- Lululemon Athletica closed the fiscal year with ordinary revenues of more than 8 billion dollars, surpassing estimates, but seeing its earnings decline.
- It recorded 36 percent growth in global sales, with a 30 percent increase in the U.S. market.
- The Canadian company’s strategy is based on product innovation, customer experience and global expansion, with the goal of obtaining more than 12 billion dollars in sales by 2026.
Lululemon Athletica closed the fiscal year with ordinary revenues of more than 8 billion dollars, slightly higher than the expected turnover of 7.99 billion dollars.
The Canadian company met its forecasts in its last fiscal year, but the group saw its earnings decline.
Specifically, the fashion and sports equipment company closed the year with revenues of more than 8 billion dollars, an increase of almost 30 percent over the previous year.
Lululemon slightly exceeded the estimate, which meant a turnover of 7.99 billion dollars.
On the other hand, profits fell by 15 percent to $855 million compared to the $976 million achieved in fiscal 2021.
It all got complicated in the last quarter, when the company began to register a slump in profits, which stood at almost $120 million, compared to $435 million for the same period in the previous fiscal year.
Evidently there, at the end of its fiscal year, is where the big problems were for Lululemon’s accounts.
The Canadian company posted a 36 percent growth in sales in the global market.
Specifically, it highlighted a 30 percent revenue increase in the key market for the sportswear firm, the U.S. region.
Meghan Frank, the group’s financial manager, expressed her satisfaction with the figures and explained that “there is optimism for continued growth”.
During 2022, the company opened more than 80 new physical stores, ending the year with 655 company-owned stores located in 20 countries.
Lululemon expects to close the year with an increase of 16 percent.
The group founded in the city of Vancouver, Canada, has already published its forecasts for this year, which are to obtain a turnover of between 1,895 million dollars and 1,935 million dollars during the first three months of the current fiscal year.
For the full year 2023, Lululemon estimates revenues of between US$9.31 billion and US$9.42 billion, which would mean an increase of 15 percent compared to last year’s figures.
Calvin McDonald, CEO of Lululemon, indicated in a press release that as 2023 progresses, they continue to project another very satisfactory fiscal year worldwide. He added that they also want to achieve their “Power of Threex2” growth plan for the company’s future.
Strategy with shares
With this new strategy, the Canadian firm expects to significantly increase its sales by 2026, to more than $12 billion.
The bases of this project are product innovation, customer experience and global expansion.
Investors could expect Lululemon’s shares to continue to rise and, in that context, the recommendation would be to buy. The problem is that for more than four years now, the company has been promising a rebound in earnings that, objectively, never comes.
Thus, there are two ways: buy and wait for the “hold” to bear fruit; or wait to see which way Lululemon’s share price will go. If they break through resistance, buy. If they break through support, forget about it for a while.
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