Lululemon says holiday season was better than expected, raises earnings and revenue guidance

Core Insights - Lululemon raised its fourth quarter earnings and revenue guidance due to strong holiday season sales, expecting sales growth of 11% to 12%, amounting to $3.56 billion to$3.58 billion, up from a previous estimate of $3.48 billion to$3.51 billion [1][2] - The company also increased its earnings per share forecast to between $5.81 and$5.85, compared to the earlier guidance of $5.56 to$5.64, and anticipates gross margins to improve by 0.3 percentage points [2] Sales Performance - The positive response from shoppers during the holiday season has led to an optimistic outlook for the fourth quarter, as noted by the finance chief [3] - Retail sales in the U.S. for the holiday season, excluding automotive sales, increased by 3.8% year over year from November 1 to December 24, indicating a better-than-expected performance [6] Market Context - Lululemon's updated guidance was released ahead of the annual ICR conference, where major U.S. retailers will discuss early holiday results and performance with investors [4] - The company had previously provided cautious guidance for the holiday season, reflecting a prudent approach due to a shortened shopping season and an uncertain macroeconomic environment [5]