The athleisure- and sports-apparel-maker, Lululemon, reported first quarter fiscal results for 2022. The company beat estimates on both the top and bottom lines, with revenue up 32% year-over-year to $1.6 billion. Same-store sales, which track revenue online and at stores that have been open for at least 12 months, rose 28% from the prior year.
The retailer reported a 31% increase in net income to $190 million, or $1.48 per share, compared with net income of $145 million, or $1.11 a share, a year earlier.
Lululemon’s revenue grew roughly 32% to $1.61 billion from $1.23 billion a year earlier. Women’s sales were up 24% on a three-year basis, and the menswear division grew revenues 30% versus 2019 levels.
Gross profit increased 24% year-on-year to $870.4 million and gross margins contracted 320 basis points to 53.9%.
The company said that so far consumers so far aren’t balking at higher prices on leggings and sports bras. It also hiked its financial outlook for fiscal 2022 despite broader economic headwinds, which include inflation and supply chain bottlenecks. Lululemon sees sales in fiscal 2022 in a range of $7.61 billion to $7.71 billion, up from a prior forecast of $7.49 billion to $7.62 billion. The company expects to earn, on an adjusted basis, between $9.35 and $9.50 per share, up from a prior range of $9.15 to $9.35.
Lululemon is a fantastic business servicing a higher LSM clientele, and it benefitted greatly from pandemic lockdown rules. Now that sports events and travel outside the home is possible (in some parts of the world) stretchy pants and comfortable sportswear is still in vogue. The company has also broadened its options to include footwear and skin-care products. We are rather holders of shares of Nike in the athleisure space in portfolios and the Cratos BCI WW flexible fund for similar reason expressed above.