Lululemon stock gains on earnings beat, raised guidance
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Share of Lululemon Athletica (NASDAQ:LULU) gained sharply in Thursdayâs extended session after the company beat earnings expectations and elevated expectations for the full year.
The Vancouver-based athleisure leader reported $1.6B in net revenue, a 32% jump from the prior year, bolstered by a 32% increase in North American sales and a 29% jump in international sales. Meanwhile, the company reported diluted EPS of $1.48 as compared to $1.16 in the first quarter of 2021. Analysts had anticipated $1.43 and $1.55B for EPS and revenue respectively.
While operating margin fell 40 basis points, management was confident in pricing power and overall ability to overcome inflationary impacts.
"Our teams continue to deliver strong financial performance while navigating the ongoing impacts of COVID-19, supply chain disruptions and inflationary pressures,â CFO Meghan Frank said. âWhile we are not immune to these challenges, our omni operating model, balanced growth strategy, and unique approach toward innovation enable the positive results we are reporting today and anticipate for the full year."
Speaking to that confidence, management raised EPS and revenue forecasts for the rest of 2022.
For the full year, the company now expects net revenue to be in the range of $7.61B to $7.71B, up from a prior guide in the range of $7.49B to $7.62B. Diluted earnings per share expectations were also raised to a range of $9.35 to $9.50 from a prior estimate of $9.42 to $9.57.
Shares rose over 4% immediately following the print, building upon a similar gain in Thursdayâs regular trading session, before moderating slightly in after-hours trading. 
Bullish momentum had built heading into the quarter, with the stock surging nearly 10% in the week leading up the earnings print. That run-up has perhaps prompted the relatively mild reaction to the beat and raise.
Most prominently, Morgan Stanley analyst Kimberly Greenberger upgraded the stock to âOverweightâ, calling it a âcompelling opportunity to buyâ ahead of the quarter.
Read more on her long term expectations for the company.