Lululemon Makes Strides In Menswear, Boosts Outlook After Sturdy Vacation Season

TORONTO — Lululemon Athletica Inc. has buoyed studies of a powerful retail vacation season on with a hike to its income and earnings steerage.

The information got here because the Vancouver-based athleticwear firm offered on the annual retail ICR Convention in Orlando on Monday, the place chief working officer Stuart Haselden stated the corporate has made strides in increasing its mens’ enterprise. The corporate expects its menswear line will account for 25 per cent of its enterprise by the point it hits an estimated US$four billion in gross sales by 2020.

Along with increasing its retailer base outdoors of North America, the place it has 325 of its 388 shops, Lululemon has spent years diversifying into different sports activities corresponding to swimming and biking and constructed up a broad assortment for males. As soon as primarily a enterprise primarily based round ladies’s yoga pants and equipment, Lululemon is now extra of a “dual-gender” model, Haselden stated. Gross sales within the retailer’s mens’ enterprise rose 18 per cent within the third quarter.

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Lululemon, which stated final month that it noticed an all-time excessive in site visitors and gross sales on Black Friday and Cyber Monday in November, now expects fourth-quarter income to fall in a variety of US$905 million to US$915 million in contrast with its early December steerage of US$870 million to $885 million. That’s a year-over-year increase of greater than 15 per cent.

The corporate expects earnings of US$1.24 to US$1.26 per share, up from its earlier forecast of US$1.18 to US$1.21. Lululemon raised its adjusted earnings forecast to between US$1.25 and US$1.27 per share. The corporate’ inventory fell round  35 cents to US$79.09 on the Nasdaq in mid-day buying and selling.

Previous to the replace, analysts had been anticipating adjusted revenue of US$1.22 per shares within the interval ending Jan. 28, in line with Thomson P3P. The Canadian retailer stated its increased revenue forecast excludes the affect of current U.S. tax reform, and it anticipates taking a major tax cost within the quarter associated to one-time deemed repatriation tax on international earnings.

Lululemon additionally predicts fourth-quarter comparable gross sales will probably be up within the excessive single digits on a relentless greenback foundation in contrast with an earlier forecast of an increase within the mid-single digits. Remaining fourth-quarter and year-end outcomes are due on March 27.

Given the rising energy of Amazon and investor nervousness about bricks and mortar companies amid the insolvency submitting of Toys ‘R’ Us and the closure of Sears Canada, market watchers have been eyeing retail studies for glimmers of optimism within the important vacation quarter, which might account for as much as 40 per cent of the yr’s income in some companies.

Kohl’s same-store gross sales for the 2017 vacation season climbed almost 7 p.c from the identical interval a yr earlier and the U.S. division retailer chain raised its full-year revenue outlook. Similar-store gross sales had been up eight.eight per cent, with a 9.1 per cent improve within the U.S.

Different retailers have proven a extra tepid vacation efficiency.

Reitmans Canada stated final week that same-store gross sales within the 5 weeks ended Dec. 30 rose zero.9 per cent and L Manufacturers, which operates banners together with Victoria’s Secret and La Senza, reported December same-store gross sales rose 1 per cent.

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