People queue to enter a store during Black Friday shopping at the Fashion Outlets of Chicago in Rosemont, in the greater Chicago area, Illinois, USA, on November 26, 2021.
Joel Lerner | Xinhua News Agency | Getty Images
Lululemon on Thursday reported sales and earnings that beat estimates, but the company offered softer-than-expected guidance for the fourth quarter.
The company’s shares fell more than 9% after the close.
Here’s what the company reported for the three-month period compared to Wall Street expectations based on a survey of analysts by Refinitiv:
- Earnings per share: $2 adjusted versus $1.97 expected
- Revenue: $1.86 billion versus $1.81 billion expected
The sportswear retailer is a popular mall destination known for its trendy – and expensive – workout wear and loungewear. Even as inflation hits American wallets and people dress up again, investors have been betting the brand can continue to attract shoppers and get them to spend.
Lululemon’s third-quarter net income increased to $255.5 million, or $2 per share, from $187.8 million, or $1.44 per share, a year ago. Revenue rose 28% to $1.86 billion. Comparable sales were up 22%, according to the Street Account, versus an expected 19% increase.
CEO Calvin McDonald said on a conference call that the company had a strong start to the holiday season. He said Black Friday was the biggest day in its history for sales and store traffic. But he added: “We also recognize that the external environment remains challenging with several weeks of high volume ahead of us.”
The company’s guidance for the fourth quarter was weaker than hoped. Lululemon said Thursday it expects fourth-quarter earnings per share to be in the range of $4.20 to $4.30, compared to estimates of $4.30. It also projects revenue of between $2.605 billion and $2.655 billion versus a forecast of $2.649 billion.
For the full year, the company said it expects revenue of $7.944 billion to $7.994 billion, up from its previous guidance of $7.865 billion to $7.940 billion. It also raised its outlook for adjusted earnings per share to a range of $9.87 to $9.97 from last quarter’s forecast of $9.75 to $9.90.
The company’s shares are down more than 4% so far this year. The stock has outperformed the S&P 500 Index, which is down about 17% over the same period. It closed at $374.51 on Thursday, bringing the market cap to $47.75 billion.
