Lululemon Beats Earnings Expectations, Reports 9% Sales Increase
Lululemon Athletica Inc. reported a 9% increase in sales year-over-year, driven by strong growth abroad. The yoga pants company also beat Wall Street’s expectations on both the top and bottom lines.
In the fiscal third quarter, which ended on October 27, Lululemon reported earnings per share of $2.87, exceeding analysts’ estimates of $2.69. Revenue totaled $2.40 billion, beating the expected $2.36 billion.
Despite a 2% slowdown in comparable sales in the U.S., Lululemon saw a 25% increase in international sales. The company’s overall revenue grew 2% in the Americas and 33% internationally.
Lululemon’s CFO, Meghan Frank, cited the shortened holiday shopping season and uncertain macro environment as reasons for the company’s cautious outlook. The company expects revenue to grow 8% to 10% in the fourth quarter, and is planning “prudently” for the period.
For the full year, Lululemon raised its revenue guidance to between $10.45 billion and $10.49 billion, and expects earnings per share to be between $14.08 and $14.16. The outlook is ahead of analysts’ expectations, according to StreetAccount.
The company has faced challenges in recent quarters, including a slow start to the year and difficulties in launching new products. However, Lululemon has turned to China for growth, and is seeing strong results from its international efforts.
Lululemon’s CEO, Calvin McDonald, took a cautious tone during a call with analysts, citing the importance of navigating the shorter holiday shopping season. He also emphasized the company’s focus on product innovation, saying that the company is “on track” to increase new product releases in time for the spring selling season.
