(Reuters) – Lululemon Athletica Inc (LULU.O) raised its quarterly sales and profit outlook on Monday, as the Canadian apparel maker’s efforts to ramp up its online presence and broaden its range helped drive sales during the all-important holiday period.
FILE PHOTO: The logo for Lululemon Athletica is seen outside a retail store in New York City, U.S., March 30, 2017. REUTERS/Brendan McDermid
The company’s shares, which nearly doubled in value last year, were up about 3% in premarket trading.
The raised forecast comes after U.S. retailers, including Kohl’s Corp (KSS.N), Macy’s Inc (M.N) and J.C. Penney Co Inc (JCP.N), reported mixed holiday results amid intense competition from online sellers including Amazon.com Inc (AMZN.O).
“View these (Lululemon’s) results as industry leading and reflect the strength of product innovation, technology initiatives, marketing efforts and management execution,” MKM Partners analyst Roxanne Meyer said, raising the price target by $6 to $264.
Lululemon, known for its $100 yoga pants, has also invested to expand its loyalty program, improve its in-store shopping experience and develop new menswear products.
Meyer added that the higher fourth-quarter forecast implies that Lululemon had attracted new customers in the holiday season and reflects e-commerce sales growth in the low-30% range.
December data from Mastercard showed U.S. e-commerce sales in the period from Nov. 1 through Christmas Eve jumped 18.8%, while overall holiday retail sales, excluding autos, rose just 3.4%.
Lululemon now expects profit per share for the quarter ending Feb. 2 to be between $2.22 and $2.25, up from its prior range of $2.10 to $2.13.
The company also raised its net revenue forecast to between $1.37 billion and $1.38 billion, compared with its previous estimate of $1.32 billion to $1.33 billion.
Analysts on average were expecting a profit of $2.16 per share and revenue of $1.35 billion, according to IBES data from Refinitiv.
Reporting by Praveen Paramasivam in Bengaluru; Editing by Vinay Dwivedi