Athletic apparel chain Lululemon Athletica Inc raised its full-year profit and revenue forecasts on Thursday, even as it warned that demand for its products could slip because of the spread of new COVID-19 variants.
People stuck at home during the lockdowns last year ditched dresses and jeans for more comfortable athleisure clothing, benefiting Lululemon, Aerie, Athleta, and prompting others, including Kim Kardashian's shapewear brand Skims, to enter the fray.
The companies are still booking sales benefits about two years later, but Lululemon said on Thursday additional pandemic-related restrictions, including temporarily closing all or some of its stores, could worsen its supply-chain issues.
Canada-based Lululemon has already had to shift some production out of lockdown-hit Vietnam, increase the use of pricier air freight and prioritize production for key holiday styles to tackle supply issues that are plaguing the apparel industry.
Still, the company said it expects its full-year adjusted earnings per share to be between $7.69 and $7.76, compared with its prior forecast of $7.38 to $7.48. Analysts had expected annual adjusted earnings of $7.51 per share, according to Refinitiv IBES data.
Lululemon now expects its annual revenue to be between $6.25 billion and $6.29 billion, compared with its previous outlook of $6.19 billion to $6.26 billion. Analysts had expected full-year revenue of $6.27 billion.
The company's shares fell 2.14% to $408 in after hour trading.
Lululemon's revenue rose to $1.45 billion in the third quarter, compared with estimates of $1.44 billion. On an adjusted basis, the company earned $1.62 per share, beating estimates of $1.41.
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