Sportswear Lululemon Athletica announced the results of the third quarter
Sportswear manufacturer Lululemon Athletica Inc. (LULU) announced the third-quarter results and raised its annual revenue forecast. The company’s only weak point was the recently acquired Mirror division, whose sales declined.
Lululemon Athletica’s revenue in the third quarter increased by 30% year-on-year to $1.45 billion. Revenue increased by 28% in North America and 40% internationally. Compared to 2019, total sales of Lululemon Athletica increased by 58%, which corresponds to an average annual growth rate of 26% over two years.
GAAP operating profit increased by 26% year-on-year to almost $258 million, corresponding to $1.44 per share. Adjusted net profit exceeded $211 million, which is 40% more compared to the same quarter last year. Lululemon Athletica’s revenue grew by a 32% year-on-year increase in comparable sales and a 23% increase in revenue from direct sales to consumers.
Note that direct sales accounted for 40% of total revenue for the quarter compared to 43% a year earlier. Over the past quarter, Lululemon Athletica opened 18 new branded stores, ending the period with 552 points of sale. Despite the existing problems with supply chains, the company has not experienced difficulties with restocking and meeting consumer demand.
According to which Lululemon Athletica management has raised its forecast, revenue in the fourth quarter will be in the range of $2.125 billion to $2.165 billion, and adjusted earnings per share will be from $3.25 to $3.32. On average, this forecast represents revenue and adjusted earnings per share growth of 24% and 27%, respectively. For the full year, revenue is forecast to be between $6.25 billion and $6.29 billion, and adjusted earnings per share – from $7.69 to $7.76.
On average, the updated forecast represents an increase in annual income and adjusted earnings per share by 43% and 64%, respectively. However, Lululemon Athletica has reduced revenue expectations for the recently acquired Mirror interactive training division.
At the same time, more importantly, the company’s main business remains stable and works at total capacity. As a result, Lululemon Athletica clothing still has a lot of room for growth, especially in the international market. At the auction on December 13, the LULU stock was worth $403.75.
