lululemon athletica inc. Updates Revenue and Earnings Expectations for the Fourth Quarter Ahead of the ICR Conference

Rhea-AI Summary

lululemon athletica inc. (NASDAQ:LULU) expects a 14% to 15% increase in net revenue for the fourth quarter of fiscal 2023, with a range of $3.170 billion to $3.190 billion. Diluted earnings per share are expected to be in the range of $4.96 to $5.00. Gross margin is expected to be in the range of 58.6% to 58.7%. The company's performance during the holiday season has been strong, leading to an increase in guidance for the fourth quarter.

Insights

Financial Analyst

The upward revision in net revenue guidance for lululemon athletica's fourth quarter indicates a robust performance, outpacing previous estimates. A 14-15% year-over-year increase is significant, suggesting strong consumer demand and effective business strategies. The revision from $3.135 billion to a range of $3.170 billion to $3.190 billion reflects confidence in the company's sales trajectory, which is particularly noteworthy given the competitive retail landscape and potential economic headwinds.

Similarly, the increase in EPS guidance from $4.85-$4.93 to $4.96-$5.00 suggests operational efficiency and cost control, despite no reported change in SG&A expenses or tax rate. Investors should consider how this profitability uptick aligns with lululemon's historical margins and industry benchmarks. The gross margin forecast, slightly improved to 58.6%-58.7%, indicates a disciplined approach to inventory management and pricing power, which is crucial in maintaining profitability amidst inflationary pressures.

Market Research Analyst

lululemon's performance during the holiday season reflects a successful alignment of product offerings with consumer preferences. The mention of balanced sales across channels, categories and geographies suggests a well-diversified business model that is resilient to market fluctuations. This also points to effective omnichannel strategies, which have become increasingly vital in the retail sector.

The company's ability to innovate and cater to diverse customer needs is a key driver of growth. Investors should note the potential for lululemon's continued expansion and market share gains, especially as the brand strengthens its international presence. The focus on innovation and versatility in products could also be indicative of a sustainable competitive advantage that may support long-term growth.

Economist

The positive guidance update from lululemon athletica may signal broader economic trends, such as sustained consumer spending in the athleisure segment despite inflationary concerns. This could be indicative of a shift in consumer priorities or a strong brand loyalty that enables certain premium brands to maintain their pricing power and customer base.

Furthermore, the company's performance can be a microcosm for assessing discretionary spending patterns. A strong showing by lululemon could suggest that the higher-income consumer segment remains robust, which has implications for retailers targeting similar demographics. The consistency in sales across various markets may also imply relative economic stability in lululemon's key geographies.

VANCOUVER, British Columbia--(BUSINESS WIRE)-- lululemon athletica inc. (NASDAQ:LULU) today announced that, for the fourth quarter of fiscal 2023, the Company now expects net revenue will be in the range of $3.170 billion to $3.190 billion, representing a 14% to 15% increase compared to the fourth quarter of fiscal 2022. The previous guidance range was $3.135 billion to $3.170 billion.

Diluted earnings per share are now expected to be in the range of $4.96 to $5.00 for the fourth quarter of fiscal 2023 compared to the Company’s previous guidance range of $4.85 to $4.93.

The Company now expects gross margin to be in the range of 58.6% to 58.7% for the fourth quarter of fiscal 2023, compared to its previous guidance of 58.3% to 58.6%. There is no change to the Company’s previous guidance for selling, general, and administrative expenses or effective tax rate.

Meghan Frank, Chief Financial Officer, commented: “We are pleased with our performance during the holiday season, as guests continue to respond well to our innovative and versatile product offerings. Our sales trend remains balanced across channels, categories, and geographies, enabling us to raise our guidance for the fourth quarter and close out another strong year.”

Management will be meeting with analysts and investors at the ICR Conference on January 8-10, 2024.

About lululemon athletica inc.

lululemon athletica inc. (NASDAQ:LULU) is a technical athletic apparel, footwear, and accessories company for yoga, running, training, and most other activities, creating transformational products and experiences that build meaningful connections, unlocking greater possibility and wellbeing for all. Setting the bar in innovation of fabrics and functional designs, lululemon works with yogis and athletes in local communities around the world for continuous research and product feedback. For more information, visit lululemon.com.

