Shares of Lululemon Athletica (LULU 1.74%) popped 6.7% on Friday after the athleisure clothing leader reported impressive sales and profit growth.
Revenue surged 29% year over year to $1.9 billion in its fiscal 2022 second quarter, which ended on July 31. The gains were fueled by new store openings and a sharp rise in same-store sales.
The retailer opened 22 company-operated stores during the quarter and a net total of 66 over the past year. That brought its total store count to 600 locations at the end of the second quarter.
Lululemon's physical stores and e-commerce sites performed remarkably well, even as many other retailers saw their sales dented by the impact of inflation on consumer spending. "Traffic across channels remains robust with store traffic up over 30% and e-commerce traffic increasing over 40%," CEO Calvin McDonald said during a conference call with analysts. "And importantly, we are not creating this traffic through markdowns or price promotions."
All told, Lululemon's comparable-store sales jumped 23%. This increased sales leverage helped to drive a 31% rise in adjusted operating income, to $391 million. And Lululemon's adjusted earnings per share, which were boosted by stock buybacks, increased 33% to $2.20.
These strong results and encouraging ongoing sales trends prompted Lululemon to lift its full-year financial forecast. Management now expects net revenue of $7.865 billion to $7.94 billion and adjusted earnings per share of $9.75 to $9.90. That's up from its prior guidance for sales of $7.61 billion to $7.71 billion and adjusted per-share profits of $9.35 to $9.50.
Looking further ahead, Lululemon reiterated its goal of $12.5 billion in revenue by 2026. That would represent a doubling of its sales in 2021.