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Investing.com – Lululemon Athletica (NASDAQ:LULU) stock will be under watch when trading starts Friday after the leisurewear-maker boosted its annual sales growth outlook but also warned of a hit to demand from the new variants of the coronavirus.
The company said further resurgences could hurt consumer demand and further disrupt supply chain even as most of its retail locations are currently open.
While supply chain bottlenecks continued to be a challenge in the third quarter – suppliers’ factories were shut in Vietnam due to pandemic restrictions — the company overcame them by shifting some production elsewhere. According to Reuters, the company used pricier air freight more and prioritized production for key holiday styles to tackle supply-chain bottlenecks.
For the ongoing financial year, Lululemon expects net revenue to be $6.27 billion at center of the guidance, up from its previous forecast of around $6.23 billion at midpoint of the range.
Chief Executive Officer Calvin McDonald said he was “pleased with our early holiday season performance”.
The company brightened its outlook after third-quarter net revenue rose 30% to $1.5 billion as people refuse to ditch the pandemic-induced habit of wearing casual clothing for both office work and domestic chores.
Net revenue increased 28% in North America and increased 40% internationally. Total comparable sales rose 27%.
Adjusted profit per share came in at $1.62 and beat estimates.
For the current quarter, the company expects net revenue to be $2.14 billion at center of the guidance range.
