Lululemon Athletica Inc. forecast higher than estimated annual revenue and profit on Wednesday as demand for its comfortable leggings and sports bras remained strong despite the easing of restrictions on coronaviruses.
Shares rose 13% to $ 430.62 after the company also posted better-than-expected quarterly results. Investors traded more than $ 500 million in stock after the bell, according to data from Refinitiv.
Sportswear manufacturers have seen strong demand over the past year as people workout at home during the COVID-19 pandemic, boosting sales for Lululemon and other sportswear manufacturers, notably Nike Inc and Under Armor Inc.
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.
The company added, however, that 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 to alleviate problems in its supply chain.
The owner of home fitness platform Mirror said he now expects annual net income to be between $ 6.19 billion and $ 6.26 billion, above estimates of $ 5 billion. $ 94 billion.
Lululemon expects adjusted earnings per share for the full year to be between $ 7.38 and $ 7.48, compared to the average analyst estimate of $ 6.91.
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.
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