Lululemon stock surges as consumers keep coming back – National |

shares of Lululemon Athletica Inc Soared 15 per cent in early trade on Friday after the premium apparel retailer shrugged off investor concerns with a full-year outlook lift amid little consumer drag and a sharp jump in China sales.

The rosy outlook comes in contrast to a general trend from US retailers, from Macy’s to the dollar general warnings of weak discretionary spending by US consumers.

At least 11 brokerages raised price targets on the company, with Piper Sandler rising from a mid- to high-margin range of $424 to $445.

“We think (Lululemon) is one of the few brands that is continuing to drive great demand with innovation and newness in this more challenging macro environment,” said Piper Sandler analyst Abbie Zweniecs.

Click to play video: 'Global News Morning Market & Business Report - March 29, 2023'

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Lululemon’s first-quarter results also beat estimates as the company saw traffic at both its stores and online soar nearly 30 percent.

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“Lululemon’s stores continue to be a key catalyst for customer retention and acquisition,” analysts at TD Cowen wrote in a note.

The company reported a 79 per cent growth in sales in China, which was hit by the rollback of COVID restrictions. Lululemon’s exposure to China “could be a solid source of sales and margin for the rest of the year,” analysts at Barclays wrote in a note.

A loyal customer base has also given the company a leg up, helping it sell its more popular products, such as the Align high-rise yoga pants that retail between $98 and $118 at full price, even amid an uncertain economy. does.

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“Lululemon is very popular right now and appears to have a slow immune response,” said David Swartz, an analyst at Morningstar Research.

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The company’s strong results prompted shares of other athletic wear makers, including Nike Inc. and Athleta owner Gap Inc., to rise 4 percent and 3 percent, respectively. Shares of European sportswear companies Adidas and Puma also rose.

(Reporting by Savita Mishra and Aishwarya Venugopal in Bengaluru; Editing by Krishna Chandra Elluri)