Yoga-apparel specialist Lululemon Athletica delivered strong quarterly comparable sales growth and, on the heels of record Thanksgiving holiday sales, said it was on track to meet its 2020 revenue target.
Despite the challenging environment facing retailers, Lululemon reported Wednesday that comp sales rose 8% in the third quarter, fueled by double-digit growth in online traffic. Analysts on average had expected a 5.3% increase.
Same-store sales increased 2% while direct-to-consumer net revenue rose 26%. Overall revenue jumped 14% to $619.0 million and adjusted earnings of $0.56 per share beat the consensus analysts’ forecast by 4 cents.
“While other players in the sports and athleisure market struggle, Lululemon continues to go from strength to strength,” Kevin Wathey, a consultant at research firm GlobalData Retail, told Reuters.
The company’s comparable sales growth “underlines the fact that Lululemon is still attracting new customers and is getting existing shoppers to spend more at both its stores and online,” he added.
Lulemon said targeted marketing efforts helped to attract new customers to its stores and website and generate more sales from loyal shoppers while innovative new fabrics used in its women’s pants boosted sales in the category by 24%.
After a Thanksgiving holiday when it experienced its highest traffic and largest sales ever on Black Friday and on Cyber Monday, Lulemon now expects fourth-quarter net revenue in the range of $870 million to $885 million and an adjusted profit of $1.19 to $1.22 per share.
Analyst on average were expecting revenue of $866 million and a profit of $1.17 per share.
“As we start the holiday season, I’m energized by our momentum and we are increasing guidance to reflect this performance,” CEO Laurent Potdevin said in a news release. “I’m grateful for the enthusiasm I see every day across our collective as we remain on our path to delivering $4 billion in revenue in 2020.”
Full fiscal 2017 revenue is projected to be in the range of $2.590 billion to $2.605 billion.