(Reuters) -Lululemon Athletica Inc raised its holiday quarter revenue and profit forecasts on Thursday, as the COVID-19 pandemic induced popularity of home workouts boosted demand for athleisure apparel.
Spiking coronavirus infections and ensuing capacity restrictions imposed in multiple markets would, however, limit fourth-quarter productivity levels to only about 70% of last year, the company warned, causing a marginal slip in its shares.
The shares have gained about 60% this year, boosted by robust demand for comfortable athletic clothing as gym closures led people to workout more at home. Online comparable sales surged 93% in the third quarter, which more than compensated for declines in store traffic.
Sales at retail stores during the holiday season may remain down, as surging virus infections in the United States and Europe and new lockdown measures keep consumers away from high-street shopping.
Still, Lululemon said it expects fourth-quarter revenue to rise by a mid-to-high teens percentage, compared to its prior forecast of a high single to low double-digit increase. Analysts estimate a 14.4% increase, according to IBES data from Refinitiv.
Fourth-quarter adjusted earnings per share is expected to rise by mid-single-digits, up from a prior forecast of a modest decline.
Net revenue rose 22% to $1.12 billion in the third quarter ended Nov. 1, beating analysts’ average estimate of $1.02 billion.
Excluding certain items, Lululemon earned $1.16 per share, beating estimates of 88 cents per share.
(Reporting by Uday Sampath and Mehr Bedi in Bengaluru; Editing by Shinjini Ganguli)