Lululemon on Thursday reported quarterly earnings and revenue that beat analysts’ estimates, but its outlook for the fourth quarter was slightly weaker than expected.
- Earnings per share: 75 cents, adjusted, vs. 70 cents expected
- Revenue: $748 million vs. $737.5 million expected
- Same-store sales: 18 percent increase vs. 13.8 percent expected
For its fourth and current quarter, the retailer expects to see revenue of as much as $1.13 billion and to earn $1.64 cents per share, numbers that disappointed investors who were expecting a busier holiday season.
The company said it experienced its biggest day ever for e-commerce on Thanksgiving, which was then surpassed on Black Friday. Less successful for web sales was Cyber Monday.
“Our guests shopped earlier and wanted to get a jump-start on the holiday season,” Lululemon’s COO Stuart Haselden told analysts on a conference call.
Lululemon fiscal third-quarter net income rose to $94.4 million, or 71 cents per share, from $58.9 million, or 43 cents per share, a year earlier.
Excluding items, the company earned 75 cents per share, higher than the 70 cents per share expected by analysts surveyed by Refinitiv.
Net sales rose 21 percent from fiscal year 2017 to $748 million, beating expectations of $737.5 million. Improvements to the retailer’s website have increased both online traffic as well as actual digital sales, one of the contributing factors for the strong sales overall. Haselden said web traffic has increased by more than 35 percent in the quarter.
The Vancouver-based company’s expansion into men’s apparel helped revenue growth, seeing the highest category increases overall. Lululemon said it is ahead of schedule to reach $1 billion in sales in 2020.
The retailer also credited its growth into outerwear for both men and women for the increase in sales.
Despite a weaker-than-expected outlook for the fourth quarter, Lululemon increased its revenue forecast for the fiscal year to a range of $3.24 billion to $3.25 billion, compared with a previous range of $3.19 billion to $3.24 billion. Earnings, excluding a tax reform-related expense, are expected to fall between $3.65 and $3.68 per share for the fiscal year, also up from a prior range of $3.45 to $3.53 per share.
The company’s same-store sales increased 18 percent, outpacing Wall Street estimates of 13.8 percent.
The athleisure retailer moved its quarterly release date from Wednesday to Thursday because U.S. financial markets were closed to observe a day of mourning for President George Herbert Walker Bush.