(Reuters) -Lululemon Athletica increased its full-year revenue and profit forecasts on Thursday, betting on resilient demand for its athletic wear in the U.S. during the holiday shopping season, sending its shares up about 5% in extended trading.
The company, like its peers, has had to keep its foot on the pedal when it comes to introducing fresh colors and prints for its leggings to keep consumers engaged.
“We are pleased with the start to our holiday season,” Lululemon’s CEO Calvin McDonald said, after the company also edged past market expectations for third-quarter revenue.
The company now expects fiscal year 2024 revenue between $10.452 billion and $10.487 billion, compared with its prior forecast range of $10.375 billion to $10.475 billion.
Activewear brands have seen strong demand over the past few quarters, with Under Armour lifting its annual profit target last month, benefiting from a turnaround strategy focused on saving costs and selling its core brands at full price.
Similarly, Gap’s Athleta brand returned to positive growth last month as the company’s focus on fresh styles and sleek marketing campaigns generated demand.
Lululemon said on Thursday it had approved a $1 billion increase to its stock repurchase program on Dec. 3.
The company reported quarterly revenue of $2.40 billion, compared with the average analyst estimate of $2.36 billion, according to data compiled by LSEG.
Gross margins rose 150 basis points, compared with an 80-basis points increase in the second quarter.
Lululemon also raised its diluted earnings per share forecast for 2024 to between $14.08 and $14.16, from its prior range of $13.95 to $14.15.
On an adjusted basis, the company earned $2.87 per share in the third quarter, beating estimates of $2.69.
(Reporting by Juveria Tabassum in Bengaluru; Editing by Shounak Dasgupta)
