Lululemon Athletica Inc. posted first-quarter sales and an outlook for the full year that beat expectations as the company saw a pickup in brick-and-mortar traffic along with strong online sales.

The yogawear company raised the annual guidance it issued in March. Revenue is now seen at about US$5.825 billion to US$5.905 billion this year, up from the previous range of no more than US$5.65 billion. Adjusted earnings per share will be as high as US$6.86 -- above the previous range and expectations.

Key insights

• The new guidance shows the company is bullish on its ability to continue attracting shoppers even as North America prepares to go back to the office and don more formal attire. Chief Executive Officer Calvin McDonald said in a statement that the results demonstrate “the momentum and strength of Lululemon as we shift into the new normal.”
• Traffic at brick-and-mortar stores is key to Lululemon, which relies on classes and other events to create a community feel that brings shoppers back for repeat visits. Revenue at company-operated physical locations climbed 106 per cent from a year earlier, when it had to close dozens of stores.
• E-commerce, while slowing down from past quarter, still rose 50 per cent on a constant dollar basis. Lululemon, which offered personal shopping on video calls during the pandemic, has also been testing same-day delivery in a few markets.
• Investors will be listening closely for details on shipping and logistics -- U.S. ports have experienced costly bottlenecks. Lululemon has resorted to air freight to compensate recently -- an option that helps alleviate shipping pressures but carries a high cost.

Market reaction

• The shares were little changed in late trading, largely erasing an earlier gain. Lululemon fell 8.8 per cent this year through Thursday’s close.