Retailers Reap Rewards of Strategic Planning
The US shopping season has proven to be a sweet spot for retailers Lululemon Athletica and Abercrombie & Fitch, as they raise their current-quarter sales forecasts. Despite a highly promotional holiday season, customers have been driven to shop more on their mobile phones, leveraging artificial intelligence-enabled chatbots to compare prices, shipping times, and return policies.
Staying Ahead of the Competition
To keep shoppers engaged, both Lululemon and Abercrombie have introduced new colors and styles to their portfolios, effectively warding off competition from newer brands. According to Meghan Frank, Lululemon’s chief financial officer, customers responded positively to their product offerings during the holidays. This strategic move has paid off, with Lululemon’s shares surging over 4% to $413.75 in premarket trading.
Nordstrom Shines, Macy’s Struggles
Department store operator Nordstrom has also raised its annual forecast, thanks to robust sales during the holidays. Deep discounts on apparel and home decor items attracted deal-hunting customers to its outlets. In contrast, Macy’s struggled to generate demand at its namesake stores, highlighting the ongoing challenges faced by the department store operator. Macy’s expects fourth-quarter net sales to be slightly below the low-end of its previously issued range of $7.8 billion to $8.0 billion, causing its shares to dip about 2% in premarket trading.
Revised Forecasts
Lululemon now expects quarterly net revenue to fall between $3.560 billion and $3.580 billion, with profit per share ranging from $5.81 to $5.85. This revised forecast surpasses its prior targets of net revenue between $3.475 billion and $3.510 billion, and profit per share between $5.56 and $5.64. Abercrombie, on the other hand, expects fourth-quarter net sales to grow between 7% and 8%, exceeding its prior target of 5% to 7% growth.
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