Lululemon Athletica (NASDAQ:LULU), the athleisure retailer, jumped by more than 13% in US overnight trading after it posted a better-than-expected first-quarter update.
The group reported sales rose by 24% year-on-year to US$2bln.
A 60% increase in international revenues drove the improvement, led by a Chinese market revival as Covid restrictions were lifted.
Meghan Frank, chief financial officer at the retailer said: “A meaningful acceleration in our China sales trend, coupled with lower air freight, contributed to our better-than-planned financial performance.”
She added that second-quarter trading had been in line with the group’s guidance, which full-year revenue forecasts between US$9.44bln and US$9.51bln – around a 17% jump compared to 2022.
The group aims to reach revenues of US$12.5bln by 2026 through a new three-point plan to grow product innovation, market share and guest experience.
“The growth strategy includes a plan to double men's [clothing], double direct-to-consumer, and quadruple international net revenue relative to 2021 [US$6.25bln],” the trading update read.
Lululemon’s gross profit in the quarter reached US$1.2bln, increasing by 32% annually.
Gross margins also increased to 57.5% from 53.9% despite significant inflationary headwinds affecting costs for many companies.
The retailer added it opened seven new stores during the first quarter bringing its total count to 662.
Shares are expected to open at around the US$372 mark on Friday having closed at US$322 the night before.