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Lululemon Athletica (LULU, $28.65) on Thursday reported quarterly earnings and revenue that beat analysts’ expectations. The company also raised its outlook for the year with shares rising about 9% in off-hours trading. It said that traffic remains strong both in stores and online, even as surging inflation cramps consumers’ spending.
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Numbers show that second-quarter net revenue rose 29% to $1.87 billion, beating estimates of $1.77 billion. Adjusted per-share earnings of $2.20 also topped estimates of $1.87, according to Refinitiv data. The company raised its earnings and revenue forecast for 2022 to above market estimates. It lifted the adjusted per-share earnings outlook to between $9.75 and $9.90 from $9.35 to $9.50, and increased its net revenue forecast to between $7.87 billion and $7.94 billion from $7.61 billion to $7.71 billion.
Why it matters
Lululemon has a higher-income customer base that seems mostly unfettered by inflationary pressures. Higher-income consumers have largely shrugged off the impact of inflation to spend on discretionary goods including apparel and bags, buoyed by their savings during the lockdowns. The company has also tapped into its loyal customers by launching fresh styles, entering categories including footwear and expanding its men's line to sustain its athleisure-led pandemic sales boom, outperforming peers Athleta and Sweaty Betty.
