Lululemon shares rise after boosting sales and profit outlook
Investors are happy about at least one retailer’s holiday season: Shares of Lululemon Athletica Inc. (LULU.O) jumped on Monday after the yogawear company increased its fourth-quarter guidance for sales and profit.Lululemon said comparable-store sales, a key gauge of retail success, increased in the high-single to low-double digits for the current quarter, which ends Feb. 3. The company also sees total sales and adjusted profit coming in higher than its previous forecasts.
Despite low unemployment and high consumer confidence in the U.S., it appears that not all retailers reaped the benefits. But Lululemon’s preliminary data suggests it will sidestep the rout that derailed some companies’ shares last week. “The momentum in our business remained strong throughout the holiday season, reflecting the ongoing success of our product offerings and our connection with guests around the globe,” Chief Executive Officer Calvin McDonald said. This contrasts with Macy’s, which reported that sales tapered off in December after a strong Black Friday. Lululemon, which was a pioneer in athletic-casual apparel, seeks to increase sales to men and in overseas markets. While Monday’s release didn’t break down revenue specifics, it suggests the Vancouver-based company is making progress.
Lululemon shares rose as much as 6.2 per cent to US$140.40 on Monday. The stock has already gained 8.7 percent this year through last Friday’s close, which is more than double the S&P 500. More news could come on Jan. 14 and 15, when the company’s management is set to meet with investors at the ICR Conference in Orlando, Florida.