TORONTO - Lululemon Athletica Inc. (Nasdaq:LULU) is boosting its fourth-quarter outlook, crediting strong sales over the vital holiday shopping season.
The Vancouver-based international retailer now estimates revenue in its fourth quarter will be between $595 million and $600 million — about $15 million higher than previously estimated.
"We really had a tremendous holiday season," chief financial officer John Currie said during a conference in Florida on Monday.
"We came in with some headwinds in terms of store openings and currency and port disruptions, but we mitigated those to some extent, and strong product assortment and continuation of strong traffic trends that we started seeing in Q3 really allowed us to deliver better than our expectations for Q4."
The retailer of high-end workout clothing had reduced its fourth-quarter sales outlook by US$10 million in early December as port delays on the West Coast slowed shipments of about a million pieces of merchandise.
Lululemon was able to mitigate some of the delays by having shipments routed from Asia to Vancouver, then transported to the U.S. by rail.
Lululemon estimates earnings of between 71 and 73 cents US per share — two to four cents per share above the top of its previous range of between 65 and 69 cents.
A number of analysts have suggested that the recent collapse in crude oil prices will allow consumers to spend less on gasoline and more on other types of goods, such as clothing.
Meanwhile, Currie said the lower loonie will slightly benefit the company's performance.
"In the past, when most of our revenue was in Canada, a drop in the Canadian dollar was quite catastrophic," Currie said. "That's not the case anymore. "
Lululemon also said Monday that its customers have responded well to its assortment of products, brought in under a new senior management team.
After moving on from a series of controversies, including a large recall of its luon pants after they turned out to be too sheer, the company says it is looking to shift from a defensive position to an offensive one in 2015.
That includes investing more in product development, Currie said.
"The question is, as we shift to playing offence, what are the right investments to drive the longer-term growth of the business without taking on too much beyond what we can execute well?"
Lululemon shares established a new 52-week high of US$62.85 on Monday but gave up some early gains and closed up $3.96 or 6.75 per cent at $62.59 on the Nasdaq.