Signage at a Lululemon store in New York on Aug. 22, 2024.
Yuki Iwamura | Bloomberg | Getty Images
Lululemon raised its fourth quarter earnings and revenue guidance on Monday after seeing a strong response from shoppers during the all-important holiday season.
The athletic apparel company now expects sales to grow between 11% and 12% to between $3.56 billion and $3.58 billion, up from a previous range of $3.48 billion and $3.51 billion.
Excluding an additional fiscal week the company will have in the fourth quarter of 2024, Lululemon expects sales growth of between 6% and 7%.
The company also hiked its profit outlook. Lululemon is now forecasting fourth-quarter earnings per share to be between $5.81 and $5.85, compared to previous guidance of between $5.56 and $5.64. It expects gross margins to grow by 0.3 percentage points after previously forecasting they would decline between 0.2 and 0.3 percentage points.
Shares rose about 4% in premarket trading.
“During the holiday season, our guests responded well to our product offering, enabling us to increase our fourth quarter guidance,” finance chief Meghan Frank said in a statement.
Lululemon released its guidance ahead of the annual ICR conference in Orlando when some of the most prominent U.S. retailers are expected to announce early holiday results and meet with investors and analysts about their performance. The conference brings together Wall Street’s biggest banks, law firms, private equity firms and investors and is known to set the tone for deal making and retailer performance at the start of the year.
Lululemon gave cautious holiday guidance when reporting fiscal third quarter earnings in December. The company’s outlook was largely in line with expectations, but Frank told analysts executives were planning the business “prudently” given the shortened holiday shopping season and the “uncertain macro environment.”
“While we feel good about the start of the holiday season, we still have large volume weeks in front of us,” CEO Calvin McDonald added at the time. “Given the shorter holiday shopping season, we continue to be thoughtful in our planning for quarter four overall.”
Overall, the holiday shopping season wasn’t expected to produce the blowout numbers that became common in the aftermath of the Covid-19 pandemic. The National Retail Federation said it was expecting sales to grow between 2.5% and 3.5%. When inflation is taken into account, real growth was expected to be minimal.
Still, some early reads have signaled that the holiday season may be a bit better than expected.
Retail sales for the holiday season in the U.S., excluding automotive sales, rose 3.8% year over year between Nov. 1 through Dec. 24, according to Mastercard SpendingPulse, which measures in-store and online sales across payment types.
