Lululemon improves its guidance as customers spend despite rising pricing

Lululemon improves its guidance as customers spend despite rising pricing

Web Desk
June 3, 2022

Lululemon improves its guidance as customers spend despite rising pricing

Despite broader economic difficulties, Lululemon expects its commercial growth to continue.
The athletic gear retailer outperformed Wall Street in terms of earnings and revenue.
“Our product pipeline remains very strong and it’s the bedrock of the business,” CEO Calvin McDonald said.

Customers aren’t complaining about rising costs on Lululemon leggings and sports bras, according to Chief Executive Officer Calvin McDonald.

The athletic apparel company posted fiscal-first-quarter profit and revenue that above Wall Street’s projections, propelled by double-digit growth online and in the retailer’s still-in-the-works men’s section.

It also boosted its fiscal 2022 financial estimate, expecting its commercial momentum to continue despite broader economic obstacles such as high inflation and a clogged supply chain.

Lululemon, which caters to affluent customers, joins a group of retailers that includes Levi Strauss & Co., Nordstrom, and Macy’s high-end Bloomingdale division that are luring shoppers with enough extra money to splurge on new clothes and accessories while prices are rising at rates not seen in four decades. Lululemon announced in late March that it would raise pricing on certain items to assist offset increasing raw material, labour, and air freight expenses.

People sought out flexible pants and comfortable clothing to wear at home, and Lululemon was regarded as a major beneficiary. Even as Americans leave their homes to return to work and social activities, they continue to purchase so-called athleisure gear. Lululemon has recently expanded their product line to include footwear and skin-care goods.

“Our product pipeline remains very strong and it’s the bedrock of the business,” McDonald said on a call with analysts.

Lululemon forecasts fiscal 2022 sales in the $7.61 billion to $7.71 billion range, up from a previous prediction of $7.49 billion to $7.62 billion. According to Refinitiv statistics, analysts expected $7.54 billion.

The business expects to earn between $9.35 and $9.50 per share on an adjusted basis, up from a previous range of $9.15 to $9.35. Analysts expected earnings per share of $9.28.

During long trading, Lululemon’s stock moved little.

Based on Refinitiv data, here’s how Lululemon managed in its fiscal first quarter vs what Wall Street expected

The company recorded net income of $190 million, or $1.48 per share, in its fiscal first quarter, up from $145 million, or $1.11 per share, the previous year.

Lululemon’s revenue increased nearly 32% year on year to $1.61 billion from $1.23 billion.

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