Pedestrians seen strolling previous Canadian athletic attire retailer Lululemon in Shanghai.
Alex Tai | SOPA Photos | LightRocket | Getty Photos
Lululemon clients to this point aren’t balking at increased costs on the retailer’s leggings and sports activities bras, Chief Govt Officer Calvin McDonald stated Thursday.
The athletic attire maker reported fiscal-first quarter revenue and income that outpaced Wall Avenue’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 enterprise to proceed regardless of broader financial headwinds, together with purple sizzling inflation and the snarled provide chain.
Lululemon, which caters to a extra prosperous buyer, joins a bunch of outlets together with Levi Strauss & Co., Nordstrom and Macy’s high-end Bloomingdale division which might be luring customers with sufficient extra cash to splurge on new garments and equipment whereas costs are rising at charges final seen 4 many years in the past. In late March, Lululemon stated it might be elevating costs on sure objects to assist offset increased prices for uncooked supplies, labor and air freight.
Lululemon specifically was seen as a pandemic beneficiary, as individuals sought out stretchy pants and comfy clothes to put on at house. However now, at the same time as People emerge from their houses to return to workplaces and social outings, they’re nonetheless shopping for so-called athleisure objects. Lululemon has additionally broadened its assortment extra lately to incorporate footwear and skin-care merchandise.
“Our product pipeline stays very sturdy and it is the bedrock of the enterprise,” McDonald stated on a name with analysts.
Lululemon sees gross sales in fiscal 2022 in a variety of $7.61 billion to $7.71 billion, up from a previous forecast of $7.49 billion to $7.62 billion. Analysts had been searching for $7.54 billion, in accordance with Refinitiv knowledge.
The corporate 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 had been searching for per-share earnings of $9.28.
Lululemon’s shares had been little modified throughout prolonged buying and selling.
Here is how Lululemon did in its fiscal first quarter in contrast with what Wall Avenue was anticipating, based mostly on Refinitiv knowledge:
- Earnings per share: $1.48 vs. $1.43 anticipated
- Income: $1.61 billion vs. $1.53 billion
The retailer reported internet revenue in its fiscal first quarter of $190 million, or $1.48 per share, in contrast with internet revenue of $145 million, or $1.11 a share, a 12 months earlier.
Lululemon’s income grew roughly 32% to $1.61 billion from $1.23 billion a 12 months earlier.
Identical-store gross sales, which monitor income on-line and at Lululemon shops open for a minimum of 12 months, rose 28% from the prior 12 months. Analysts had been searching for a rise of 20.4%, in accordance with StreetAccount estimates.
Girls’s gross sales grew 24% on a three-year foundation, and males’s grew 30% versus 2019 ranges, the corporate stated.
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 achieve on the sale of an administrative workplace 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.
Concerning China, which remains to be dealing with Covid-related restrictions in some areas, McDonald stated that roughly one-third of Lululemon’s 71 shops within the nation had been closed for a time frame within the newest quarter and into the second.
Nevertheless, he stated the corporate will proceed to spend money on China, viewing the softened demand as a short-term problem. “Our model momentum stays sturdy,” the CEO informed analysts.
Lululemon shares are down about 23% 12 months thus far.