Lululemon Athletica seems unstoppable. Citing a strong holiday period, it has upgraded its revenue and earnings guidance for the fiscal fourth quarter ending on Feb. 2, 2020. The company’s shares, which nearly doubled in value last year, gained an additional 3 percentage points after the announcement.
It now anticipates that revenues will be in the range of $1,370 million to $1,380 million based on a total comparable sales increase in the mid- to high teens on a constant dollar basis. This is up from a previous forecast of revenues of $1,315 million to $1,330 million based on a total comparable sales increase in the low double digits on a constant dollar basis.
Diluted earnings per share are expected to be in the range of $2.22 to $2.25, instead of $2.10 to $2.13. This suggests that the company is likely to report a net profit of around $290 million for the quarter, up sharply from $218.5 million for the same period a year ago.
In recent years, Lululemon has been booming, lifted by the continued rise of the athleisure trend. The company has also been benefiting from the growing popularity of health and wellness, as well as a greater awareness of environmental issues, with the brand communicating on sustainability.
The brand is gathering the fruits of strong investments in product development, using proprietary performance fabrics, that have allowed it to offer a multitude of interesting new products and to expand in the men’s sector. It has also invested in its loyalty program and worked to improve the in-store shopping experience, forming a powerful bond with a loyal customer base that will buy almost everything in Lululemon’s online and offline stores, regardless of price.
