Topline
Lululemon shares surged 15% Friday morning, after the athleisure brand reported higher-than-expected sales growth in the first quarter, supported by a boost in sales domestically and abroad, led by China.
Lululemon reported a 24% increase in first-quarter revenue.
Key Facts
Lululemon shares closed at $328.35 Thursday and rose by 15% to $377.85 as of 9 a.m. Friday.
Lululemon’s first-quarter revenue increased by 24% to $2 billion year-over-year, exceeding expectations of an 18% rise, following increases of 17% and 60% in sales from North American and international markets, respectively.
Meghan Frank, Lululemon’s Chief Financial Officer, said the first quarter was bolstered by sales in China—which increased by 79%—and lower freight costs.
Sales also increased across the board, with women’s apparel sales increasing by 22%, men’s apparel increased by 17% and accessory sales rose by 67%.
The company projected a 17% increase in net revenue for 2023, including a 15% for the second quarter.
Crucial Quote
Lululemon CEO Calvin McDonald told investors during a post-earnings call Thursday he expects “strong growth in North America, internationally” to “continue as we see balanced growth in every market across gender, category and activity.”
Big Number
$5.5 billion. That’s how much Lululemon reported for total assets as of April 30, according to its first-quarter report.
Key Background
Sales growth for Lululemon follows a successful fourth-quarter report, which indicated a 30% increase in net revenue year-over-year for the athleisure brand. McDonald noted the company had expected an increase in revenue to open the first quarter as China eased its pandemic restrictions. The company is operating on its “Power of Three x2” growth plan, which calls for doubling its 2021 revenue of $6.25 billion to $12.5 billion by 2025. This includes a plan to expand into international markets, with 30 to 35 new stores planned overseas. Lululemon’s growth follows a boost in sales during the pandemic, as other athleisure brands—including Reebok, New Balance and Gymshark—became popular as more people exercised while staying at home.
Further Reading
Lululemon Shares Surge As Consumers Snap Up Pricier Athletic Wear (Reuters)
Source: https://www.forbes.com/sites/tylerroush/2023/06/02/lululemon-shares-soar-15-after-first-quarter-sales-growth/