Shares of Lululemon Athletica Inc. (LULU) were rising Monday after the trendy athletic apparel company lifted its guidance for the fourth quarter of 2018.
The stock closed up 5.73% to $139.73 a share in trading on Monday.
Revenue for the quarter will come in at between $1.14 billion and $1.15 billion, the company said in a press release. Previously, Lululemon had guided for a range between $1.115 billion and $1.125 billion. Lululemon expects diluted earnings per share to be between $1.72 to $1.74, higher the the initially anticipated $1.64 to $1.67.
"The momentum in our business remained strong throughout the holiday season, reflecting the ongoing success of our product offerings and our connection with guests around the globe," said CEO Calvin McDonald.
The announcement impressed Stifel analysts, who raised their price target on the company to $152 from $151, which represents 7% upside. Stifel isn't just pricing in the added earnings Lululemon now expects for the quarter, the firm is now even more positive on the future.
"Guidance for a stronger than anticipated 4Q highlight the continued brand resonance and execution," the analysts said. They added, "We are impressed by the magnitude of the upside indicated by today's preannouncement."
Under Armour Inc. (UAA) , a competitor to Lululemon, rose 0.2%, while Nike Inc. (NKE) rose 0.1%. Under Armour received an upgrade from analysts at CFRA Friday, who said they saw that traffic to the Under Armour website during the holiday season was far better than initially expected. Roughly 32% of Under Armour's revenue comes from e-commerce, compared to about 25% for Lululemon.
Lululemon shares are up 57% in the past year.