Lululemon lifts annual forecasts on strong demand for fresh products

FLE PHOTO: The brand for Lululemon Athletica is seen at a retailer in Manhattan, New York, U.S., December 7, 2021. REUTERS/Andrew Kelly

Sept 1 (Reuters) – Lululemon Athletica Inc (LULU.O) on Thursday raised its annual revenue and income forecasts to above analysts’ estimates as prosperous prospects snap up its new belt luggage, golf and tennis clothes, sending its shares up 10% in prolonged commerce.

Increased-income shoppers have largely shrugged off the impression of inflation to spend on discretionary items together with attire and luggage, buoyed by their financial savings through the lockdowns.

There was no significant shift in prospects’ spending habits, Lululemon prime boss Calvin McDonald stated on the earnings name.

The corporate has additionally tapped into its loyal prospects by launching recent kinds, getting into classes together with footwear and increasing its males’s line to maintain its athleisure-led pandemic gross sales increase, outperforming friends Athleta (GPS.N) and Sweaty Betty (WWW.N).

Analysts have additionally stated reductions at Lululemon, which has a comparatively recent inventory, have risen solely marginally in current weeks whereas its friends have reduce costs sharply to spice up total gross sales and in addition offload out-of-style stock.

“Lululemon stays predominantly a full-price enterprise, and we now have not modified our promotional cadence or markdown technique and we now have no plans to take action,” McDonald stated.

Lululemon stated it has deliberate a number of launches within the coming weeks, together with footwear and luggage, as Chinese language distributors ramp up manufacturing after easing of COVID-19 curbs put in place earlier this yr.

The corporate raised its earnings and income forecast for 2022 to above market estimates.

It lifted the adjusted per-share earnings outlook to between $9.75 and $9.90 from $9.35 to $9.50, and elevated its internet income forecast to between $7.87 billion and $7.94 billion from $7.61 billion to $7.71 billion.

Second-quarter internet income rose 29% to $1.87 billion, beating estimates of $1.77 billion.

Adjusted per-share earnings of $2.20 additionally topped estimates of $1.87, in line with Refinitiv information.

Reporting by Praveen Paramasivam in Bengaluru; Enhancing by Vinay Dwivedi

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