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Lululemon raises full-year earnings forecast as athleisure demand remains strong

Click to play video: 'The Peak Daily: Rising inflation, Netflix subscriber loss, and Lululemon’s new targeting of men'
The Peak Daily: Rising inflation, Netflix subscriber loss, and Lululemon’s new targeting of men
Global News Business Reporter Anne Gaviola and host Brett Chang discuss rising costs of living in Canada, Netflix stocks taking a hit from subscriber losses and Lululemon’s targeting of men to increase overall sales. Get up-to-speed with a fun and smart breakdown of the three biggest Canadian and global business stories in less than 10 minutes on "The Peak Daily" podcast – Apr 25, 2022

Lululemon Athletica LULU.O raised its full-year revenue and profit forecast on Thursday, as demand for its high-priced yoga pants and running shorts from affluent U.S. customers remains strong.

The customers, largely unaffected by a decades-high inflation, are happily running high bills at Lululemon despite recent price hikes, helping the company maintain the pandemic-induced boom in sales of its comfortable sportswear.

The athletic wear maker, like many other U.S. companies, has been raising prices on selective products to offset higher freight and manufacturing charges arising from global supply chain disruptions.

Lululemon on Thursday forecast current-quarter revenue and profit above estimates and beat first-quarter earnings estimates.

Shares of the company rose about 2% in extended trading. They were down 23% this year.

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Lululemon expects full-year 2022 revenue between $7.61 billion and $7.71 billion, up from its prior forecast of $7.49 billion to $7.62 billion.

It also sees profit between $9.42 and $9.57 per share, compared with its previous forecast of $9.15 to $9.35.

However, rival companies Under Armour UAA.N and Adidas ADSGn.DE flagged a hit to business from renewed COVID-19 curbs in China. Under Armour forecast full-year profit below estimates as it also grapples with higher transportation costs. Read full storyRead full story

Lululemon, meanwhile, also forecast 2022 adjusted profit between $9.35 and $9.50 per share, above analysts’ average estimate of $9.28 per share, according to IBES data from Refinitiv.

Excluding items, Lululemon earned $1.48 per share in the first quarter, beating estimates of $1.43 per share.

(Reporting by Ananya Mariam Rajesh in Bengaluru; Editing by Shinjini Ganguli)

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