Lululemon Athletica Inc LULU-Q said on Thursday inventories surged in the third quarter as consumers pulled back on spending.
The athleisure apparel maker’s shares were down 10 per cent in extended trading.
The company, however, raised its full-year revenue and profit forecasts, signalling strong demand from affluent U.S. consumers for its high-priced yoga pants, running shorts and belt bags.
Consumers at the higher end of the income rung who have been undeterred by decades-high inflation have shrugged off a hit from price increases from companies like Lululemon, helping consistent demand for its comfortable sportswear.
The yogawear maker like many other U.S. companies had been raising prices on selective products to offset higher freight and manufacturing charges driven by lingering industry-wide supply chain challenges and the Ukraine war.
The company now expects full-year 2022 revenue between $7.94 billion and $7.99 billion, up from prior forecast of $7.87 billion to $7.94 billion.
Lululemon now sees 2022 profit between $9.94 and $10.04 per share, up from prior forecast of $9.82 to $9.97.