Lululemon increases projected earnings for Q4
Reimagined:
(!(mission possible) Lululemon's Q4 Game Changer):
- Boy, oh boy, did Lululemon deliver some explosive news this week! They've cranked up their Q4 revenue projections like never before. The athletic apparel whiz kid is now aiming for revenue between $3.17 billion and $3.19 billion. That's a whopping 14% to 15% increase from Q4 of last year. Not too shabby, eh? They initially predicted revenue of $3.14 billion to $3.17 billion.
- But wait, there's more! Lululemon also bumped up their gross margin outlook. Now, they're targeting a gross margin of 58.6% to 58.7% for Q4. Their previous goal was 58.3% to 58.6%. And what about earnings per share? They're expecting it to range from $4.96 to $5.00, up from $4.85 to $4.93.
- What happened during Q3 that's fueling this Q4 confidence, you ask? Well, their net revenue rose an impressive 19% to a staggering $2.2 billion in Q3. That's up 12% in North America and an insane 49% internationally!
The Lowdown:
"We're feelin' pretty pumped about our performance during the holiday season," said Lululemon's CFO, Meghan Frank, in a statement. "Our customers are lovin' our latest gear just as much as ever, and the sales are balanced across channels, categories, and geographies. That means we're able to raise our Q4 projections and close out another epic year."
Lululemon showed some serious momentum at the end of last year through Q3. Analysts with Jane Hali & Associates told Retail Dive last month that Lululemon was doing a bang-up job of keeping up with evolving trends and maintainin' a rockin' digital presence.
Frank stated in a previous earnings announcement last month that Q3 performance topped both top- and bottom-line expectations. "As we head towards the end of this fiscal year and into 2024, we're keeping our eyes on the prize – long-term growth and value creation for all stakeholders," Frank said.
In Q3, Lululemon bought back 0.6 million shares of stock. On November 29, the board of directors approved an additional stock repurchase for up to a whopping $1 billion of the company's shares.
Canada-based Lululemon has set its sights high, with a goal to double its 2021 net revenue of $6.25 billion to $12.5 billion by 2026. This ambitious plan, dubbed the Power of Three X2, focuses on product innovation, guest experience enhancement, and market expansion.
The growth strategy involves:
- Product Innovation: With new launches like the Glow Up Tight and the Daydrift Trouser, Lululemon is taking things to a whole new level. These lines feature advanced fabrics like Ultralu and Luxtreme, giving customers more than just clothing – it's a lifestyle investment.
- Guest Experience Enhancement: By deepening consumer connections through campaigns like "Live Like You’re Alive" and fostering a sense of community through events, workshops, and digital platforms, Lululemon is building diehard fans and encouraging brand advocacy.
- Market Expansion: Lululemon plans to open 40 to 45 new stores in 2025, with a 10% increase in square footage. This expansion includes venturing into new markets like Italy and increasing its international presence through franchising in regions like Denmark, Belgium, and the Czech Republic.
Lululemon's updated projections followed some controversial comments made by Lululemon founder, Chip Wilson. In a Forbes interview, Wilson dismissed the current diversity, equity, and inclusion efforts within his former company. He also said, "you've got to be clear that you don't want certain customers coming in." Critics called his comments tone-deaf, body-shaming, and insensitive.
Wilson resigned as chairman in 2013 and left the company nearly a decade ago. Nonetheless, the company distanced itself from Wilson's remarks, stating that "Chip Wilson does not speak for Lululemon, and his comments do not reflect our company views or beliefs." The statement added, "Chip has not been involved with the company since his resignation from the board in 2015 and we are a very different company today."
In a commitment to becoming a more diverse, inclusive, and welcoming company, Lululemon has made strides in its inclusion, diversity, equity, and action (IDEA) efforts. "We remain steadfast in our commitment to evolving into a more inclusive and diverse organization," said the company spokesperson. "This transformation takes time, but we're in it for the long haul and will continue to invest in making Lululemon a place where everyone is invited, supported, and empowered to reach their full potential."
Source: Forbes
- The updated earnings guidance from Lululemon suggests an increase in revenue for Q4, indicating a positive outlook for the athletic apparel industry.
- The financial industry is closely monitoring Lululemon's growth strategy, particularly the Power of Three X2 plan aimed at doubling the 2021 net revenue by 2026.
- Lululemon's Q4 revenue projections have been raised to a significant extent, nearly doubling the initial predictions, demonstrating impressive business growth and suggesting a strong performance in the retail market.
- Lululemon's gross margin outlook and earnings per share expectations have also been bumped up for Q4, indicating a positive financial environment for the company.
- Despite some controversial comments from Lululemon's founder, the company has made significant strides in its inclusion, diversity, equity, and action (IDEA) efforts, emphasizing a commitment to becoming a more welcoming and inclusive business.
- Lululemon's growth strategy involves product innovation, guest experience enhancement, and market expansion, with new initiatives aimed at strengthening customer connections, improving brand advocacy, and increasing international presence.
