Lululemon revises up full-year revenue and profit forecasts, cites modest impact from China lockdowns

Lululemon Athletica Inc (LULU) on Thursday revised up its full-year revenue and profit forecasts, as it cited robust athleisure demand.

It also said the impact from China’s pandemic-related lockdowns on its stores was modest and more than offset by strong performance in other regions.

Similar to other companies, Lululemon has been increasing prices on certain items to mitigate higher costs stemming from disrupted global supply chains.

According to the company’s Chief Executive Officer Calvin McDonald, there has been no negative impact on its sales volume due to higher prices, but still, it will “remain cautious around increasing prices in this period of uncertainty.”

The yogawear maker said it expected full-year 2022 revenue to be within the range of $7.61 billion to $7.71 billion, or an upward revision from a previous forecast of $7.49 billion to $7.62 billion.

Full-year profit is forecast to be within the range of $9.42 to $9.57 per share, up from a prior estimate of $9.15 to $9.35 per share.

Meanwhile, full-year 2022 adjusted profit is expected to be within the range of $9.35 to $9.50 per share, compared with market consensus of $9.28 per share.

Lululemon shares closed higher for the fifth time in the past ten trading sessions on NASDAQ on Thursday. It has also been the sharpest single-session gain since May 26th. The stock went up 4.35% ($12.62) to $302.58, after touching an intraday high at $303.24. The latter has been a price level not seen since May 17th ($316.49).

The shares of Lululemon Athletica Inc have retreated 22.70% so far in 2022 compared with a 21.00% loss for the benchmark index, Nasdaq 100 (NDX).

In 2021, Lululemon Athletica’s stock went up 12.48%, thus, it again underperformed the Nasdaq 100, which registered a 26.63% gain.

Analyst stock price forecast and recommendation

According to TipRanks, at least 18 out of 24 surveyed investment analysts had rated Lululemon Athletica Inc’s stock as “Buy”, while 5 – as “Hold”. The median price target on the stock stands at $418.52.