Lululemon (LULU) stock popped almost 10% in premarket trading after the Canada-based apparel retailer posted an earnings beat and upbeat full-year profit forecast.
“As we enter the holiday season, we are encouraged by our early performance,” Lululemon CEO Calvin McDonald said, noting that the company continues to make progress in its turnaround plan and expects to see more results in 2026.
McDonald plans to step down from his role and from the company’s board on Jan. 31, Lululemon also announced on Thursday. He will continue as a senior adviser through March 31, with CFO Meghan Frank and its CCO André Maestrini to serve as interim co-CEOs.
In the company’s third quarter, diluted profits rose to $2.59 per share, exceeding expectations for adjusted earnings of $2.22 per share, according to S&P Global Market Intelligence.
Revenue increased 7% year over year to $2.6 billion, topping estimates of $2.47 billion. Higher revenue was driven by international sales, which climbed 18% on a comparable basis. Same-store sales in the Americas declined 5%.
For the fourth quarter, Lululemon guided for net revenue in the range of $3.5 billion to $3.58 billion, in line with the Wall Street consensus estimate of $3.56 billion.
For the full year, the company forecast net revenue to be between $10.96 billion and $11 billion, representing 4% growth. The Street is expecting full-year revenue of $10.96 billion.
Lululemon’s anticipated full-year earnings also came in ahead of expectations, with diluted earnings per share expected in a range of $12.92 to $13.02 for the year. The Street guided for adjusted earnings of $12.86 per share.