Lululemon Shares Rally 10% After Company Earnings, Ivivva Restructuring Plans

Shares of Lululemon Athletica Inc. rose more than 10% late Thursday after the apparel maker reported first-quarter earnings above expectations and announced a shake-up of its Ivivva brand, which caters to girls. Lululemon said it plans to close about 40 of its 55 Ivivva stores and fold about half of the brand's remaining stores to the Lululemon brand. Lululemon said it earned $31.2 million, or 23 cents a share, in the quarter, compared with $45.3 million, or 33 cents a share, in the year-ago period. Adjusted for one-time items, including restructuring charges related to Ivivva, the company said it earned 33 cents, compared with 30 cents a year ago. Sales reached $520.3 million, compared with $495.5 million a year ago. Analysts polled by FactSet had expected adjusted earnings of 28 cents a share on sales of $514 million. Lululemon said it plans to operate Ivivva primarily online, closing all of the brand's showrooms and other temporary locations, and that it will "streamline" its corporate infrastructure. Lululemon said it expects the Ivivva restructuring to cost between $50 million and $60 million in fiscal 2017, pre tax and including $17.7 million recognized in the first quarter, mostly to cover lease termination charges and asset impairments. The retailer said it expected full-year 2017 net revenue in the range of $2.53 billion and $2.58 billion and per-share earnings $1.97 to $2.07 for the full year. Shares had ended the regular session up 0.8%.