Denver, Colorado – Lululemon, the popular athletic apparel retailer, is experiencing a slowdown in U.S. growth while seeing significant gains internationally. The company reported a 9% increase in sales year over year, surpassing Wall Street’s expectations for the quarter.
In a call with analysts, Lululemon’s CEO Calvin McDonald expressed a cautious outlook for the upcoming fourth quarter, emphasizing the need for thoughtful planning due to the shorter holiday shopping season. Despite the challenges in the U.S. market, the company remains optimistic about the holiday season’s start.
During the fiscal third quarter, Lululemon exceeded analysts’ expectations with earnings per share at $2.87 compared to the expected $2.69, and revenue reaching $2.40 billion instead of the expected $2.36 billion. Following the positive results, shares rose approximately 8% in extended trading.
Looking ahead to the holiday shopping quarter, Lululemon anticipates revenue between $3.48 billion and $3.51 billion, representing growth of 8% to 10% from the previous year. The company is also expecting earnings per share to be between $5.56 and $5.64, exceeding analysts’ expectations.
In response to a challenging competitive landscape and slower growth, Lululemon has turned its focus toward international markets, particularly China, to drive sales growth. Despite a 2% decrease in comparable sales in the U.S., the company experienced a significant 25% increase internationally during the quarter.
With a recent shift in leadership and product strategies, Lululemon aims to improve its performance and recapture market share. The company’s focus on new product releases and enhancing the customer experience reflects its commitment to growth and innovation within the industry.
As Lululemon navigates through its challenges and adapts to changing consumer preferences, the company remains dedicated to maintaining profitability and driving shareholder value. Through strategic initiatives like stock buybacks and a focus on gross margin improvement, Lululemon continues to position itself for long-term success in the retail market.