Pedestrians have been seen passing by Canadian sportswear retailer Lululemon in Shanghai.
Alex Tai | SOUP Pictures | LightRocket | Getty Images
Lululemon customers so far are not opposed to higher prices for retailer sports leggings and bras, CEO Calvin McDonald said on Thursday.
The sportswear maker reported earnings and revenue for the first quarter of fiscal that exceeded Wall Street expectations, driven by double-digit growth online and in the retailer’s nascent retail division.
It also boosted its financial outlook for fiscal year 2022, expecting its business momentum to continue despite headwinds against the economy, including hot inflation and a tight supply chain.
Lululemon, which serves a more appropriate customer, joins a group of retailers such as Levi Strauss & Co., Nordstrom and Macy’s Bloomingdale’s high-end division that lure shoppers with enough extra money to spend on clothes and new accessories as prices rise at rates last seen four decades ago. In late March, Lululemon said it would raise the prices of certain items to help offset the higher costs of raw materials, labor and air transportation.
Lululemon in particular was seen as a beneficiary of the pandemic, as people were looking for elastic pants and comfortable clothes to take home. But now, even though Americans are leaving home to return to offices and social outings, they are still buying so-called sporting goods. Lululemon has also expanded its range more recently to include footwear and skin care products.
“Our product portfolio is still very strong and is the foundation of the business,” McDonald said in a call with analysts.
Lululemon expects sales for fiscal year 2022 to range from $ 7.10 billion to $ 7.7 billion, more than a previous forecast of $ 7.49 billion to $ 7.62 billion. Analysts were looking for $ 7.44 billion, according to Refinitiv data.
The company expects to earn, on a tight basis, between $ 9.35 and $ 9.50 per share, from a previous range of $ 9.15 to $ 9.35. Analysts were looking for earnings per share of $ 9.28.
Lululemon’s shares changed little during the extended trading.
This is how Lululemon did during the first fiscal quarter compared to what Wall Street expected, according to Refinitiv data:
- Earnings per share: $ 1.48 versus the expected $ 1.43
- Revenue: $ 1.10 billion compared to $ 1.53 billion
The retailer reported net income in its first fiscal quarter of $ 190 million, or $ 1.48 per share, compared to net income of $ 145 million, or $ 1.11 per share, a year earlier. .
Lululemon’s revenue grew approximately 32% to $ 1.65 billion from $ 1.30 billion the previous year.
Sales at the same stores, which track online revenue, and Lululemon stores that have been open for at least 12 months, up 28% year-over-year. Analysts had been looking for a 20.4% increase, according to StreetAccount estimates.
Women’s sales grew 24% in three years, and men’s sales grew 30% from 2019 levels, the company said.
For the second quarter, Lululemon expects revenue to be between $ 1.75 billion and $ 1.7 billion, exceeding analysts’ expectations of $ 1.7 billion.
Excluding earnings from the sale of an administrative office building, earnings adjusted per share are expected to be between $ 1.82 and $ 1.87, ahead of analysts’ expectations of $ 1.77 .
As for China, which still faces Covid-related restrictions in some regions, McDonald’s said about a third of Lululemon’s 71 stores in the country were closed for a period of time in the last quarter. in the second.
However, he said that the company will continue to invest in China, considering reducing demand as a short-term challenge. “Our brand momentum remains strong,” the CEO told analysts.
Shares of Lululemon have dropped 23% so far.