Canadian retailer Lululemon Athletica (LULU) has raised its fourth-quarter earnings and revenue guidance due to strong year-end holiday sales.
The Vancouver-based athletic apparel company says it now expects sales growth of 11% to 12% and $3.56 billion U.S. to $3.58 billion U.S. for Q4 2024.
That’s up from a previous sales range of $3.48 billion U.S. to $3.51 billion U.S.
The company also lifted its profit outlook, saying it now forecasts fourth-quarter earnings per share (EPS) of $5.81 U.S. to $5.85 U.S.
The new outlook is higher than previous EPS guidance of $5.56 U.S. to $5.64 U.S.
Lululemon added that it expects its gross margins to grow by 0.3 percentage points after previously forecasting they would decline 0.3 percentage points.
Lululemon released its new guidance ahead of the annual ICR conference in Florida when the most prominent U.S. retailers announce their preliminary holiday results.
The conference brings together Wall Street’s biggest banks, law firms, private equity firms, and investors, and is known to set the tone for dealmaking at the start of the year.
Lululemon had issued cautious holiday guidance when reporting its last financial results in December. However, the year-end holiday shopping season was more robust than expected.
According to credit card giant Mastercard (MA), which measures in-store and online sales, U.S. retail sales for the holidays rose 3.8% year-over-year between Nov. 1 and Dec. 24.
The stock of Lululemon is up 4% in premarket trading on news of the company’s raised guidance.
Over the last 12 months, Lululemon’s stock has declined 16% to trade at $395.47 U.S. per share.
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