A Lululemon sign is seen at a shopping mall in San Diego, California, November, 23, 2022.
Mike Blake | Reuters
Lululemon on Tuesday reported strong holiday-quarter sales, suggesting that affluent shoppers are still buying yoga pants and tops despite rising prices for essential products.
The company also issued upbeat guidance for its new fiscal year.
Lululemon shares jumped about 11% in after-hours trading following the report. As of Tuesday’s close, the stock was nearly flat for the year, putting the company’s market value at $40.87 billion.
Here’s what the company reported for three months period ended Jan. 29, compared to Wall Street expectations based on a survey of analysts by Refinitiv:
- Earnings per share: $4.40 adjusted vs. $4.26 expected
- Revenue: $2.77 billion vs. $2.7 billion expected
Lululemon’s fourth-quarter net income fell to $119.8 million, or 94 cents per share, from $434.5 billion, or $3.36 per share, a year earlier. Excluding impairment and other charges related to the acquisition of Mirror, as well as other items, earnings per share were $4.40.
Revenue rose to $2.77 billion from $2.13 billion a year earlier.
The company expects fiscal 2023 revenue to be between $9.3 billion and $9.41 billion, topping Wall Street expectations of $9.14 billion, according to Refinitiv estimates. The company expects full-year profit to be between $11.50 and $11.72 per share, compared to Refinitiv estimates of $11.26 per share.
“Going forward, we remain optimistic about our ability to deliver continued growth and long-term value for all of our stakeholders,” Chief Financial Officer Meghan Frank said in a statement.
The Vancouver-based athletic apparel retailer said total comparable sales for the fourth quarter rose 27%. Also called same-store sales, the metric includes sales from stores that have been open continuously for at least 12 months.
“We believe this is one of the few companies in the space that has a very long path for growth, and it’s also a very high visibility one,” said Rick Patel, managing director at Raymond James.
Patel said his company, which maintains a strong buy rating on the stock, sees growth in Lululemon’s international business and its men’s business, and that the worst of the company’s inventory struggles is in the past.
In December, Lululemon said inventories at the end of its third quarter were up 85% year-over-year. The company said on Tuesday that by the end of 2022, inventories will increase by 50%.