Lululemon Athletica, the popular Canadian sportswear brand, has announced an increase in its full-year revenue and profit forecasts. The company credits strong demand for its athleisure products as the primary factor contributing to its success. Lululemon also revealed that the impact of Covid-19 lockdowns in China was minimal and offset by strong performance in other regions.

Despite recent price hikes, loyal customers in the affluent U.S. market have shown unwavering support for Lululemon, helping the brand maintain its sales momentum. Interestingly, these customers seem unaffected by the high inflation rates currently affecting the country.

Similar to many other U.S. companies, Lululemon has had to raise prices due to rising costs caused by disruptions in the global supply chain. However, Chief Executive Officer Calvin McDonald assured stakeholders that the price increases did not negatively impact sales volume. Nonetheless, the company remains cautious about implementing further price hikes during this uncertain period.

Analysts suggest that Lululemon’s luxury products are more insulated from the effects of inflation, and the brand is expected to thrive despite these challenges. In contrast, rival companies Under Armour and Adidas have reported a negative impact on their business due to renewed Covid restrictions in China.

Following the announcement, Lululemon’s shares experienced a 2% increase during extended trading, indicating investor confidence in the brand’s future. The company also exceeded expectations with its first-quarter earnings and provided a positive outlook for the current quarter.

Lululemon now anticipates its full-year 2022 revenue to range between $7.61 billion and $7.71 billion, surpassing its previous forecast. Additionally, the brand has revised its profit forecast to be between $9.42 and $9.57 per share, up from its earlier estimate. Furthermore, Lululemon’s adjusted profit for 2022 is expected to surpass analysts’ average estimate, according to data from Refinitiv.

Despite the challenges posed by inflation and pandemic-related disruptions, Lululemon’s optimistic forecast demonstrates its resilience and ability to adapt to changing market conditions. The brand’s commitment to providing high-quality athleisure products continues to resonate with consumers, enabling Lululemon to maintain its upward trajectory in the sportswear industry.

Useful Links:
1. CNBC: Lululemon raises full-year guidance based on strength in regions like the US and Europe
2. Bloomberg: Lululemon Boosts Full-Year Outlook on Demand for Athleisure Wear