Lululemon earnings beat boosts athleisure peers
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A strong earnings result and the indication of continued consumer spending on apparel from Lululemon (NASDAQ:LULU) helped lift many stocks in the footwear and apparel sector on Wednesday.

In addition to strong sales and profits for the fourth quarter, the Canadian apparel company indicated that inventories are beginning to normalize. Along with the strong sales, that commentary appeared to spark gains for many peers as promotions hampering the industry could be winding down.

âIn terms of markdown and full price penetration, we did see that normalize as we move through the balance of January and then into Q1,â CFO Meghan Frank told analysts. âWe haven't seen any material differences by customer segment, and we do expect that we'll maintain that relationship of healthy full price in line with history, that's reflected in the color we provided on markdown staying flat year-over-year, also flat to 2019, which we view as a healthy water line for us.â

Further, the company indicated that revenue is rising sharply in China as pandemic restrictions roll off, as are supply chain headwinds emanating from the Asia Pacific region. Coupled with lower air freight costs, margins and sales are expected to rebound sharply.

The commentary held broader implications for the apparel and footwear industry. Nike (NKE) +1.61%, Adidas (OTCQX:ADDYY) +3.49%, Puma SE (OTCPK:PUMSY) +3.18%, On Holding (ONON) +2.63%, Under Armour (UAA) +2.4%, and VF Corporation (VFC) +2.22% were among notable gainers in afternoon trading. 
Read lululemonâs earnings call transcript.