By Juveria Tabassum
(Reuters) -Lululemon Athletica increased its full-year forecasts on Thursday, betting on resilient demand for its athletic wear in the U.S. during the holiday shopping season and continued strength in its international business.
The company’s shares rose about 8% in extended trading, with Lululemon approving an increase of $1 billion to its stock repurchase program.
Lululemon, like its peers, has had to keep its foot on the pedal when it comes to introducing fresh colors and prints to keep consumers engaged amid stiff competition from newer brands.
“We are pleased with our business over the extended Thanksgiving weekend,” Lululemon’s CEO Calvin McDonald said on a post-earnings call.
The company now expects fiscal year 2024 revenue between $10.452 billion and $10.487 billion, compared with its prior forecast range of $10.375 billion to $10.475 billion.
“It seems they’re overcoming some of the product problems they had earlier this year with the merchandise,” Morningstar analyst David Swartz said.
“A lot of the growth is coming from the international business right now. I think they’re doing really well in China.”
Lululemon has benefited from its more targeted approach in its second-largest market China, where it has about 130 stores. The company works with local fitness instructors, social media influencers and markets its products through health and wellness events in the country.
Revenue from China rose 36% in the third quarter, on a constant-currency basis, following an increase of 37% in the second quarter.
On an adjusted basis Lululemon earned $2.87 per share in the third quarter, beating estimates of $2.69. Its gross margins rose 150 basis points.
Lululemon raised its annual diluted earnings per share forecast to between $14.08 and $14.16, from its prior range of $13.95 to $14.15.
(Reporting by Juveria Tabassum in Bengaluru; Editing by Shounak Dasgupta)
