Even though Lululemon’s sales struggles have continued throughout the first nine months of this year, the athleisure retailer once again proved that in a changing consumer landscape — and a fashion industry generally in transition — it’s still the go-to yoga brand.
For the three months ended Nov. 2, Lululemon reported a 34 percent gain in revenues over the previous year, to $1.2 billion. Profit jumped 30 percent to $111.7 million, versus $85.4 million a year ago. Net earnings amounted to 48 cents per share, easily beating analysts’ estimates. Lululemon’s revenue was well ahead of the $1.1 billion that analysts had projected.
Earlier this year, the retailer confirmed that its manufacturing problems in the early months of 2018 would delay shipments of women’s bottoms, forcing it to rely on its women’s shorts, which, in turn, led to shortages in some locations. But that seems to have lessened as demand in the fourth quarter has stabilized.
Epsilon surveyed shoppers and found that people at the bottom of the Lululemon customer satisfaction scale are also among the hardest-hit.
“The product is top-of-mind with customers even when their prices are going up,” Ms. Davis said. “We see that people are focused on quality.”
Lululemon’s bumpy sales performance in 2018 have made the outlook a bit more complicated. It offered guidance on Tuesday for the next quarter’s net revenues of $575 million to $585 million, about in line with what Wall Street analysts were expecting. But for the coming fiscal year, it forecast a range of $2.16 billion to $2.2 billion, ahead of analysts’ consensus forecast of $2.13 billion.
When you think about it, any gains that Lululemon could squeeze out of its stores would do, given that the brand just closed 40 stores after its acquisition by Nike and its participation in women’s fitness is already more prevalent — and therefore less relevant — than it used to be.
Nike has fared much better. Sales at its own stores increased 15 percent during the third quarter over the same period a year ago. Same-store sales at its namesake brand, the metric it favors, rose 5 percent.
Read the full story on The New York Times.
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