Lululemon enjoyed a boost in its stock price in extended trading on Thursday after beating investor expectations, and the company founded as a women's athletic apparel brand is appealing to more than just the ladies according to its earnings call.
Following the release of its second quarter fiscal year results, Lululemon Athletica Inc.'s stock surged more than 13% on the news that the company surpassed Wall Street estimates on both earnings and revenue. The firm's earnings per share were $1.65 compared to Refinitiv analysts' expectations of $1.19, and revenue hit $1.45 billion while $1.34 billion was expected.
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During an earnings call following the release of the results, CEO Calvin McDonald told investors that the company's products are "ideal for enabling the work-from-home and versatile lifestyle that has grown exponentially in the COVID-19 world," and said both women and men are lining up to buy Lululemon's athletic and athleisure lines.
McDonald pointed to the company's expansion last month of its On the Move collection with pants "explicitly designed for out-of-studio use." He noted that the new women's style introduced, dubbed the City Sleek, surpassed expectations two-fold, becoming "the number one performing style in the company during the initial days of the launch, and we're chasing into additional inventory to help keep up with demand."
"When looking at the men's business overall, we saw a sequential improvement relative to quarter one, although it lagged behind the growth in the women's business," the CEO explained. "As the work-from-home and sweat-from-home environment continues, we have seen our male guests respond more enthusiastically to shorts, sweats and hoodies." He added, "Our merchant teams are chasing into these categories so we can maximize these businesses based on the current shift in demand."
Looking to the future, McDonald expressed excitement over expanding Lululemon's clothing size options for women to be more "inclusive," vowing that a majority of products will be available from sizes zero to 20 by the end of the year. McDonald also said there is a "long runway of growth" with planned new product offerings.
He said on the call, "There is a lot of new innovation in the pipeline."