Lululemon Athletica, Inc (NASDAQ: LULU) shares spiked after the retailer reported 24% sales growth and raised its full-year guidance.
Shares of the athleisure company rose by 11.3% on Friday on the heels of an impressive first-quarter (Q1) earnings report, according to Benzinga Pro.
For the first quarter of 2023, Lululemon's success as a premium retailer was evident when it boasted a 24% surge in net revenue to $2 billion compared to the same three-month timeframe in 2022.
- Net revenue increased 17% in North America, and roughly 60% internationally.
- China, alone, saw revenue pop 79% in Q1.
- Total comparable sales climbed 14%, or 17% on a constant dollar basis.
- Comparable store sales enjoyed a 13% boost, or 16% on a constant dollar basis.
- Direct-to-consumer net revenue increased 16%, or 18% on a constant dollar basis, and represented 42% of total net revenue compared to 45% for Q1 in 2022.
- Gross profit increased 32% to $1.2 billion.
- Income from operations increased 54% to $401.4 million.
Lululemon, which touts a total of 662 stores, seems to be bucking a trend. For all this talk of a looming recession, one would expect shoppers to cut back on high-end outlets and spend more at discount retailers.
That doesn't seem to be the case. Just hold up Lululemon to companies like Walmart Inc (NYSE: WMT), Costco Wholesale Corp (NYSE: COST) and Dollar General Corp. (NYSE: DG).
Walmart
- While Lululemon posted double-digit percentage gains, Arkansas-based Walmart had a more modest report and remains cautious for the months ahead.
- The company reported Q1 sales of 7.8% on May 18. It also upped its expectations for the fiscal year, predicting 3.5% growth in consolidated net sales.
- In terms of total revenue for the three-month period, Walmart expected about $149 billion, but reported more than $152 billion - just over $141.5 billion in 2022.
- Same-store sales climbed 7.4% year-over-year.
- The big-box wholesale club saw sales growth slow in the fiscal 2023 3Q, reporting smaller net and comparable sales gains.
- Total revenue of $53.65 billion was up from last year's $52.6 billion in the same quarter, but missed a Street consensus estimate of $54.57 billion.
- Costco also reported net sales of $52.6 billion. That's up just 1.9% year-over-year. And membership revenue for the period was up just 1.6%.
- The Tennessee-based company is seeing a decrease in customer traffic, resulting in worse-than-expected Q1 results.
- EPS decreased 2.9% to $2.34 and missed the analyst consensus of $2.38.
- Dollar General also reported sales growth of 6.8% year-on-year to $9.34 billion, missing the consensus of $9.46 billion.
- Net sales growth fell between 3.5%-5.0%, compared to its previous expectation of 5.5%-6%.
- Same-store sales increased a paltry 1.6% compared to the first quarter of 2022.