Shares of Lululemon Athletica (NASDAQ: LULU) reversed earlier losses and surged over 5% to reach a record high in intraday trading Friday after the athletic apparel retailer reported better-than-expected earnings for the third quarter.
The company reported an EPS of $2.53 for the third quarter, higher than anticipated. Revenue for the same period came in at $2.19 billion, meeting market forecasts.
However, Lululemon has provided an outlook that fell short of analysts’ expectations. It forecasts the current-quarter earnings per share (EPS) to range between $4.85 and $4.93 compared to the analysts’ estimate of $4.80 and $5.19. The revenue outlook for the fourth quarter, ranging from $3.135 billion to $3.170 billion, fell slightly short of estimates pegged at $3.18 billion.
CEO Calvin McDonald stated that this year’s Black Friday was the company’s most profitable sales day ever. He expressed satisfaction with the positive trends witnessed at the beginning of the holiday season. Despite this optimism, CFO Meghan Frank acknowledged the macroeconomic uncertainties, stating,
“Lululemon remains aware of the uncertainties in the macro environment, and we continue to plan the business for multiple scenarios.”
Total comparable sales rose 13% from the last year, surpassing expectations, with direct-to-consumer sales soaring by 18%. Comparable sales at its stores increased by 9%, falling short of estimates.
In addition, Lululemon Athletica (NASDAQ: LULU) announced an expansion of its stock repurchase program by $1 billion.
Following the initial dip, Lululemon stock made a strong comeback. The shares have risen 5.63% to $490.81 per share as of around 02:34 p.m. ET on Friday. LULU stock has surged over 50% this year.
Maria Reed is a financial journalist with a passion for covering US equities. She joined the ABBO News team in June 2023. Maria holds an M.S. degree in International Economics and Finance from Otto-von-Guericke University in Magdeburg and is a CFA Level 2 candidate.
