Lululemon shares got a lift Thursday afternoon after the company reported better-than expected results for the second quarter.
The Vancouver, British Columbia-based athleisure brand reported that second quarter net revenues increased 29% to $1.9 billion versus an expected $1.77 billion. In North America, revenues increased 28%. Adjusted diluted earnings per share were $2.20 compared to $1.86 expected. Same store sales were up 23%.
In the wake of the results, Lululemon raised its guidance for fiscal year 2022 and now expects net revenue in the range of $7.865 billion to $7.940 billion. Adjusted diluted earnings per share are expected to fall between $9.75 and $9.90.
Lululemon’s shares were up 8% after markets closed on Thursday.
CEO Calvin McDonald attributed the results to a strong consumer response to “product innovations, community activations, and omni experience.” Lululemon typically caters to higher-income shoppers that have been less impacted overall by inflationary pressures.
“As we look ahead, we’re excited about our ability to successfully deliver against our Power of Three ×2 growth plan and create ongoing value for all our stakeholders,” he added in a statement, referring to a previously stated goal to double business from 2021’s net revenue of $6.25 billion to $12.5 billion by 2026.
In April, Lululemon announced this five-year plan, which also involves doubling its men’s and DTC business as well as quadrupling its international net revenue compared to 2021. In line with this plan, Lululemon is introducing new products, improving the guest experience and expanding into new markets.
For example, Lululemon launched footwear for women earlier this year and plans to roll out a line for men as well.
The company has also made progress in its DTC growth. Net revenue in these channels in Q2 increased 30%, or 32% on a constant dollar basis, representing 42% of total net revenue compared to 41% in the second quarter of 2021.
“Our teams continue to execute at a high level, which is driving our strong financial and business performance,” said CFO Meghan Frank in a statement. “Despite the challenges around us in the macro-environment, guest traffic in our stores and on our e-commerce sites remains robust, which speaks to the strength of our multi-dimensional operating model. I am pleased with our start to the third quarter and believe we are well positioned for the fall and holiday seasons.”