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Lululemon (LULU) earnings Q3 2022

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People line as much as enter a store during Black Friday shopping at Fashion Outlets of Chicago in Rosemont of Greater Chicago Area, Illinois, the US, on Nov. 26, 2021.

Joel Lerner | Xinhua News Agency | Getty Images

Lululemon on Thursday reported sales and profit that topped estimates, but the corporate offered softer guidance than expected for the fourth quarter.

Shares of the corporate fell greater than 7% after hours.

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Here’s what the corporate reported for the three-month period compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:

  • Earnings per share: $2, adjusted, vs. $1.97 expected
  • Revenue: $1.86 billion vs. $1.81 billion expected

The athletic apparel retailer is a well-liked mall destination that is known for its trendy — and pricey — workout apparel and loungewear. At the same time as inflation hits Americans’ wallets and other people dress up again, investors have bet that the brand can keep drawing shoppers and getting 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 12 months ago. Revenue rose 28% to $1.86 billion.

Its total comparable sales increased by 22%. The closely watched metric, also called same-store sales, includes sales from stores which have been open repeatedly for no less than 12 months, without temporary closures or renovations. Analysts expected a 19% increase, in response to Street Account.

CEO Calvin McDonald said on an earnings call that the corporate had a powerful begin to the vacation season. He said Black Friday was the most important day in its history for sales and store traffic. But he added, “We also recognize that the external environment stays difficult with several high-volume weeks still in front of us.”

The corporate’s guidance for the fourth quarter got here in weaker than hoped. Lululemon said Thursday it expects fourth quarter per-share earnings of $4.20 to $4.30, in comparison with estimates of $4.30. It also sees revenue of between $2.605 billion to $2.655 billion, versus a projected $2.649 billion.

For the complete 12 months, the corporate said it sees revenue of $7.944 billion to $7.994 billion, up from its previous forecast of between $7.865 billion and $7.940 billion. It also raised its adjusted earnings per share outlook to a spread of $9.87 to $9.97, from last quarter’s guidance of $9.75 to $9.90.

Shares of the corporate are down greater than 4% to this point this 12 months. The stock has outperformed the S&P 500 Index, which is down about 17% throughout the same period. It closed Thursday at $374.51, bringing the market cap to $47.75 billion.

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