Lululemon shares soar as holiday-quarter gross sales surge

Lululemon on Tuesday reported sturdy holiday-quarter gross sales, suggesting wealthier customers are nonetheless buying yoga pants and tops regardless of rising costs for important items.

The corporate additionally issued upbeat steerage for its new fiscal 12 months.

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Shares of Lululemon jumped about 11% in after-hours buying and selling following the report. By means of Tuesday’s shut, the inventory is about flat for the 12 months, placing the corporate’s market worth at $40.87 billion.

Here is what the corporate reported for the three-month interval ended Jan. 29, in contrast with Wall Road expectations primarily based on a survey of analysts by Refinitiv:

• Earnings per share: $4.40 adjusted vs $4.26 anticipated
• Income: $2.77 billion vs. $2.7 billion anticipated

Lululemon’s fourth-quarter internet earnings fell to $119.eight million, or 94 cents per share, from $434.5 billion, or $3.36 per share, a 12 months in the past. Excluding impairment and different expenses associated to the acquisition of Mirror, in addition to different gadgets, per-share earnings have been $4.40.

Income rose to $2.77 billion from $2.13 billion a 12 months in the past.

The corporate expects fiscal 2023 income of between $9.Three billion and $9.41 billion, topping Wall Road’s expectations of $9.14 billion, based on Refinitiv estimates. The corporate expects full-year revenue of between $11.50 and $11.72 per share, in contrast with Refinitiv estimates of $11.26 per share.

“Trying forward, we stay optimistic relating to our means to ship sustained development and long-term worth for all our stakeholders,” stated Chief Monetary Officer Meghan Frank in an announcement.

The Vancouver-based athletic attire retailer stated complete comparable gross sales for the fourth quarter elevated by 27%. Additionally referred to as same-store gross sales, the metric contains gross sales from shops open repeatedly for a minimum of 12 months.

“We consider that it is likely one of the few corporations within the house that has a really lengthy pathway for development, and it is also a really extremely seen one,” stated Rick Patel, managing director at Raymond James.

Patel stated his agency, which maintains a robust purchase ranking on the inventory, sees upside in Lululemon’s worldwide enterprise and its males’s enterprise, and that the worst of the corporate’s stock struggles are prior to now.

In December, Lululemon stated inventories on the finish of its third quarter have been up 85% year-over-year. The corporate stated Tuesday that as of the top of 2022, inventories have been up 50%.