Lululemon raises revenue guidance, but lowers expectations for gross margins

VANCOUVER — Lululemon Athletica Inc. raised its revenue guidance for its fourth quarter, but lowered its expectations for its gross margins.

The company, which keeps its books in U.S. dollars, says it expects net revenue for the quarter will be in a range of US$2.66 billion to US$2.7 billion, compared with its earlier guidance for a range of US$2.605 billion to US$2.655 billion.

The guidance implies an increase in revenue of 25 to 27 per cent compared with the same quarter a year earlier.

However, the company says it expects its gross margins for its fourth quarter to decline compared with earlier expectations that they would rise.

The athletic clothing maker says it expects gross margins for the fourth quarter of its 2022 financial year to decline 90 to 110 basis points compared with earlier expectations for an increase of 10 to 20 basis points. (A basis point is one-hundredth of a percentage point.)

Lululemon's diluted earnings per share are now expected to be in a range of US$4.22 to US$4.27 for the quarter compared with the company’s previous guidance for a range of US$4.2 to US$4.3.

This report by The Canadian Press was first published Jan. 9, 2023.

The Canadian Press