Lululemon’s international sales saved its first quarter

Lululemon Athletica (NASDAQ:LULU) stock shot around 10% higher in ‘after hours’ trading, up $30.23 to $338.50, after its first-quarter revenue beat Wall Street forecasts.

Stronger international sales offset a slowdown in consumer spending in North America, the Canadian yoga pants maker revealed.

The company, which is a leading brand in the so-called ‘athleisure’ trend, also announced it will conduct a $1 billion increase to its stock repurchase program.

International demand, particularly from China, bolstered Lululemon’s sales whilst flat sales in the Americas and contributed to a 6% increase in year-over-year comparable sales.

Whilst the numbers were better than Wall Street expected nonetheless they represent a slowdown in Lululemon’s run-rate – which was marked ‘double-digit’ percentage in the two prior years.

Lululemon reported $2.21 billion in quarterly net revenue, comfortably above the $2.19 billion predicted by analysts.  It achieved improved margins, by 20% to 57.7%, thanks to tighter and leaner inventories.

Gross profit was up 11% for the quarter at $1.3 billion, whilst income from operations rose by 8% to $432.6 million. At the end of the quarter, Lululemon had $1.9 billion of cash and equivalents.

The company upgraded its guidance for the full year, forecasting annual revenue between $10.7 billion to $10.8 billion. It anticipates it will report earnings per share of $14.27 to $14.47 – versus its previous forecast of $14.00 to $14.20.

“Looking ahead, we continue to have a significant runway for growth and are confident in our team’s ability to powerfully deliver for our guests in 2024 and beyond,” chief executive Calvin McDonald said.