(Bloomberg) -- Lululemon Athletica Inc. expects fourth-quarter sales to surpass the market’s expectations, showing the upscale activewear brand is fending off upstart competitors and slower growth in consumer spending.
Revenue will rise between 11% to 12% and be in the range of $3.56 billion to $3.58 billion in the period, up from previous guidance for revenue of as much as $3.51 billion. That surpassed the average estimate of analysts compiled by Bloomberg.
Shoppers “responded well to our product offering” during the holiday season, said Chief Financial Officer Meghan Frank in a statement.
The shares rose as much as 2.3% in New York trading Monday before paring much of the gain. Lululemon will be meeting with analysts and investors at this week’s ICR Conference.
The company also raised its earnings per share guidance to a range of $5.81 to $5.85, up from as much as $5.64.
Chief Executive Officer Calvin McDonald is betting the company can reignite demand by expanding its styles and embracing fashion trends that are moving away from the form-fitting clothing that Lululemon is known for.
Lululemon’s strategic plan sees the company reaching $12.5 billion in annual revenue by 2026. It intends to reach that target in part by growing internationally, expanding online sales and selling more products to men.
The company’s success has also attracted a number of rivals, which now offer products like its signature yoga pants at lower prices.
(Updates share trading)
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