Lululemon Athletica Inc. reported results that surpassed analysts’ expectations and raised its full-year forecast, as the athletic-wear retailer speeds up deliveries to get products to stores in time to meet robust demand.

Executives expect sales to reach as much as US$7.7 billion in the fiscal year that ends in January.

Comparable-store sales, a key retail metric, rose 29 per cent at constant currencies, and net revenue reached US$1.6 billion in the first quarter. Those were above the average estimates compiled by Bloomberg.

Key Insights

• Consumer demand remains strong with the pandemic-era shift toward comfier clothes outweighing inflationary pressures.
• It’s a new era for Lululemon. Chief Executive Officer Calvin McDonald met with investors in April to share his growth strategy, unveiling a new five-year plan that looks to double sales by 2026. The company plans to expand its offerings to men and will try to quadruple international sales compared with 2021 levels.
• The logistics problems that have hurt Lululemon’s performance since the holiday season haven’t yet fully alleviated. Chief Financial Officer Meghan Frank cited “ongoing impacts of COVID-19, supply-chain disruptions and inflationary pressures” as some of the issues facing the business. Gross margin was 53.9 per cent in the quarter, slightly lower than expectations.

Market Reaction

• US-listed shares of Vancouver, British Columbia-based Lululemon rose 0.8 per cent in after-market trading as of 4:26 p.m. Thursday. The stock had been down 23 per cent this year through the day’s close.