Calvin McDonald, Chief Executive Officer of Lululemon, said Thursday that customers are not objecting to higher prices on leggings and bras.
The athletic apparel maker reported fiscal-first quarter profit and revenue that exceeded expectations, boosted by double-digit growth online and in the men's division.
Despite red hot inflation and the snarled supply chain, it expects the momentum in its business to continue.
While prices are rising at rates last seen four decades ago, a group of retailers, including Macy's and Levi's, are appealing to shoppers with enough money to spend on new clothes and accessories. In March, Lululemon said it would be raising prices on certain items to offset higher costs.
People sought out stretchy pants and comfortable clothes at home as a result of the Pandemic. Even as Americans leave their homes to go back to work and social outings, they still buy so-called athleisure items. More recently, it has added skin-care products.
McDonald said on the call that the product line remained strong.
Sales are expected to range between $7.61 billion to $7.72 billion, up from a previous forecast of $7.49 billion to $7.62 billion. The analysts were looking for $7.54 billion.
The company expects to earn between $9.35 and $9.40 per share, up from a previous range of $9.35 to $9.35. Per-share earnings were expected to be $9.28.
The shares were unchanged during the extended trading.
The results of the first quarter of the fiscal year were based on Refinitiv data.
Net income for the fiscal first quarter was $190 million, or $1.48 per share, compared with net income of $145 million, or $1.11 a share, a year ago.
Revenue increased 32% to $1.61 billion from $1.23 billion a year ago.
Same-store sales were up 28% from the prior year. StreetAccount estimated that analysts had been looking for an increase of 20.4%.
The company said that women's and men's sales grew over the last three years.
Revenue for the second quarter is expected to be in the range of $1.75 billion to $1.78 billion, beating analysts' expectations.
Excluding the gain on the sale of an administrative office building, adjusted earnings per share are expected to be in the range of $1.82 to $1.87, ahead of analysts' expectations.
McDonald said that about one-third of the stores in China were closed for a period of time in the second quarter.
He said the company will continue to invest in China despite the softer demand. The CEO said that the brand's momentum remained strong.
The shares of Lululemon are down.
All Rights Reserved © 2024
