The Canadian apparel maker, Lululemon Athletica, announced on Monday that its sales remained upbeat in 2019’s holiday season. The company cited its commitment towards creating an online existence and widening the range of products to have helped improve its sales figures towards the end of 2019.
In premarket trading on Monday, Lululemon’s stock was seen trading 3% higher. Lululemon turned out to be one of the best performing stocks in 2019 that has almost doubled its value in the past 12 months. The stock opened at around $122 in January 2019. Remaining above the opening level throughout the year, the stock has recently hit a record high of $246 on Tuesday. At the time of writing, the $31.75 billion company is settling around $243 per share.
Lululemon’s American Competitors Cited Intense Competition With Online Retailers
In light of the upbeat sales performance in the holiday season, the apparel maker has revised and upgraded its sales and profit outlook for the recent quarter. The upbeat performance and upgraded forecast came as a major good news for the Canadian retailer as its U.S counterparts such as J.C Penney, Macy’s, and Kohl’s have recently highlighted mixed results for the holiday season citing intense competition with online retailers like Amazon.
Analyst Roxanne Meyer of MKM Partners commented on Lululemon’s holiday sales and highlighted the crucial role that product innovation, marketing efforts, technology initiatives, and management execution plays in improving a business’s performance. The analyst further upgraded her price target for Lululemon by $6 to $264.
Lululemon Expanded The Loyalty Program And Launched A New Range Of Menswear Products
Other recent changes at Lululemon include expansion of the company’s loyalty program, a new range of menswear products, and improvements directed at the in-store shopping experience. As per Meyer, upgrading the forecast for Q4 suggests that the company succeeded in making new customers during 2019’s holiday season. The e-commerce sales, the analyst added, have also noted growth a little over 30%.
For the fourth quarter that will end on February 2nd, Lululemon is now expecting to make $2.22 to $2.25 of profit per share. In the previous estimate, the profit per share was capped at $2.13. On the net revenues front, the company upgraded its forecast to $1.37 to $1.38 billion from the previously estimated $1.33 billion for the fourth quarter. According to Refinitiv, analysts, on the other hand, have forecast $2.16 of earnings per share for Lululemon in Q4 while the estimate for revenue was reported at $1.35 billion.