Lululemon Athletica Inc raised its full-year forecast on Wednesday, after beating income and revenue estimates on robust demand for its comfy leggings and sports activities bras, sending the attire maker’s shares up almost 12 p.c.
Sportswear makers noticed robust demand over the previous yr as folks labored out at house in the course of the COVID-19 pandemic, spurring gross sales of Lululemon and different athletic put on makers, together with Nike Inc and Underneath Armour Inc.
Nevertheless, attire makers are actually dealing with provide chain hiccups as a result of new coronavirus-led lockdowns in Vietnam, as they rely closely on the southeast Asian nation for manufacturing.
“One other wave of COVID-19 and associated manufacturing unit closures in Vietnam, ongoing points on the ports and lowered air freight capability are contributing to some disruptions inside the provide chain in addition to elevated prices,” Calvin McDonald, Lululemon’s chief govt officer, stated in a post-earnings name.
“It’s honest to say that our enterprise would have been even stronger with out these (provide chain) challenges dealing with the trade.”
The corporate, nonetheless, stated it was engaged on shifting manufacturing out of Vietnam wherever attainable, growing the usage of air freight and prioritising manufacturing for key fall vacation types to mitigate its provide chain woes.
The proprietor of Mirror home-fitness platform stated it now expects annual net income to be within the vary of $6.19 billion to $6.26 billion, in contrast with its prior vary of $5.83 billion to $5.91 billion.
Lululemon forecast full-year adjusted earnings per share to be between $7.38 and $7.48, in contrast with its prior vary of $6.73 to $6.86.
Web income rose by 61 p.c to $1.45 billion within the second quarter, beating estimates of $1.34 billion, in keeping with IBES information from Refinitiv.
On an adjusted foundation, Lululemon earned $1.65 per share, in contrast with estimates’ of $1.19 per share.
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https://www.businessoffashion.com/news/retail/lululemon-raises-full-year-forecast-betting-on-strong-athleisure-demand | Lululemon Raises Full-12 months Forecast Betting on Sturdy Athleisure Demand