The Canadian sportswear supplier Lululemon Athletica Inc. has done surprisingly good business in recent weeks. In the run-up to an investor conference, the Vancouver-based yoga clothing specialist increased its sales forecast for the fourth quarter of the 2022/23 financial year on Monday and specified its earnings target.
Based on the figures available, management now expects sales in the final quarter ending January 29 to reach a level of between 2.660 and 2.700 billion US dollars (2.48 to 2.52 billion euros). That would correspond to growth of 25 to 27 percent compared to the corresponding period of the previous year. The company had previously only expected revenue in the range of $2.605 billion to $2.655 billion.
The guidance range for diluted earnings per share in the fourth quarter was narrowed to between $4.22 and $4.27. So far it had been between 4.20 and 4.30 US dollars. The company acknowledged a significant decline in gross margin compared to the same period last year, but highlighted that savings in operating expenses were higher than expected.
However, the new earnings target fell short of market expectations. Lululemon’s share price fell by more than nine percent after the current forecast was published.