Lululemon (LULU) announced its third-quarter earnings after Thursday’s close, and the company’s stock rose in pre-market trading Friday as the results beat both the top and bottom.
Lululemon stock rose more than 8% after the company also raised its full-year sales and profit forecasts for 2024.
Still, sales growth in North America fell again as retailers grappled with concerns about increased competition ahead of the crucial holiday shopping season.
Revenue was $2.4 billion, up from $2.2 billion in the third quarter of 2023. Analyst estimates compiled by Bloomberg had expected sales of $2.36 billion, as retailers guided sales between $2.34 billion and $2.37 billion.
Earnings came to $2.87 per share, beating expectations of $2.75 per share. This also beat the $2.53 EPS the company reported in the year-ago period.
The company expected fourth-quarter revenue of $3.48 billion to $3.51 billion, compared to the consensus estimate of $3.5 billion. The company also expects fourth-quarter earnings per share to be between $5.56 and $5.64, below expectations of $5.70.
The company raised its full-year net revenue guidance to a range of $10.45 billion to $10.49 billion, from the previous range of $10.38 billion to $10.48 billion. The company also raised its full-year earnings per share forecast to a range of $14.08 to $14.16, higher than the previous estimate of $13.95 to $14.15.
“The third-quarter performance reflects continued momentum for Lululemon globally as we continue to see momentum in our international markets and Canada,” Lululemon CEO Calvin MacDonald said in an earnings call. It shows strength.”
“Looking to the future, we are pleased with our start to the holiday season and remain focused on accelerating our U.S. business and increasing brand recognition around the world.”
Gross margin improved on a quarter-over-quarter basis, increasing 150 basis points to 58.5% compared to an 80 basis point increase in the second quarter. The company also announced on December 3 that it had approved a $1 billion increase in its stock repurchase program.
Ahead of the report, the stock was one of the worst performing stocks in the S&P 500 (^GSPC) this year, as emerging brands like Alo and Vuori gain market share with trendier styles and products. It has plummeted by more than 30%.
The stock has also significantly underperformed Consumer Freedom Sector (XLY), which has risen about 27% over the same period.
And while stocks have rebounded from four-year lows hit in the summer, analysts say rising short-term interest rates have been a catalyst, making the long-term fundamental story even more important. There is.
the story continues
