Lululemon reports stronger sales and profits, even as Omicron weighs on the business

Lululemon said it opened 22 net new stores during the quarter and ended the fiscal year at 574.


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Budrul Chukrut/Zuma Press

Lululemon LULU 3.67%

Athletica Inc. reported higher sales and earnings in the fourth quarter, becoming one of the few direct-to-consumer brands to post growth despite rampant supply chain challenges and the emergence of the Omicron variant.

The sports company on Tuesday reported net sales of $2.1 billion for the quarter ended January 30, up 23% from a year earlier. Net income rose to $434.5 million, or $3.36 per share, beating analyst expectations of $3.27 per share, according to FactSet.

Lululemon said it opened 22 net new stores during the quarter and ended the fiscal year at 574. Sales at stores open 12 months or more rose 32%.

Lululemon warned in January that quarterly sales and earnings would be on the low end of company targets, citing several challenges with the Omicron variant, including lower employee availability and reduced uptime at some locations.

Earlier this month, the company announced a move into footwear, launching the Blissfeel trainer in certain stores, with plans to expand to more styles by 2023.

Lululemon expects its revenue to grow between 20% and 22% this year compared to the $6.26 billion it generated last year. Earnings per share for the year are expected to be between $9.15 and $9.35. Both measures exceeded forecasts by analysts polled by FactSet.

Shares of Lululemon are up about 8% in after-hours trading as the company also said its board has approved a new share buyback program of up to $1 billion. Lululemon shares are down about 12% this year, compared to a nearly 7% drop in the Nasdaq Composite Index.

write to Charity L. Scott at Charity.Scott@wsj.com

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