Athletic apparel company Lululemon Athletica Inc. (NASDAQ: $LULU) raised its fourth-quarter guidance today, following a successful holiday shopping season marked by increased demand.
The positive update came after a mixed season for retailers, who relied heavily on promotions and deals to attract customers. Lululemon’s news contrasts with its tepid predictions last month about holiday quarter performance.
In December, Lululemon noted strong Thanksgiving weekend sales and cautioned about the challenging macroeconomic environment.
Chief Financial Officer Meghan Frank credited the company’s balanced sales across channels, categories, and regions for exceeding expectations. “We are pleased with our performance during the holiday season,” Frank said.
Lululemon Earnings Outlook Misses Analyst Estimates
Lululemon shares initially dropped 2.4%, as its new earnings range was slightly below analyst estimates. However, the stock recovered on the company’s improved revenue and margin outlook.
For Q4, Lululemon expects earnings per share between $4.96 and $5.00, from prior guidance of $4.85 to $4.93. However, analysts forecast $4.97 per FactSet.
Meanwhile, Lululemon predicted Q4 revenue of $3.17 billion to $3.19 billion, higher from its prior view of $3.135 billion to $3.17 billion. The revised range represents a 14-15% annual increase. Analysts projected revenue of $3.19 billion. Lululemon also raised its gross margin view.
Lululemon now sees Q4 gross margins of 58.6-58.7%, exceeding the earlier 58.3% to 58.6% projection. Lululemon maintained its expense and tax guidance.
Lululemon’s emphasis on new styles and tight control of excess inventory enabled it to sell more products at full price during the holidays. The athletic apparel company relied less on discounts and markdowns.
However, despite the sales boost, Lululemon left its forecast for selling, general, and administrative expenses unchanged.
Lululemon Stock Price And Forecast As Of January 8, 2024
The current share price for athletic apparel company Lululemon Athletica Inc. (LULU) is $491.17 as of Monday, January 8, 2024. LULU’s stock has been on an upward trend over the past year. We have labelled critical support and resistance areas for LULU in the chart below:
Lululemon’s Historical Stock Performance Suggests Continued Growth
An analysis of Lululemon Athletica’s stock price over the past 16 years shows the shares have risen by an average of 42.7% over subsequent 52-week periods.
Lululemon’s stock price increased in 11 of the last 16 years, reflecting a historical accuracy of 68.75%.
Based on this multi-year stock performance, Lululemon has tended to experience strong gains in the year following initial price growth. This historical trend implies potential for further share price appreciation in the future.
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