Lululemon (LULU) Q1 2022 earnings beat estimates


Lululemon prospects to date aren’t balking at greater costs on the retailer’s leggings and sports activities bras, Chief Govt Officer Calvin McDonald mentioned Thursday.

The athletic attire maker reported fiscal-first quarter revenue and income that outpaced Wall Road’s expectations, boosted by double-digit progress on-line and within the retailer’s nonetheless nascent males’s division.

It additionally raised its monetary outlook for fiscal 2022, anticipating the momentum in its enterprise to proceed regardless of broader financial headwinds, together with crimson sizzling inflation and the snarled provide chain.

Lululemon, which caters to a extra prosperous buyer, joins a bunch of shops together with Levi Strauss & Co., Nordstrom and Macy’s high-end Bloomingdale division which might be luring customers with sufficient extra cash to splurge on new garments and equipment whereas costs are rising at charges final seen 4 many years in the past. In late March, Lululemon mentioned it will be elevating costs on sure objects to assist offset greater prices for uncooked supplies, labor and air freight.

Pedestrians seen strolling previous Canadian athletic attire retailer Lululemon in Shanghai.

Alex Tai | SOPA Pictures | LightRocket | Getty Pictures

Lululemon particularly was seen as a pandemic beneficiary, as folks sought out stretchy pants and cozy clothes to put on at dwelling. However now, at the same time as People emerge from their properties to return to places of work and social outings, they’re nonetheless shopping for so-called athleisure objects. Lululemon has additionally broadened its assortment extra not too long ago to incorporate footwear and skin-care merchandise.

“Our product pipeline stays very robust and it is the bedrock of the enterprise,” McDonald mentioned on a name with analysts.

Lululemon sees gross sales in fiscal 2022 in a variety of $7.61 billion to $7.71 billion, up from a previous forecast of $7.49 billion to $7.62 billion. Analysts had been in search of $7.54 billion, in line with Refinitiv information.

The corporate expects to earn, on an adjusted foundation, between $9.35 and $9.50 per share, up from a previous vary of $9.15 to $9.35. Analysts had been in search of per-share earnings of $9.28.

Lululemon’s shares had been little modified throughout prolonged buying and selling.

This is how Lululemon did in its fiscal first quarter in contrast with what Wall Road was anticipating, based mostly on Refinitiv information:

  • Earnings per share: $1.48 vs. $1.43 anticipated
  • Income: $1.61 billion vs. $1.53 billion

The retailer reported internet earnings in its fiscal first quarter of $190 million, or $1.48 per share, in contrast with internet earnings of $145 million, or $1.11 a share, a yr earlier.

Lululemon’s income grew roughly 32% to $1.61 billion from $1.23 billion a yr earlier.

Identical-store gross sales, which observe income on-line and at Lululemon shops open for no less than 12 months, rose 28% from the prior yr. Analysts had been in search of a rise of 20.4%, in line with StreetAccount estimates.

Girls’s gross sales grew 24% on a three-year foundation, and males’s grew 30% versus 2019 ranges, the corporate mentioned.

For the second quarter, Lululemon expects income to be within the vary of $1.75 billion to $1.78 billion, topping analysts’ expectations for $1.71 billion.

Excluding the achieve on the sale of an administrative workplace constructing, adjusted earnings per share are anticipated to be within the vary of $1.82 to $1.87, forward of analysts’ expectations for $1.77.

Concerning China, which remains to be dealing with Covid-related restrictions in some areas, McDonald mentioned that roughly one-third of Lululemon’s 71 shops within the nation had been closed for a time period within the newest quarter and into the second.

Nevertheless, he mentioned the corporate will proceed to spend money on China, viewing the softened demand as a short-term problem. “Our model momentum stays robust,” the CEO informed analysts.

Lululemon shares are down about 23% yr so far.

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