Lululemon said Monday it's now expecting earnings and sales for the fourth quarter to come in at the high end of its prior outlook, thanks to strong performance during the holidays.
Ahead of virtual meetings this week with analysts and investors at the annual ICR Conference, the company provided the update to its previously announced mid-single-digit expectations. It also said net revenue for the quarter ending Jan. 31 is expected to grow at the upper end of its mid- to high-teens expectations.
Despite the new outlook, Lululemon shares were down 3.2% after the opening bell Monday. The stock has climbed more than 54% over the past 12 months.
Shares were likely falling because Wall Street expected the athletic apparel maker to boost its outlook, according to BMO Capital Markets analyst Simeon Siegel.
"Investors expected a beat, not a pause," Siegel said. But most retailers are "only in the beginning of recovery," he added.
Chief Executive Calvin McDonald said Monday the company is "pleased with the momentum over the holiday period as our investments in Lululemon and Mirror allowed us to connect with guests both physically and digitally."
In December, Lululemon reported fiscal third-quarter sales of $1.1 billion, representing growth of 22% year over year.
Lululemon has not offered an outlook for the full year due to the ongoing effects of the Covid pandemic.