Lululemon Athletica Q1 Tops View, Lifts Full Year Outlook

(RTTNews) - Canadian yoga-wear maker Lululemon Athletica, Inc. (LULU) Tuesday said its first-quarter profit increased from the previous year, helped by higher revenues and a favorable tax rate. Adjusted earnings and revenues topped Wall Street estimates, and the company lifted its forecast for the year.

Net income surged to $47.81 million or $0.34 per share from $18.98 million or $0.13 per share in the previous year.

Excluding a tax expense on repatriation of foreign earnings, earnings per share were $0.34, same as last year. On average, 36 analysts polled by Thomson Reuters expected the company to report profit per share of $0.33 for the quarter. Analysts' estimates typically exclude special items.

Net revenue for the latest first quarter climbed 10 percent to $423.54 million from $384.62 million in the comparable quarter last year. Analysts estimated revenue of $418.94 million for the period.

Direct to consumer net revenue increased 27 percent to $83.6 million.

Including comparable-store sales and direct to consumer, total comparable sales rose by 6 percent on a constant dollar basis. Quarterly comparable-store sales decreased by 1 percent in constant currency, while direct to consumer revenue increased 31 percent.

Laurent Potdevin, CEO, said, "Our team's solid performance resulted in another improving quarter - coming in ahead of our revenue expectations. We drove positive trends in traffic, conversion, and brand engagement, along with a continued acceleration of our e-commerce business."

The effective tax rate was 30.3 percent, compared to 73.4 percent in the first quarter of fiscal 2014 that included a tax expense of $30.9 million related to the repatriation of foreign earnings to fund the share buyback program.

The tax rate for the first quarter of fiscal 2014 excluding the $30.9 million tax expense on the repatriation of foreign earnings would have been 30.1 percent.

Looking ahead to the second quarter, the firm expects earnings to be in the range of $0.31 to $0.33 per share and net revenue of $440 million to $445 million, based on a total comparable sales in the high single digits on a constant dollar basis.

Analysts currently expect second-quarter earnings of $0.34 per share and revenue of $439.78 million.

For fiscal 2015, the company now expects earnings per share to be in the range of $1.86 to $1.91 and revenue in the range of $2.00 billion to $2.05 billion, based on a total comparable sales increase in the mid single digits on a constant dollar basis. Analysts now project annual earnings per share of $1.93, on $2.02 billion in revenues.

In March, the company projected earnings per share to be in the range of $1.85 to $1.90 and revenue in the range of $1.97 billion to $2.02 billion based on a total comparable sales increase in the mid single digits on a constant dollar basis.

LULU closed down 3.6 percent on Monday at $61.52, and rose 2.8 percent in pre-market activity.