Lululemon Athletica Inc. delivered a sales forecast for this year that exceeded analyst estimates, suggesting that the company is overcoming supply-chain snags that disrupted operations earlier this year.

The athletic-wear retailer expects sales to reach as much as US$7.62 billion in the current fiscal year that ends next January. The average analyst estimate was US$7.2 billion. The company’s outlook for the current quarter also surpassed market expectations.

Meanwhile, comparable-store sales, a key retail metric, rose 22 per cent after excluding currency fluctuations for the fourth quarter ended Jan. 30. That’s below the average estimate compiled by Bloomberg.

Lululemon’s board authorized a new share buyback program of as much as US$1 billion.

Key Insights

• Lululemon has benefited from strong demand for comfortable clothes throughout the pandemic with people working from home more often, but it has struggled to keep up as global supply chains across industries were hit with snags in recent months. Net revenue for the quarter rose 21 per cent in North America and 35 per cent in its international division.
• Chief Executive Officer Calvin McDonald told investors in January that the business began the holiday season in a strong position that deteriorated due to capacity limitations, staff shortages and reduced hours in some stores. He now says Lululemon is entering the new fiscal year from a “position of strength.”
• Earlier this month, the retailer debuted its first sneaker line to enter an industry dominated by rivals Nike Inc. and Adidas AG as it tries to outfit shoppers from head to toe. Initial footwear releases were all developed for women, with men’s products expected to hit stores next year.

Market Reaction

• The shares rose as much as 8.7 per cent in extended trading on Tuesday. The stock has fallen 12 per cent this year through the day’s close.