Lululemon, a leading athletic apparel retailer, has released its third-quarter earnings report, beating Wall Street’s expectations. The company reported a 9% increase in sales year over year, driven by strong international growth.
Despite slowing U.S. sales, Lululemon’s overall revenue rose to $2.40 billion, with gross margin increasing by 1.5 percentage points to 58.5%. The company expects holiday season sales to be between $3.48 billion and $3.51 billion, representing a 8-10% increase from the prior year.
Lululemon’s CEO, Calvin McDonald, took a cautious tone when discussing the fourth-quarter outlook, citing large volume weeks ahead. However, analysts note that the company’s product struggles appear to be behind it, with its women’s range feeling fresh and interesting across Q3.
The company has also turned to stock buybacks to boost investor confidence, approving a $1 billion increase to its program. Lululemon’s efforts to boost profitability have paid off, with gross margin growth exceeding expectations.
Despite the positive earnings report, Lululemon remains in a competitive environment, facing challenges from legacy brands and newer disruptors like Vuori and Alo Yoga. However, the company’s focus on international growth and new product releases is expected to drive future success.
Source: https://www.cnbc.com/2024/12/05/lululemon-lulu-earnings-q3-2024.html