Lululemon (NASDAQ: LULU) reported better than expected third quarter earnings with sales of USD1.1 Billion, a 22% increase compared to the previous year. Due to strong e-commerce sales throughout the ongoing pandemic, the retailer has remained afloat. Despite the earnings beat, shares fell 1.1% during extended trading Thursday.
Within North America, revenue jumped 19%, steered by the growing e-commerce industry. Direct consumer revenue also rose 94% according to the company, totaling 42.8% of revenue in comparison to the previous years 26.9%.Signifying the sales the retailer makes directly to consumers, utilizing its stores and website, without the need of any external party.
The athleisure retailer has decided not to provide an itemized forecast for fiscal 2020 as a consequence of the COVID-19 pandemic. As a result of the global economic downturn Lululemon similar to other retailers, still face store closures
“LULU continues to attract more customers to the brand, retain its existing customers, and take market share during the pandemic, leveraging digital engagement in the midst of capacity constraints in the stores. We are confident, as LULU still has a small global footprint, that LULU will successfully continue to grow its market share through its ever-improving Peppiness,” Susquehanna analyst Sam Poser said.
The company reported earnings of USD1.16 a share in comparison to the anticipated USD0.88 a share. Revenue totaled USD1.12 Billion, higher than analysts expected USD1.02 Billion.
“While a V-shaped recovery may not be materializing for most of apparel retail, Lululemon has bounced back from the weak start to its year with a stunning set of third-quarter numbers,” GlobalData Retail Managing Director Neil Saunders said.
“Our data also show that Lululemon has picked up plenty of new shoppers, especially in womenswear,” he added.