Forward-Looking Statements:

This press release includes estimates, projections, statements relating to the Company's business plans, objectives, and expected operating results that are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. In many cases, you can identify forward-looking statements by terms such as "may," "will," "should," "expects," "plans," "anticipates," "outlook," "believes," "intends," "estimates," "predicts," "potential" or the negative of these terms or other comparable terminology. These forward-looking statements also include the Company's guidance and outlook statements. These statements are based on management's current expectations but they involve a number of risks and uncertainties. Actual results and the timing of events could differ materially from those anticipated in the forward-looking statements as a result of risks and uncertainties, which include, without limitation: the Company's ability to maintain the value and reputation of its brand; changes in consumer shopping preferences and shifts in distribution channels; the acceptability of its products to guests; its highly competitive market and increasing competition; increasing costs and decreasing selling prices; its ability to anticipate consumer preferences and successfully develop and introduce new, innovative and updated products; its ability to accurately forecast guest demand for its products; its ability to expand in light of its limited operating experience and limited brand recognition in new international markets and new product categories; its ability to manage its growth and the increased complexity of its business effectively; its ability to successfully open new store locations in a timely manner; seasonality; disruptions of its supply chain; its reliance on a relatively small number of vendors to supply and manufacture a significant portion of its products; suppliers or manufacturers not complying with its Vendor Code of Ethics or applicable laws; its ability to deliver its products to the market and to meet guest expectations if it has problems with its distribution system; increasing labor costs and other factors associated with the production of its products in South Asia and South East Asia; its ability to safeguard against security breaches with respect to its technology systems; its compliance with privacy and data protection laws; any material disruption of its information systems; its ability to have technology-based systems function effectively and grow its e-commerce business globally; climate change, and related legislative and regulatory responses; increased scrutiny regarding its environmental, social, and governance, or sustainability responsibilities; an economic recession, depression, or downturn or economic uncertainty in its key markets; global or regional health events such as the current COVID-19 pandemic and related government, private sector, and individual consumer responsive actions; global economic and political conditions; its ability to source and sell its merchandise profitably or at all if new trade restrictions are imposed or existing trade restrictions become more burdensome; changes in tax laws or unanticipated tax liabilities; its ability to comply with trade and other regulations; fluctuations in foreign currency exchange rates; imitation by its competitors; its ability to protect its intellectual property rights; conflicting trademarks and patents and the prevention of sale of certain products; its exposure to various types of litigation; and other risks and uncertainties set out in filings made from time to time with the United States Securities and Exchange Commission and available at www.sec.gov, including, without limitation, its most recent reports on Form 10-K and Form 10-Q. You are urged to consider these factors carefully in evaluating the forward-looking statements contained herein and are cautioned not to place undue reliance on such forward-looking statements, which are qualified in their entirety by these cautionary statements. The forward-looking statements made herein speak only as of the date of this press release and the Company undertakes no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances, except as may be required by law.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240108049404/en/

Investor Contact:

lululemon athletica inc.

Howard Tubin

1-604-732-6124

or

ICR, Inc.

Joseph Teklits/Caitlin Churchill

1-203-682-8200



Media Contact:

lululemon athletica inc.

Erin Hankinson

1-604-732-6124

or

lululemon athletica inc.

Madi Wallace

1-604-732-6124

Source: lululemon athletica inc.

FAQ

What is lululemon athletica's ticker symbol?

The ticker symbol for lululemon athletica is LULU.

What is the expected increase in net revenue for lululemon athletica in the fourth quarter of fiscal 2023?

lululemon athletica expects a 14% to 15% increase in net revenue, with a range of $3.170 billion to $3.190 billion.

What is the expected range for diluted earnings per share for lululemon athletica in the fourth quarter of fiscal 2023?

Diluted earnings per share are expected to be in the range of $4.96 to $5.00 for lululemon athletica in the fourth quarter of fiscal 2023.

What is the expected range for gross margin for lululemon athletica in the fourth quarter of fiscal 2023?

lululemon athletica expects gross margin to be in the range of 58.6% to 58.7% for the fourth quarter of fiscal 2023.

When will lululemon athletica be meeting with analysts and investors?

lululemon athletica will be meeting with analysts and investors at the ICR Conference on January 8-10, 2024.