Lululemon Athletica Q2 Results Top View, Boosts FY Outlook

(RTTNews) - Canadian yoga-wear maker Lululemon Athletica Inc. (LULU) Thursday said its second-quarter profit dropped marginally from the previous year, despite a sharp rise in revenues. Both earnings and revenues topped Wall Street estimates, and the company lifted its full-year forecast.

The company reported net income of $47.7 million or $0.34 per share, compared to $48.75 million or $0.33 per share in the prior-year quarter.

On average, 35 analysts polled by Thomson Reuters expected the company to report earnings per share of $0.33 for the quarter. Analysts' estimates typically exclude special items.

Net revenue increased 16 percent to $453 million from $390.7 million in the second quarter of fiscal 2014. Analysts expected revenues of $445.76 million for the quarter.

Comparable store sales increased 6 percent on a constant dollar basis. Total comparable sales, which includes comparable store sales and direct to consumer, increased 11 percent on a constant dollar basis.

Direct to consumer net revenue increased 30 percent to $82.2 million, or 18.2 percent of total company revenue. This increased from 16.2 percent of total company revenues in the second quarter of fiscal 2014.

Laurent Potdevin, Lululemon's CEO, said: "We exceeded our revenue targets for the past quarter, supported by strong performance from both our store and e-commerce channels. Looking to the remainder of the year, our team is laser focused on meeting our strategic key goals: grow our global collective, relentlessly innovate our product lines and continue to create transformational experiences for our guests."

For the third quarter, earnings per share are expected in the range of $0.35 to $0.37. The company expects net revenue to be in the range of $477 million to $482 million based on total comparable sales in the high single digits on a constant dollar basis. Analysts expect the company to report earnings per share of $0.43 on revenue of $478.40 million.

For fiscal 2015, earnings per share are expected to be in the range of $1.87 to $1.92. The company now expects net revenue to be in the range of $2.025 billion to $2.055 billion based on total comparable sales in the high single digits on a constant dollar basis.

In June, the company expected 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.

Wall Street expects the company to report earnings per share of $1.93 on revenue of $2.03 billion.

LULU closed down 1.8 percent on Wednesday at $64.05.