Shares of Lululemon Athletica Inc. (NASDAQ: LULU) had a great 2010 and the company had already risen after raising its guidance after earnings in early December. When things go well they must go incredibly well for this company. The company is raising its guidance yet again for the quarter that ends on January 30, 2011.
The new guidance is $0.55 to $0.57 EPS rather than its previous guidance of $0.46 to $0.48 EPS. For what it is worth, Lululemon’s estimate had been only $0.41 EPS.
The company is talking about stronger than anticipated net revenues for the quarter. Revenue is now put in a range of $237 to $239 million for the fourth quarter versus a prior range of $210 to $215 million.
If you want to know why, it seems Yoga must be everyone’s New Year’s Resolution… Comparable store sales for the fourth quarter are expected to show gains in the mid-twenties to upper-twenties on a constant-dollar basis. The prior guidance was “only” in the high-teens.
The gains are being seen in the retail and e-commerce channels and it is garnering stronger brand awareness and simultaneously investing for the future. The company noted that it “will be chasing inventory for the remainder of the fourth quarter and into the spring season.”
Lululemon plans to open 20 to 25 stores in fiscal 2011, but the company also said it plans to make key strategic investments to support its long-term growth trajectory. Maybe that is a buyout of another yoga-themed player, maybe not.
Our call for Lulu as a yoga monopoly might not be too far off the mark.
Lululemon shares closed down 1.7% at $67.24 today but the stock’s after-hours move shows shares trading north of $71.00. The 52-week trading range is $25.75 to $74.60.
JON C. OGG
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