Lululemon raises forecast for the year as demand for athleisure sets in

Sept. 8 (Reuters) – Lululemon Athletica Inc (LULU.O) raised its forecast for the full year on Wednesday, after beating revenue and profit estimates following strong demand for its comfortable leggings and supports -sports bra, pushing the apparel maker’s shares up nearly 12%.

Sportswear manufacturers have seen strong demand over the past year as people train at home during the COVID-19 pandemic, boosting sales for Lululemon and other sportswear manufacturers including Nike Inc (NKE.N) and Under Armor Inc (UAA.N).

However, clothing manufacturers are now facing supply chain issues due to the novel coronavirus lockdowns in Vietnam as they are heavily dependent on the Southeast Asian country for manufacturing.

“Another wave of COVID-19 and associated plant closures in Vietnam, persistent problems at ports and reduced air cargo capacity are contributing to some disruption in the supply chain as well as a increased costs, ”said Calvin McDonald, CEO of Lululemon, in a post-benefit call.

“It’s fair to say that our business would have been even stronger without these (supply chain) challenges facing the industry.”

The company, however, said it was working to move production out of Vietnam where possible, increasing the use of air freight and prioritizing production for major fall holiday styles in order alleviate problems in its supply chain.

Home fitness platform owner Mirror said he now expects annual net income to be between $ 6.19 billion and $ 6.26 billion, down from 5.83 to 5.91 billion. billion dollars previously.

Lululemon expects adjusted earnings per share for the full year to be between $ 7.38 and $ 7.48, down from its previous range of $ 6.73 to $ 6.86.

Net revenue rose 61% to $ 1.45 billion in the second quarter, beating estimates of $ 1.34 billion, according to IBES data from Refinitiv.

On an adjusted basis, Lululemon earned $ 1.65 per share, compared to estimates of $ 1.19 per share.

Report by Mehr Bedi in Bangalore; Editing by Amy Caren Daniel

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