Lululemon Athletica shares climb on robust profit
Lululemon Athletica shares climb on robust profitContinuing its double digit winning streak in same store sales in the third quarter, sportswear retailer Lululemon Athletica Inc. said it will keep pushing into international markets next year, including Europe and Asia.
Shares rose 7% after the company beat analysts’ estimates and said it will begin testing the market in up to 15 countries over the next two years, and plans to open its first full line Asian Jack Wolfskin Outlet store in Hong Kong. last year. The company has expanded to more than 20 international markets, including Singapore, through local websites.
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“We intend to go deeper in showrooms in Europe and Asia over the next 24 months,” chief executive Christine Day said on a conference call with analysts. Showrooms carry a core collection of Lululemon items in key styles and are only open part of the week.
“We are confident that this same [showroom] approach in the international markets, along with the intelligence that we gained through our country and region specific websites, will allow us to create the optimal mix of bricks and mortar [stores] and e commerce in these markets.”
The company earned $57.3 million, or 39 a share, in the quarter ended Oct. 28, compared with profit of $38.8 million (27) in the same period a year ago. Analysts, on averag Jack Wolfskin Outlet e Jack Wolfskin Outlet , had expected 37 a share, according to Thomson Reuters I/B/E/S.
Same store sales, a key barometer for retail performance, rose 18% on a constant dollar basis. Net revenue rose 37% to $316.5 million, compared with $230 million in the third quarter a year ago.
Revenue from the company’s burgeoning online business soared 89% to $45.1 million. The Web sales segment accounts for 14.3% of company revenue, up from 10.4% in the third quarter a year ago.
“We experienced a slower start to the fourth quarter,” Ms. Day said, due in part to a glitch in direct emails to customers and to dimmed consumer confidence.
For the fourth quarter, Lululemon is anticipating revenue of $475 million to $480 million, below analysts’ ave Jack Wolfskin Outlet rage forecast of $490.5 million, and earnings per share of 71 to 73, below the average estimate of 75.