by Marina Strauss
The Globe and Mail
Even as rival retailers scaled back on plans to expand merchandise lines in the deepening downturn, Christine Day decided to move in the opposite direction.
About a year ago, as the financial crisis exploded, she gave the nod to her staff at high-end yoga wear retailer Lululemon Athletica Inc. to bolster its running apparel offerings and take on Nike Inc., including its top selling women’s running shorts.
The chief executive officer of Lululemon also went ahead with plans to expand its seasonal outerwear, adding fall jackets to the racks. She invested in new systems to track inventory better and ensure that the stores didn’t run out of the popular items.
Her bet on new merchandise – and better inventory tracking – has paid off. Late yesterday, Lululemon said it was raising its third-quarter profit target because of stronger-than-anticipated sales. It now projects that its earnings will range from 17 cents a share to 19 cents a share, from previous guidance of 11 cents to 13 cents.
The bullish forecast bodes well for retailers as they approach their crucial holiday season after a year when upscale merchants were hit hard by the tight economy, observers said.
“It’s a very good sign,” said Milton Pedraza, chief executive officer of the Luxury Institute in New York. “But we’re all pretty cautious. There’s not that much strength out there.”
Ms. Day added in an interview: “It gives us a little more confidence and optimism” for the holiday shopping period.
Read the full article: http://www.theglobeandmail.com/report-on-business/lululemon-sales-on-a-run/article1339607/