calvin McDonald mentioned Thursday.
The athletic attire maker reported fiscal-first quarter revenue and income that outpaced Wall Street’s expectations, boosted by double-digit development on-line and within the retailer’s nonetheless nascent males’s division.
It additionally raised its monetary outlook for fiscal 2022, anticipating the momentum in its business to proceed regardless of broader financial headwinds, together with pink sizzling inflation and the snarled provide chain.
Lululemon, which caters to a extra prosperous buyer, joins a gaggle of shops together with Levi Strauss & Co., Nordstrom and Macy’s high-end Bloomingdale division which might be luring customers with sufficient additional money to splurge on new garments and equipment whereas costs are rising at charges final seen 4 a long time in the past. In late March, Lululemon mentioned it will be elevating costs on sure gadgets to assist offset greater prices for uncooked supplies, labor and air freight.
Lululemon specifically was seen as a pandemic beneficiary, as folks sought out stretchy pants and comfy clothes to put on at house. But now, whilst Americans emerge from their properties to return to workplaces and social outings, they’re nonetheless shopping for so-called athleisure gadgets. Lululemon has additionally broadened its assortment extra just lately to incorporate footwear and skin-care merchandise.
“Our product pipeline remains very strong and it’s the bedrock of the business,” McDonald mentioned on a name with analysts.
Lululemon sees gross sales in fiscal 2022 in a spread of $7.61 billion to $7.71 billion, up from a previous forecast of $7.49 billion to $7.62 billion. Analysts have been on the lookout for $7.54 billion, in keeping with Refinitiv knowledge.
The company expects to earn, on an adjusted foundation, between $9.35 and $9.50 per share, up from a previous vary of $9.15 to $9.35. Analysts have been on the lookout for per-share earnings of $9.28.
Lululemon’s shares have been little modified throughout prolonged buying and selling.
Here’s how Lululemon did in its fiscal first quarter in contrast with what Wall Street was anticipating, based mostly on Refinitiv knowledge:
- Earnings per share: $1.48 vs. $1.43 anticipated
- Revenue: $1.61 billion vs. $1.53 billion
The retailer reported web earnings in its fiscal first quarter of $190 million, or $1.48 per share, in contrast with web earnings of $145 million, or $1.11 a share, a year earlier.
Lululemon’s income grew roughly 32% to $1.61 billion from $1.23 billion a year earlier.
Same-store gross sales, which observe income on-line and at Lululemon shops open for no less than 12 months, rose 28% from the prior year. Analysts had been on the lookout for a rise of 20.4%, in keeping with StreetAccount estimates.
Women’s gross sales grew 24% on a three-year foundation, and males’s grew 30% versus 2019 ranges, the company mentioned.
For the second quarter, Lululemon expects income to be within the vary of $1.75 billion to $1.78 billion, topping analysts’ expectations for $1.71 billion.
Excluding the acquire on the sale of an administrative office constructing, adjusted earnings per share are anticipated to be within the vary of $1.82 to $1.87, forward of analysts’ expectations for $1.77.
Regarding China, which continues to be dealing with Covid-related restrictions in some areas, McDonald mentioned that roughly one-third of Lululemon’s 71 shops within the nation have been closed for a time frame within the newest quarter and into the second.
However, he mentioned the company will proceed to spend money on China, viewing the softened demand as a short-term problem. “Our brand momentum remains strong,” the CEO informed analysts.
Lululemon shares are down about 23% year thus far.