Lululemon Athletica
posted another “beat and raise” quarter, sending the stock higher in after-hours trading.
The company turned in earnings of $2.68 a share, above estimates of $2.54. Sales of $2.2 billion rose 18% this quarter, topping expectations for $2.17 billion.
“These results demonstrate the strength of the business and how we are well positioned for the second half of 2023,” said CEO Calvin
McDonald
on a call with investors. “In fact, we are seeing our strong momentum continue into quarter three.”
Lululemon
(ticker: LULU) believes it could continue to drive sales well throughout the fiscal year and raised its fiscal year guidance. It now expects net revenue to range between $9.51 billion to $9.57 billion. Diluted earnings per share are expected to be in the range of $12.02 to $12.17 for the year.
Previous guidance called for revenue to clock in between $9.44 billion and $9.51 billion, and earnings of between $11.74 to $11.94 per share for the year. Analysts had penciled in earnings of $11.93 a share and $9.51 billion in revenue.
Same-store sales, however, rose by 11%, a slower pace than analysts were expecting. Analysts surveyed by FactSet were forecasting a 12.1% increase.
Shares of Lululemon were up 1.4% to $386.50 in after-hours trading.
Earnings season has been rough on other companies in the athletic wear space. Shares of
Dick’s Sporting Goods
(DKS) and
Foot Locker
(FL), for instance, both plummeted in the wake of weak reports—but Lululemon’s quarter suggests that strong brands can perform well even in a challenging macroeconomic environment.
Indeed, the company said it saw strength across all its product categories— especially accessories—and across all geographic markets.
“We continue to gain market share,” McDonald said. “In quarter two, the adult active apparel industry decreased its U.S. revenue compared to the same period last year. Over this time period, Lululemon gained 1.3 points of market share in the US with gains in both men’s and women’s.”
Lululemon’s high-income consumer base may be helping pad the company’s top line, analysts say. Results from other retailers with exposure to higher-income consumers—including
Abercrombie & Fitch
(ANF) and
Urban Outfitters
(URBN)—suggest this demographic continues to spend, even as other consumers pull back.
Write to Sabrina Escobar at [email protected]
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