Lululemon shares hit new high
Shares in Vancouver-based Lululemon Athletica hit an all-time high Tuesday after the yoga wear retailer raised its profit forecast.
Its stock closed up $6.26, or 11 per cent, at $60.95 on the Toronto Stock Exchange, after rising to as high as $63.37 earlier in the day.
Its shares have soared by roughly 80 per cent in the past year.
Lululemon, which reports in U.S. dollars, projected earnings of between $47.5 and $49.6 million US, or 47 to 49 cents a share, in its fourth quarter.
Its previous forecast was for 40 to 42 cents. It predicted revenue of between $358 and 363 million US for the quarter ending Jan. 29, about $30 million higher.
The shares rose after Lululemon reported strong holiday sales in the U.S. and globally and despite lower-than-expected revenue.
In early December, it reported a 51 per cent increase in third quarter profit from a year earlier to $38.8 million, or 27 cents per share. Revenue rose 31 per cent to $230.2 million.
Revenue was not as high that quarter as they could have been because the retailer sold out of some items, leaving unmet demand.
The company operates on a scarcity model that leaves its customers hungry for its fashionable and form-fitting athletic wear and accessories that often disappear from shelves.
Lululemon has said several times that it plans to fix its inventory troubles as it struggles to keep up with demand. But that short supply also means it can avoid end-of-season markdowns.
CEO Christine Day said Tuesday the company's efforts to adjust have paid off.
"Our work throughout the year building our inventory position is driving our success in the fourth quarter," Day said in a statement.
Lululemon opened its first store in 1998 in Vancouver and has expanded to 151 stores in the past decade.
Last week, its influential founder Chip Wilson announced plans to resign as chief innovation and branding officer effective Jan. 29, which marks the end of the current quarter and financial year.
Wilson will stay on as chairman of the company's board of directors.
Wilson, 55, said he feels comfortable leaving the company in Day's hands. She was recently named Report on Business magazine's CEO of the year.
With files from The Canadian Press