Lululemon stock climbed Monday after the athleisure retailer guided higher on fourth-quarter earnings and sales based on its strong holiday performance.
Lululemon expects revenue for the January-ending fourth quarter to rise 11%-12% to $3.56 billion to $3.58 billion vs. its previous guidance of $3.475 billion to $3.51 billion. The company now forecasts earnings of $5.81-$5.85 per share, compared to its prior outlook for $5.56 to $5.64 per share.
FactSet expects Q4 earnings of $5.66 per share on $3.473 billion in sales.
Lululemon also expects its gross margin to increase about 30 basis points from last year. It previously guided a decrease of 20 to 30 basis points.
"During the holiday season, our guests responded well to our product offering, enabling us to increase our fourth quarter guidance," CFO Meghan Frank said in the release. The company also plans to present at the annual ICR Conference for retailers, hospitality, and restaurant companies from Jan. 13 to 15 in Orlando, Fla.
Lululemon on Dec. 5 topped Q3 estimates with a 7% increase in earnings on 9% revenue growth.
Lululemon Stock
LULU stock pared gains to less than 1% Monday to close at 398.86.
Shares swung 2.9% higher premarket Monday to nearly 407.
Lululemon is working on a flat base with a 420.01 buy point, matching its December high. Investors could view that flat base as a handle to a huge, very deep base going back to the end of 2023.
Shares have rallied about 79% from their 2024 low in early August. Still, Lululemon is down about 22% from its record high of 516.93 in December 2023.
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