© Reuters. FILE PHOTO: A Lululemon signal is seen at a shopping center in San Diego, California, U.S., November, 23, 2022. REUTERS/Mike Blake
By Deborah Mary Sophia
(Reuters) -Lululemon Athletica Inc on Tuesday forecast annual gross sales and revenue above Road estimates because the athleisure clothes maker rides on resilient demand and easing stock glut, sending its shares up practically 13% in prolonged buying and selling.
The corporate additionally allayed considerations round a deeper margin squeeze on decrease air freight bills and fewer markdowns, after a 300-basis-point hit within the vacation quarter.
Vancouver, Canada-based Lululemon has benefited from wealthier buyers nonetheless snapping up its higher-priced tops, yoga pants and shorts, in distinction to the overall development of inflation-wary prospects reducing again on discretionary spending.
A loyal buyer base has additionally allowed the corporate to promote extra of its widespread merchandise, akin to its Align (NASDAQ:) high-rise yoga pants, which retails between $98 and $118, at full worth.
Markdowns elevated simply 40 foundation factors within the vacation quarter in comparison with 2019 pre-pandemic ranges, and are anticipated to stay flat in 2023.
“Lululemon is doing a very good job drawing folks into the model,” Raymond James analyst Rick Patel stated, including new product launches akin to its tennis and mountaineering merchandise are serving to acquire pockets share amongst customers.
In the meantime, Lululemon can be making good progress in clearing its extra inventories. Inventories had been up 50% at $1.4 billion on the finish of the fourth quarter, in comparison with an 85% swell on the finish of the prior quarter.
It expects an about 30% to 35% enhance in stock within the present quarter.
Lululemon stated it expects fiscal 2023 income between $9.30 billion and $9.41 billion, above analysts’ common estimate of $9.14 billion, in response to Refinitiv IBES information.
The corporate forecast full-year revenue within the vary of $11.50 to $11.72 per share, in contrast with analysts’ estimate of $11.26.
Lululemon additionally issued upbeat forecasts for the primary quarter, and topped expectations for fourth-quarter outcomes.
