Published - March 28, 2023 @ 5:50 PM (EET)
On Tuesday, shares of Athletic apparel company Lululemon Athletica Inc. (NASDAQ:LULU) jumped after the company reported strong holiday-quarter sales and gave an annual outlook that beat expectations, suggesting wealthier shoppers are still purchasing yoga pants despite higher prices for essential goods.
Even as the retailer deals with nagging inventory issues, the company expects its full-year sales for fiscal 2023 to grow to between $9.3 billion and $9.41 billion, up 15% and ahead of analyst estimates of $9.1 billion.
The company said first-quarter profits would range between $1.93 and $2 a share for the first quarter, compared to analysts forecasting $1.64 per share.
In a statement, Chief Financial Officer Meghan Frank said,
"Looking ahead, we remain optimistic regarding our ability to deliver sustained growth and long-term value for all our stakeholders."
EARNINGS RESULTS
Spurred by solid sales in North America and abroad, global sales rose 30% in the fourth quarter, with revenue of $2.8 billion beating the $2.7 billion estimate and rising from $2.13 billion a year ago.
Following the report, shares of Lululemon rose about 11% in after-hours trading. Through Tuesday's close, the stock is roughly flat for the year, putting the company's market value at $40.87 billion.
Previously, Lululemon warned investors that margins were under pressure thanks to overburdened inventories. However, gross margins performed worse than expected, falling 300 basis points to 55.1% for the quarter after an earlier forecast for a decline of 110 basis points at most.
Total comparable sales, also referred to as same-store sales, for the fourth quarter increased by 27%, the Vancouver-based retailer said. The metric includes sales from stores open continuously for twelve months.
Meanwhile, as management focuses on growing international operations, direct-to-consumer channels, and the menswear business, Chief Executive officer Calvin McDonald is looking to double Lululemon's sales to $12.5 billion in a five-year plan set to end in 2026.
McDonald said the strong results were driven by Lululemon's "innovative products, powerful guest experiences, and strategic market expansion."
