People stand in line to enter a store during Black Friday shopping at The Fashion Outlets of Chicago in Rosemont, Greater Chicago Area, Illinois, United States, on November 26, 2021.
Joel Lerner | Xinhua News Agency | Getty Images
Lululemon reported sales and profit on Thursday that topped estimates, but the company offered softer than expected guidance for the fourth quarter.
Shares of the company fell more than 7% in after hours.
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Here’s what the company reported for the three-month period, compared with what Wall Street expected, based on a survey of analysts by Refinitiv:
- Earnings per share: $2, adjusted, versus the $1.97 expected
- Revenue: $1.86 billion vs. $1.81 billion expected
The athletic apparel retailer is a popular mall destination known for its trendy — and pricey — workout apparel and loungewear. Even as inflation hits Americans’ wallets and people prepare again, investors have bet that the brand can attract shoppers and get them to spend.
Lululemon’s third-quarter net income rose to $255.5 million, or $2 per share, from $187.8 million, or $1.44 per share, a year earlier. Revenue increased 28% to $1.86 billion.
Its total comparable sales grew 22%. A closely watched metric, also called same-store sales, includes sales from stores that have been open continuously for at least 12 months without temporary closures or renovations. Analysts were expecting 19% growth, according to Street accounts.
CEO Calvin McDonald said on the earnings call that the company got off to a strong start to the holiday season. He said Black Friday was the biggest day in history for sales and store traffic. But he added, “we also believe the external environment remains challenging with several high-volume weeks still ahead of us.”
The company’s guidance for the fourth quarter came in weaker than expected. Lululemon said Thursday it expects fourth-quarter earnings per share of $4.20 to $4.30, compared to estimates of $4.30. It also sees revenue in the range of $2.605 billion to $2.655 billion against an estimated $2.649 billion.
For the full year, the company said it sees revenue of $7.944 billion to $7.994 billion, up from its previous estimate of between $7.865 billion and $7.940 billion. It also raised its adjusted earnings per share outlook to a range of $9.87 to $9.97 from guidance of $9.90 from last quarter’s guidance of $9.75.
The company’s shares have declined more than 4% so far this year. The stock has outperformed the S&P 500 Index, which is down about 17% during the same period. It closed at $374.51 on Thursday, giving it a market cap of $47.75 billion.
