Lululemon (LULU) Q2 2022 earnings

Pedestrians go by a Lululemon retailer.

Scott Mlyn | CNBC

Lululemon Athletica Inc. on Thursday reported quarterly earnings and income that beat analysts’ expectations, as buyers stocked up on exercise gear whilst surging costs have harm different retailers’ attire gross sales.

The corporate additionally raised its outlook for the 12 months. Shares rose about 9% in off-hours buying and selling.

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Here is what the corporate reported in contrast with what Wall Avenue was anticipating, primarily based on a survey of analysts by Refinitiv:

  • Earnings per share: $2.20, adjusted, vs. $1.87 cents anticipated
  • Income: $1.87 billion vs. $1.774 billion anticipated

Identical retailer gross sales grew 23%, which beat StreetAccount’s estimate of 17.6%. Web gross sales rose 29% to $1.87 billion. The corporate mentioned that site visitors stays robust each in shops and on-line, whilst surging inflation cramps customers’ spending.

Lululemon has a higher-income buyer base that appears largely unfettered by inflationary pressures. Nonetheless, different higher-end retailers like Nordstrom and Macy’s slashed their outlook this quarter on fears of slowing demand. Lululemon, then again, has boosted its steerage in two consecutive quarters.

“Regardless of the challenges round us within the macro-environment, visitor site visitors in our shops and on our e-commerce websites stays strong, which speaks to the energy of our multi-dimensional working mannequin,” Chief Monetary Officer Meghan Frank mentioned in a information launch.

Retailer site visitors elevated over 30% and ecommerce site visitors rose over 40%, executives mentioned on the earnings name Thursday. The corporate is hoping to additional enhance loyalty with a soon-to-launch membership program.

The membership program was introduced on the finish of the primary quarter. It has a free tier and a $39 per 30 days paid tier which give subscribers early entry to product drops and unique objects, in addition to invites to in-person occasions.

The corporate mentioned the site visitors will increase weren’t attributable to promotional applications or product markdowns.

“We’ve got not modified our promotional cadence,” CEO Calvin McDonald mentioned on the earnings name. “We’ve got no plans to take action.”

Lululemon continued brick-and-mortar enlargement throughout the quarter, with 21 web new shops for a complete of 600 areas.

Inventories had been up 85% to $1.5 billion in comparison with the identical interval final 12 months. The corporate mentioned it was “under-inventoried” within the second quarter of 2021 as a consequence of provide chain bottlenecks.

Retailers generally have needed to deal with swelling stock ranges as buyers regulate their spending habits. Lululemon mentioned Thursday it’s assured the stock stage will assist it increase gross sales throughout the vacation buying season.

The corporate mentioned it now expects 2022 income of between $7.865 billion and $7.940 billion, up from the vary of $7.610 billion to $7.710 billion it acknowledged final quarter. The corporate additionally raised its adjusted earnings per share outlook to a spread of $9.75 to $9.90, from final quarter’s steerage of $9.35 to $9.50 adjusted.

The discharge additionally maintained the corporate’s long-term outlook of doubling web income to $12.5 billion from from 2021 to 2026. The plan contains an enlargement of its menswear enterprise, footwear, and membership-based health courses. Upon the plan’s announcement within the spring, some analysts had been skeptical about Lululemon’s means to attain the lofty longer-term goal.

Learn the earnings launch here.

This can be a growing story. Test again for updates.


Source: https://www.cnbc.com/2022/09/01/lululemon-lulu-q2-2022-earnings.html

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