Lululemon Stock Surges 4% in 2023 Amid Soaring Chinese Demand and Record Earnings
Lululemon reports a remarkable 61% revenue surge in China, driving international sales up 52% and boosting gross profits by 23%. The company raises its 2023 revenue forecast to $9.57 billion.
Lululemon Athletica Inc. (LULU) saw its shares jump 4% in early trading on Friday, fueled by a robust second-quarter earnings report highlighted by exceptional growth in Chinese markets.
Highlights
- Chinese market revenue skyrocketed by 61% year-over-year, significantly contributing to overall international growth.
- Gross profit climbed 23% to $1.3 billion compared to the same quarter last year.
- The company raised its full-year revenue guidance for 2023 to between $9.51 billion and $9.57 billion.
Net revenue reached $2.2 billion, marking an 18% increase year-over-year, while income from operations grew 19% to $479.3 million. Earnings per share also exceeded expectations, reflecting the company's strong operational performance.
CEO Calvin McDonald emphasized that the outstanding results were driven largely by the Chinese market's rapid expansion, which propelled international revenue growth to 52%. Lululemon plans to open 35 new stores internationally by year-end, with the majority situated in China to capitalize on this momentum.
Direct-to-consumer sales rose 15% during the quarter, underscoring the brand’s growing connection with customers worldwide.
However, McDonald noted a challenge remains in brand recognition, with unaided brand awareness at just 25% in the U.S. and even lower single-digit figures outside North America, excluding the UK and Australia.
Overall, Lululemon’s strong financial performance and optimistic outlook position it well for continued growth throughout 2023 and beyond.
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