Lululemon Shares Gain the Most in Six Months on Upbeat ForecastBy
Company tops third-quarter estimates and boosts its forecast
Nike, Under Armour had raised concerns about the industry
Lululemon Athletica Inc. rose the most in six months after boosting its forecast, allaying fears that the athleisure market has lost a step.
The yoga-pants maker now expects earnings of as much as $2.48 a share this year, excluding some items. That compares with a previous range of up to $2.42. Lululemon also topped analysts’ estimates with its third-quarter sales and profit.
The upbeat results give Lululemon fresh momentum as it heads into the crucial holiday season -- and signal that sporty apparel isn’t falling out of favor with consumers. Nike Inc. and Under Armour Inc. have seen sales stall this year, stoking fears that peers like Lululemon will suffer as well. But Chief Executive Officer Laurent Potdevin has been working to keep the company growing by adding new products and entering overseas markets.
“As we start the holiday season, I’m energized by our momentum,” Potdevin said in a statement. “We are increasing guidance to reflect this performance.”
The shares rose as much as 8.9 percent to $73.70 on Thursday, the biggest intraday increase since June 2. They had climbed 4.1 percent this year through Wednesday’s close.
Third-quarter earnings amounted to 56 cents, excluding certain items. That topped the 52-cent estimate. Comparable sales grew 8 percent, beating the 5.2 percent average estimate compiled by Consensus Metrix.