Shares of Lululemon Athletica Inc soared 15 per cent in early trade on Friday, after the premium apparel retailer defied investor worries with a full-year outlook lift amid little pullback from consumers and a sharp rebound in China sales.
The rosy outlook comes in contrast to the general trend of U.S. retailers ranging from Macy’s to Dollar General warning of weak discretionary spending by American consumers.
At least 11 brokerages raised price targets on the company, with Piper Sandler hiking by the highest margin to $445, above the median of $424.
“We think (Lululemon) is one of the select brands continuing to drive outsized demand in this more challenging macro environment with innovation and newness,” said Abbie Zvejnieks, analyst at Piper Sandler.
Global News Morning Market and Business Report – March 29, 2023
Lululemon’s first-quarter results also beat estimates as the company saw traffic across both its stores and online go up about 30 per cent.
“Lululemon’s stores continue to be a key catalyst for customer retention and acquisition,” analysts at TD Cowen wrote in a note.
The company also reported a 79 per cent rise in sales in China, bolstered by the rollback of COVID restrictions. Lululemon’s exposure to China could be “a solid source of sales and margin upside for the rest of the year,” analysts at Barclays wrote in a note.
A loyal customer base has also given the company a leg up, helping it sell more of its popular products, such as the Align high-rise yoga pants which retails between $98 and $118, at full price, even amid an uncertain economy.
U.S. Senate passes debt ceiling bill to prevent default, set to become law
Wild bodycam video shows car sent soaring after hitting tow truck ramp
BIV: Nike taking Lululemon to court
“Lululemon is just very popular right now and seems to be immune from the slowing trend,” David Swartz, an analyst at Morningstar Research said.
The company’s strong results also lifted shares of other athletic wear makers including Nike Inc and Athleta owner Gap Inc by 4 per cent and 3 per cent, respectively. Shares of European sportswear companies Adidas and Puma were also up.
(Reporting by Savyata Mishra and Aishwarya Venugopal in Bengaluru; Editing by Krishna Chandra Eluri)
Denial of responsibility! Bulletin Reporter is an automatic aggregator around the global media. All the content are available free on Internet. We have just arranged it in one platform for educational purpose only. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials on our website, please contact us by email – admin@ bulletinreporter.com . The content will be deleted within 24 hours.