Lululemon Q1 2022 Earnings: Sales Rise by 88% Surpassing Estimates as Customer Traffic Rebounds

Lululemon Athletica Inc (NASDAQ: LULU) financial Q1 2022 report indicates that sales rose by 88% to surpass estimates as customers shopping habits go back to norm. The sportswear manufacturer, whose primarily focus is athletics apparel also gave a strong forecast for the second quarter and also raised the estimates of the remaining part of the year. The athletics apparel maker said that the decision to revise their targets was influenced by the healthy growth of the store. While addressing analysts, Calvin McDonald, the company’s director, said that he expects Lululemon’s international operations will grow to match the North America’s operations in the near future. The company’s stock rose by slightly short of 1%. By end of the year 2020, Lululemon’s international sales were equal to 14% of the whole business.

According to a Refinitiv Survey, the following results show a summary of the company’s performance, and analyst estimates for the first financial quarter ending May 2, 2020.

Adjusted earnings per share valued at $1.16 while the estimated price was $0.91. Sales revenue was $1.23 billion while analyst estimates stood at $1.13 billion.

Income after interest and tax (net income) rose to $145 million, equal to $1.11 per share. The previous years net income was $28.6 or $0.22 per share. Due to the increased income each share fetched $1.16, $0.25 more than analyst estimates. On the other hand, revenue was $1.23 billion while revenue for the same period in the previous year stood at $652 million. Financial analysts’ estimates were $1.13 billion. In two years, sales revenue had risen by 57%. Additionally, Lululemon stated that men’s business outperformed women. Direct-to-customer climbed by 55% to stand at $545.1 million year over year.

What Caused the Improved Performance of Lululemon in Q1?

Lululemon’s management noted that the improved performance is as a result of the change in customer habits that were largely influenced by the Corona Virus pandemic situation. Following the lockdown directives, many people were forced to work from home and thus, the need to exercise at home in order to maintain fitness arose. Exercising at home led to high demand of sportswear, making Lululemon a beneficiary. This trend has also benefited other sportswear manufacturers like Nike, Gap and Under Armour. Recently, Gap noted that activewear has boosted revenue for its two products, Old Navy banners and Athleta

Lululemon also owns at-home fitness, a major rival to Peloton. Lululemon’s chief financial officer, Meghan Frank noted that momentum has remained high and that the company will continue investing in innovative merchandise while the momentum lasts.