Investing.com -- Shares in Lululemon athletica inc (O:LULU) surged by more than 7% on Monday after the Vancouver-based yoga-inspired athletic apparel company increased its forward guidance for the fourth quarter.
The improved outlook came as CEO Laurent Potdevin said the company reported stronger than expected earnings during the holiday period. During the fourth quarter, Lulemon now expects that its revenue will be in the range of $690 to $695 million, representing a spike of roughly 15% in comparison with the fourth quarter of fiscal year 2014.
On a constant dollar basis, the improved guidance represents an increase of nearly 20%. Previously, Lulemon anticipates finishing with revenues of $670 to $685 million for the period. The improved guidance, according to Lulemon, was spurred in part by an increase in the high-single digits in comparable sales on a constant dollar basis.
"We had a very successful holiday season driven by strong execution in stores and online during the key holiday weeks. Sales for the fourth quarter are exceeding expectations and gross margin rates and expenses remain in line with prior guidance. We are looking forward to 2016 and will enter the year with a very strong leadership team across the company that is relentlessly driving our strategic priorities and long term vision," Potdevin, said in a statement.
In addition, Lulemon expects that diluted earnings per share will now be in the range of 0.78 to 0.80, above previous EPS estimates of 0.75 to 0.78. The guidance is based on a diluted weighted-average of 139.0 million shares outstanding and a 29.5% tax rate, Lulemon said.
Lulemon improved its guidance ahead of its presentation at the ICR Conference in Orlando, Florida this week. Shares in Lulemon jumped 4.24 or 7.75% to 54.73 in after-hours trading.