Lululemon athletica inc. (NYSE:LULU) has revised its guidance for the fourth quarter of fiscal 2023, citing a robust performance during the holiday season. The updated forecast, disclosed ahead of its participation in the 2024 ICR Conference from Jan 8-10, 2024, reflects an impressive increase in net revenues and earnings per share. This upward adjustment underscores the company’s resilience and ability to adapt to changing consumer preferences.
Lululemon reported well-balanced sales trends across channels, categories, and geographies during the holiday selling period, leading to the upward revision of its outlook for the fiscal fourth quarter. The company’s emphasis on fresh styles significantly contributed to its sales growth. Management highlighted the positive response from guests to lululemon’s innovative and versatile product offerings.
Shares of Lululemon have surged by 55.7% in the past year, outperforming the industry’s growth of 12.7%.
Q4 Outlook
For the fourth quarter of fiscal 2023, Lululemon anticipates net revenues of $3.170-$3.190 billion, reflecting a 14-15% year-over-year increase. This is an upward revision from the earlier prediction of $3.135-$3.170 billion, showcasing the brand’s robust market performance.
Earnings per share for the fiscal fourth quarter are expected to be in the range of $4.96-$5.00, indicating an upward revision from the previous estimate of $4.85-$4.93. This revised view not only signifies strong sales but also underscores the brand’s effective cost management and operational efficiency.
The gross margin for the fiscal fourth quarter is projected to be 58.6-58.7%, up from the previously stated 58.3-58.6%. This suggests that Lululemon is successfully navigating market dynamics and optimizing its cost structures to enhance profitability.
Despite the upward revisions in net revenues, earnings per share, and gross margin, the company has maintained its previous guidance for selling, general and administrative expenses, and the effective tax rate. This indicates that Lululemon is adopting a disciplined approach to cost management, ensuring a balance between top-line growth and operational efficiency.
Conclusion
The positive adjustments in net revenues, earnings per share, and gross margin underscore Lululemon’s resilience and strategic positioning in the competitive athletic apparel market. With continued innovation and strong consumer resonance, the brand appears well-positioned for sustained success in the upcoming quarters.
Featured Image: Unsplash @ Marco Tjokro
Author Stephanie Bédard-Châteauneuf 
