Lululemon’s Stock Surges on Updated Outlook

The new guidance is based on higher than previously expected comparable sales.

Lululemon Athletica’s stock is having a good day.

Shares of the sports apparel and accessory company surged nearly 9 percent Monday morning to more than $143 after the company updated its current quarter guidance.

Now, for the fourth quarter fiscal year 2018, which ends Feb. 3, Lululemon is expecting sales revenues between $1.14 billion to $1.15 billion, up from its previous guidance between $1.11 billion and $1.12 billion.

While the holiday shopping season was somewhat underwhelming for some retailers, Lululemon was a stand-out star. In fact, the company, known for its popular ath-leisure offerings, credits the strength of comparable-store sales for the updated expectations. Earlier, Lulu anticipated same-store sales to rise in the high-single to low-double digits, but now expects an increase of mid- to high-teens. That means investors can expect earnings-per-share to be between $1.72 to $1.74, up from $1.64 to $1.67 a share.

“The momentum in our business remained strong throughout the holiday season, reflecting the ongoing success of our product offerings and our connection with guests around the globe,” Calvin McDonald, chief executive officer of Lululemon, said in a statement. “I speak for the entire leadership team in thanking all our teams around the world for delivering a strong 2018.”

Not only is Lululemon delivering an exceptional quarter, but it’s had an exceptional year. Shares have risen 78 percent year-over-year. The 20-year-old Canadian company topped earnings expectations during the third quarter, continuing on its path to sell $4 billion worth of goods by 2020. Although some analysts think the company will hit that mark much sooner.

In addition, Lululemon is expecting further tax breaks during the quarter, which are not factored into the retailer’s outlook.

“We view Lululemon as an impressive growth story, with a best-in-class retail leadership team at the helm and see cutting-edge data analytics and an advanced technology platform on the forefront of wins over the next several years,” Jen Redding, an analyst at Wedbush, wrote in a recent note.

The Vancouver-based company is meeting with analysts and investors at ICR in Orlando, Fla., this week.

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