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Lululemon hikes Q4 targets on steady holiday demand

Click to play video: 'BIV: Lululemon makes a splash'
BIV: Lululemon makes a splash
WATCH - BIV: Lululemon makes a splash – Oct 17, 2023

Lululemon raised its fourth-quarter sales and profit forecasts on Monday, in a sign that deeper discounts and deals spurred more customers to shop for the company’s products during the holiday season.

This comes after the sportswear maker forecast tepid holiday quarter results early last month.

CFO Meghan Frank said on Monday the company was pleased with its performance during the holiday season. “Our sales trend remains balanced across channels, categories and geographies, enabling us to raise our guidance,” Frank said in a statement.

Click to play video: 'BIV: Lululemon postd better than expected Q2 earnings'
BIV: Lululemon postd better than expected Q2 earnings

Holiday sales for 2023 were mixed as retailers looked to draw in penny-pinched shoppers with steep discounts, according to estimates from Adobe Analytics and Mastercard data.

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In December, yoga pants maker Lululemon said it had experienced strong performance during the Thanksgiving weekend, but also noted that it was mindful of the macroeconomic environment.

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Lululemon now expects fourth-quarter revenue to be between US$3.170 billion and US$3.190 billion, compared with its previous forecast range of US$3.135 billion to US$3.170 billion.

It projects current-quarter profit per share to be in the range of US$4.96 to US$5.00, compared with its previous expectations of US$4.85 to US$4.93.

Separately, Abercrombie and Fitch also lifted its fourth-quarter forecast for net sales on Monday, banking on strong holiday demand.

Lululemon, however, left its selling, general, and administrative expenses forecast unchanged.

Shares of the company were down 2.4 per cent in premarket trading.

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