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Earnings Results: Lululemon stock jumps after reporting $6 billion in annual sales for the first time, forecasting more growth

Lululemon Athletica Inc. topped $6 billion in sales for the first time in 2021, and executives expect it to hit $7.5 billion this year, sending shares higher in late trading Tuesday.

Lululemon
LULU,
+3.67%

reported fourth-quarter profit of $434.5 million, or $3.36 a share, on sales of $2.13 billion, up from $1.73 billion in the same period a year ago. After adjusting for acquisition- and investment-related costs, the athletic-clothing company reported earnings of $3.37 a share, up from $2.58 a share a year ago.

Analysts on average expected adjusted earnings of $3.27 a share on sales of $2.14 billion, according to FactSet. Shares rose more than 5% in after-hours trading immediately following the release of the results, after closing with a 3.7% increase at $343.97.

For the full year, Lululemon’s profit increased 65.6% to $975.3 million, while revenue increased 42.1% to $6.26 billion.

“2021 was another successful year for Lululemon, which speaks to the enduring strength of our brand and our ability to deliver sustained growth across the business,” Chief Executive Calvin McDonald said in a statement. “We are proud that we passed the $6 billion in annual revenue milestone for the first time, and successfully achieved our Power of Three growth target ahead of schedule.”

Lululemon executives expect growth to continue as they look to expand into new categories such as mens’ wear and shoes, and beat analysts’ expectations with their forecast. They guided for first-quarter earnings of $1.38 to $1.43 a share on sales of $1.525 billion to $1.55 billion, and full-year earnings of $91.5 to $9.35 a share on sales of $7.49 billion to $7.62 billion. Analysts on average were expecting first-quarter earnings of $1.28 a share on revenue of $1.41 billion, and annual earnings of $9.06 a share on sales of $7.24 billion, according to FactSet.

Lululemon stock has gained 9.2% in the past year, as the S&P 500 index
SPX,
+1.23%

has increased 15.2%. Shares have struggled since hitting record highs in early September, falling 16% in the past six months.

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