Lululemon Beats in 1Q as Demand in Older Stores Surge

By Jennifer Booton Markets FOXBusiness

Lululemon Athletica (NASDAQ: LULU) revealed Friday a much stronger-than-expected 70% jump in first-quarter profit, helped by a sharp sales rise in its more established stores.

Continue Reading Below

The yoga- and leisure-wear retailer posted net income of $33.4 million, or 46 cents a share, compared with $19.6 million, or 27 cents a share, in the same quarter last year.

Revenue for the three months ended May 1 was $186.8 million, up 35% from $138.3 million a year ago, driven by a 16% increase in comparable store sales.

The results were better than average analyst estimates polled by Thomson Reuters of 38 for earnings on $181.2 million in sales. Fueling the gains was a 51% improvement in direct to consumer revenue to $13.8 million.

“We’ve had a great start to the year and a very successful first quarter considering our lean inventory levels,” Lululemon CEO Christine Day said in a statement. “We were able to generate strong sales and earnings growth while also focusing on a successful transition of our e-commerce platform in-house.”

The company said it remains cautious about the macro-economic environment but remains confident Lululemon’s positive momentum will continue through 2011.

Continue Reading Below

For the current quarter, the retailer sees earnings in the range of 42 cents to 44 cents a share on sales between $200 million and $205 million. Analysts polled by Thomson Reuters are expecting a profit of just 40 cents on sales of $197.5 million.

Lululemon is anticipating a fiscal 2011 profit in the range of $2.10 to $2.16 a share, on sales of $915 million to $930 million. Analysts are looking for earnings of $2.04 on sales of $917 million.

What do you think?

Click the button below to comment on this article.