When companies raise guidance, or at least when they lift the lower-end of their prior targets, investors usually cheer. But in the case of Lululemon Athletica Inc. (NASDAQ: LULU) there is of course a high-valuation bar that has to be considered. Lululemon narrowed its guidance to the upper-end of prior ranges, but the shares hardly budged on Monday despite having a full trading day to absorb the news.

Lululemon Athletica has issued guidance on Monday morning ahead of a presentation at the ICR Conference in Orlando, Florida this week. The guidance offered was for revenue and earnings for the company’s fourth quarter of fiscal 2016 ending January 29, 2017.

The company said that it now anticipates that net revenue will be in the range of $775 million to $785 million. That forecast is based upon the company’s total comparable sales increase being in the mid-single digits on a constant dollar basis, and it also compares to prior guidance of $765 million to $785 million also being in the mid-single digits for total comparable sales on a constant dollar basis. Thomson Reuters was calling for revenues of $781.5 million, which is a gain of 11% versus a year ago.

Lululemon forecast that its earnings will now be in the range of $0.99 to $1.01 per share (EPS) for the fourth quarter. Its prior forecast was in the range of $0.96 to $1.01 EPS, based upon a 31.2% tax rate. Thomson Reuters was last seen projecting $1.00 in EPS for the fourth quarter.

We are at a time when many companies should be cheered for raising any part of their guidance. That being said, Lululemon is valued at 31.7 times expected 2017 earnings (January year-end) and valued at 26.5 times expected earnings for the coming year. Those are cheap valuations compared to the days when Lululemon was valued at over 40 and 50 times earnings, but many outsiders believe that Lululemon’s fastest growth days are behind it.

To prove a point about future valuations, Thomson Reuters shows that Lululemon growth would be 13.4% to $2.34 billion in sales for the current year (again, with a January end) — and rising 12% over the next year and 10.6% in the following year to end up at almost $2.9 billion in annual sales.

Another obvious concern is that Nike, Under Armour, Adidas, Reebok and a slew of dozens of upstarts would all like their part of Lululemon’s business. Even Gap has been going after Lululemon with its Athleta brand, via mail-order catalogues, and it has now reached 130 brick and mortar stores.

Maybe we should just focus on what the company itself had to say. Laurent Potdevin, CEO of Lululemon, said of the quarter:

We had a strong holiday season in both our store and digital channels driven by our assortment, operational execution and guest experience. Our entire team is excited about the momentum in the business and I am grateful to our global collective for their great work and enthusiasm. We look forward to 2017 as we continue to advance on our long term goals.

Sometimes investors should see how statements of one day differ from (or add up with) what was said just a month or two before. Here is how Monday’s statement compared to a statement just a month earlier when its earnings report included guidance. Potdevin said on that date:

Our third quarter results demonstrated strong execution across all areas of our business as we delivered continued topline momentum, outperformed in gross margin and inflected meaningfully in EPS. This success is a result of our team’s ongoing effort and commitment to delivering on our long term strategies.

As we entered the fourth quarter, we experienced mixed sales results that have since improved. I am inspired by the team’s response and passion towards making this another successful holiday season, and I am confident that we will continue to deliver an unparalleled guest experience across all our channels and regions around the globe.

Guidance for the full year was listed as follows with its earnings a month ago:

• Revenue to be in the range of $2.320 billion to $2.340 billion based on total comparable sales in the mid-single digits on a constant dollar basis;
• and earnings per share are expected to be in the range of $2.18 to $2.23 (or $2.11 to $2.16 normalized for the tax and related interest adjustments) based upon 137.3 million diluted shares outstanding and a 28.2% tax rate (30.9% excluding tax and related interest adjustments).

Lululemon closed down 0.12%, or just -$0.08, at $68.19. It has a 52-week range of $52.71 to $81.81 and a consensus analyst price target of $73.23.

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