Lululemon doubles profits but misses revenue forecast
Clothing retailer Lululemon Athletica Inc. doubled its profits in the second quarter as sales were up nearly 50 per cent for its trendy yoga wear.
Vancouver-based Lululemon said Thursday it earned $11.1 million, or 16 cents a share, in the three-month period ended Aug. 3. That was up from $5.1 million, or seven cents a share, in the same span a year prior. The company reports its results in U.S. dollars.
Analysts surveyed by Thomson First Call had expected profits of 13 cents a share.
The earnings figure included a one-time charge for closing four stores in Japan. Without that, net income from continuing operations was higher, at $12.3 million, or 18 cents a share, an increase of 124 per cent from the year earlier.
"We are pleased with our financial performance, particularly in light of the current retail environment," CEO Christine Day said in a statement. The company said it is planning to open 35 new stores in North America by the end of its fiscal year and will begin to sell its sportswear online.
Revenues were up 48 per cent to $85.5 million, missing analysts' estimates of $88.2 million. For the key figure of same-store sales, Lululemon posted growth of 13 per cent, or 18 per cent once global currency fluctuations are factored in.
Lululemon's stock finished up $2.59 at $20.59 US Thursday in trading on the Nasdaq after earlier dipping near its 52-week low of $16.59.
Since the company went public in July 2007 at $18 US a share, its shares have soared to a giddy $60.70 before pulling back sharply. Last November, a New York Times-commissioned study showed that a Lululemon line of shirts, which the company claimed released vitamins and minerals into the skin, contained no more nutrients than plain cotton T-shirts.
On Tuesday, analysts at RBC cut their price target on the company's shares from $47 to $30 US.