Lululemon, the popular athletic apparel company, has posted strong financial results for its fiscal second quarter. The company reported an impressive 18% increase in both sales and profit, surpassing Wall Street expectations. As a result, Lululemon has raised its full-year guidance, forecasting sales to be between $9.51 billion and $9.57 billion.
Profit expectations have also been revised, with Lululemon expecting earnings per share to be between $12.02 and $12.17 for the year. Looking ahead to its current quarter, the retailer forecasts earnings per share of $2.23 to $2.28 and sales of $2.17 billion to $2.19 billion.
Notably, Lululemon experienced significant growth in markets outside of North America, particularly in China, with a remarkable 61% increase in sales. Despite the country’s slowing economy, the company’s finance chief described the sales growth in China as “strong” and “healthy.” In fact, Lululemon plans to open the majority of its 35 new stores internationally in China.
Sales in North America also saw a positive boost, increasing by 11%. To fuel its ambitious growth plan of doubling sales to $12.5 billion by 2026, Lululemon has been actively expanding its brick-and-mortar footprint and opened 10 new stores during the quarter.
However, the retailer’s inventory issues continue to be a concern. Although Lululemon has been working to address these issues, inventories were up 14% in the second quarter. On the other hand, the company saw a 15% increase in direct-to-consumer revenue, although it represented a smaller portion of overall sales compared to the previous year.
Lululemon’s gross margin of 58.8% remained in line with expectations, highlighting the company’s ability to maintain profitability. With its strong financial performance, impressive sales growth in China, and ambitious expansion plans, Lululemon seems poised for continued success in the athletic apparel market.
“Zombie enthusiast. Subtly charming travel practitioner. Webaholic. Internet expert.”