Lululemon Athletica Inc. posted solid second-quarter earnings and revenues gains, as the active lifestyle brand transcends generally weak trends across apparel retailing.
On Thursday, Lululemon posted a second-quarter net profit of $341.6 million, an 18 percent jump from the $289.5 million reported in the year-ago quarter.
Diluted earnings per share were $2.68, compared to $2.26 in the second quarter of 2022. Adjusted diluted earnings per share were $2.20 in the second quarter of 2022.
In the quarter ended July 30, net revenue also increased 18 percent to $2.2 billion, or 20 percent on a constant dollar basis.
Calvin McDonald, chief executive officer, in his prepared statement, said, “Our Q2 results highlight the ongoing strength of the business amid a dynamic operating environment. I am proud of how our teams continue to deliver on our vision and offer an exciting pipeline of new products and experiences to our guests around the world. Our continued ability to gain market share and bring new customers into the brand illustrates the significant runway ahead for Lululemon.”
Meghan Frank, chief financial officer, stated: “Our performance remained strong in Q2 as both revenue and EPS exceeded our expectations. Our ongoing momentum is a reflection of our portfolio approach to growth, differentiated business model, and innovative product assortment. We are excited about our opportunities in the second half of the year and look forward to continue delivering on our Power of Three ×2 growth plan.”
For the third quarter of 2023, the company expects net revenue to be in the range of $2.165 billion to $2.19 billion, representing growth of 17 percent to 18 percent. Diluted earnings per share are expected to be in the range of $2.23 to $2.28 for the quarter. This assumes a tax rate of about 30.5 percent.
For 2023, the company expects net revenue to be in the range of $9.51 billion to $9.57 billion, representing growth of 17 to 18 percent. Diluted earnings per share are expected to be in the range of $12.02 to $12.17 for the year. This assumes a tax rate of about 30 percent.
The company’s Power of Three ×2 growth plan calls for a doubling of the business from 2021 net revenue of $6.25 billion to $12.5 billion by 2026. The key pillars of the plan are product innovation, guest experience, and market expansion and the growth strategy includes a plan to double men’s, double direct to consumer, and quadruple international net revenue relative to 2021.
