Due to increased demand for its fresh products, Lululemon raises its annual forecasts

As affluent clients purchase the company's new belt bags, golf, and tennis equipment, Lululemon Athletica Inc. raised its annual profit and revenue forecasts on Thursday, propelling its stock price 10% higher in extended trading.

Due to the money they saved during the lockdowns, consumers with higher earnings have mostly shrugged off the impacts of inflation in order to purchase non-essential products like clothing and handbags.

On the earnings call, Lululemon's CEO Calvin McDonald indicated that there has been no major shift in client purchasing habits.

In order to sustain its athleisure-driven sales growth and outperform competitors Athleta and Sweaty Betty, the company has introduced new styles, expanded into footwear categories, and introduced a men's line.

Analysts have also observed that discounts at Lululemon, which has a relatively new inventory, have climbed only marginally over the past few weeks, although its competitors have dropped prices dramatically to boost overall sales and get rid of out-of-style items.

McDonald remarked, "Lululemon remains predominantly a full-price business, and we do not intend to change our promotional cadence or markdown strategy."

In the coming weeks, Lululemon aims to release a variety of products, including footwear and bags, as Chinese manufacturers increase output in response to this year's easing of COVID-19 limitations.

Earnings and sales projections for 2022 have been increased beyond market estimates.

It increased its adjusted per-share earnings forecast from $9.35 to $9.50 to between $9.75 and $9.90, as well as its net sales projection from $7.61 billion to $7.71 billion to between $7.87 billion and $7.94 billion.

The second quarter net revenue climbed by 29% to $1.87 billion, above expectations of $1.77 billion.

The company's adjusted earnings per share of $2.20 beat forecasts of $1.87, according to Refinitiv data.