Pedestrians have been spotted passing by Canadian sportswear retailer Lululemon in Shanghai.
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Lululemon customers are not worried about higher prices for the retailer’s gaiters and sports bras, CEO Calvin MacDonald said on Thursday.
The athletic apparel maker reported earnings and revenue for the first fiscal quarter that exceeded Wall Street expectations, driven by double-digit growth online and in the retailer’s still-emerging male division.
He also boosted his financial outlook for fiscal 2022, expecting momentum in its business to continue despite broader economic cross-winds, including hot inflation and a strained supply chain.
Lululemon, which caters to more affluent customers, joins a group of retailers, including Levi Strauss & Co., Nordstrom and Macy’s high-end Bloomingdale, who entice shoppers with enough extra money to splurge on new clothes and accessories as prices rise to percentages last seen four decades ago. In late March, Lululemon said it would raise the prices of some items to offset higher costs for raw materials, labor and air transport.
In particular, Lululemon was seen as a beneficiary of the pandemic, as people were looking for stretchy pants and comfortable clothes to wear at home. But now, even as Americans leave their homes to return to offices and social outings, they still buy so-called sports items. Lululemon has also expanded its range recently to include shoes and skin care products.
“Our product remains very strong and this is the basis of the business,” MacDonald told analysts.
Lululemon sees sales in fiscal 2022 ranging from $ 7.61 billion to $ 7.71 billion, up from a previous forecast of $ 7.49 billion to $ 7.62 billion. According to Refinitiv, analysts were looking for $ 7.54 billion.
The company expects to earn, on an adjusted basis, between $ 9.35 and $ 9.50 per share, compared to the previous range of $ 9.15 to $ 9.35. Analysts were looking for earnings per share of $ 9.28.
Shares of Lululemon were slightly changed during the long trading.
Here’s how Lululemon did in its first fiscal quarter compared to what Wall Street expected, based on Refinitiv data:
- Earnings per share: $ 1.48 versus $ 1.43 expected
- Revenue: $ 1.61 billion versus $ 1.53 billion
The retailer reported a net profit in its first fiscal quarter of $ 190 million, or $ 1.48 per share, compared to a net profit of $ 145 million, or $ 1.11 per share, a year earlier.
Lululemon’s revenue rose approximately 32% to $ 1.61 billion from $ 1.23 billion a year earlier.
Sales at the same store, which tracks revenue online and at Lululemon stores, which have been open for at least 12 months, rose 28% from the previous year. Analysts were looking for an increase of 20.4%, according to StreetAccount estimates.
Women’s sales increased by 24% on a three-year basis, while men’s sales increased by 30% compared to 2019 levels, the company said.
Lululemon expects revenue to be in the range of $ 1.75 billion to $ 1.78 billion for the second quarter, exceeding analysts’ expectations by $ 1.71 billion.
Excluding earnings from the sale of an office building, adjusted earnings per share are expected to range from $ 1.82 to $ 1.87, ahead of analysts’ expectations of $ 1.77.
Regarding China, which still faces Covid restrictions in some regions, McDonald said that approximately one-third of Lululemon’s 71 stores in the country have been closed for some time in the last quarter and in the second. .
However, he said the company would continue to invest in China, seeing moderate demand as a short-term challenge. “The momentum of our brand remains strong,” said analysts’ chief executive.
Shares of Lululemon have fallen about 23% for the year so far.
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