Investing.com -- Shares of lululemon athletica inc. (NASDAQ: NASDAQ:LULU) climbed 4% following an announcement from the company that it has raised its revenue and earnings expectations for the fourth quarter ahead of the ICR Conference.
The upscale athletic apparel company now anticipates net revenue for the fourth quarter to be between $3.56 billion and $3.58 billion, marking an 11% to 12% increase compared to the same quarter last year, or a 6% to 7% rise when excluding the additional week in fiscal 2024. This updated forecast surpasses the previous guidance range of $3.475 billion to $3.51 billion.
Lululemon also expects diluted earnings per share (EPS) to be in the range of $5.81 to $5.85 for the quarter, up from the prior guidance of $5.56 to $5.64. This adjustment comes on the back of a strong holiday season, where the company saw a positive response to its product offerings.
Additionally, the company projects a gross margin increase of approximately 30 basis points relative to the fourth quarter of the previous fiscal year. This is a significant shift from the earlier guidance, which anticipated a decrease of 20 to 30 basis points. Selling, general, and administrative expenses are expected to deleverage by 80 to 90 basis points compared to the same period last year, which is slightly better than the previous guidance of a 90 to 100 basis point deleverage.
BTIG analyst Janine Stichter commented on the update, stating, "Ahead of the ICR conference, LULU raised its Q4 guidance above expectations, based on both sales and margin upside, with the company noting a strong response to its product offering."
Chief Financial Officer Meghan Frank added, "During the holiday season, our guests responded well to our product offering, enabling us to increase our fourth quarter guidance. As we close out our 2024 fiscal year, I want to thank our teams around the world for their hard work and ongoing commitment to supporting our guests and communities."
The company is set to meet with analysts and investors at the ICR Conference from January 13-15, 2025.
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