Lululemon Announces Better than Expected Fiscal Q1 2023 Results, LULU Shares Up 13%

Lululemon Announces Better than Expected Fiscal Q1 2023 Results, LULU Shares Up 13%

UTC by Steve Muchoki · 3 min read
Lululemon Announces Better than Expected Fiscal Q1 2023 Results, LULU Shares Up 13%
Photo: Depositphotos

For the second quarter, Lululemon Athletica expects to report net revenue of between $2.140 billion and $2.170 billion, thereby representing growth of approximately 15 percent.

Lululemon Athletica Inc (NASDAQ: LULU), a Canadian multinational athletic apparel retailer, announced the results for the first quarter (Q1) of fiscal 2023 on June 1. During the first quarter, Lululemon Athletica announced revenue of $2 billion, whereas analysts surveyed by REFINITIV expected $1.93 billion. Additionally, the company reported its earnings per share (EPS) for the first quarter came in at $2.28 versus the $1.98 expected by analysts surveyed by REFINITIV. As a result, LULU shares gained approximately 13.29 percent during the after-hours market on Thursday to trade around $372.

The $43.96 billion valued company has seen its stock market gain approximately 3 percent YTD according to the latest market data.

Closer Look at Lululemon Athletica Q1 2023 Highlights

According to the first quarter announcement, Lululemon Athletica reported a net income of $290.4 million, or $2.28 per share, compared with $190 million, or $1.48 per share during the same time a year ago. Calvin McDonald, Chief Executive Officer, noted that the company has invested significantly in innovative products and quality relationships with customers across the world.

“This year we celebrate our 25th anniversary, and our community-based model remains one of our biggest competitive advantages. We are excited about the future and remain on track to deliver on our Power of Three ×2 growth plan,” McDonald added.

Notably, the company’s net revenue increased approximately 17 percent in North America and 60 percent internationally during the first quarter that ended on April 30, compared to the same period last year. Additionally, the company’s direct-to-consumer net revenue represented 42 percent of total net revenue, compared to approximately 45 percent during the same time last year.

Worth noting that Lululemon’s gross profit increased by about 32 percent during the first quarter to $1.2 billion. As a result, the company announced it repurchased about 0.3 million shares, in common stock, at an average price of $336.37 per share for a total cost of $98.1 million.

During the first quarter, Lululemon Athletica opened seven new stores thus ending the quarter with 662 stores. Consequently, the company forecast even better results for the remaining part of the year as it revised the FY23 outlook.

For the second quarter, Lululemon Athletica expects to report net revenue of between $2.140 billion and $2.170 billion, thereby representing growth of approximately 15 percent. For the whole year, the company revised the outlook to net revenue of between $9.440 billion to $9.510 billion, hence representing growth of approximately 17 percent.

According to Meghan Frank, the company’s Chief Financial Officer, the lower air freight and accelerated China sales contributed to the good performance for the quarter.

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