Strong demand for its vibrant yoga-inspired workout apparel lifted Lululemon Athletica Inc.’s third-quarter profits by 47.7 percent Thursday, although the brand noted it has experienced some “softness” early in the fourth quarter.
Lululemon chief executive officer Christine Day wasn’t fazed, as the Vancouver-based apparel maker is in the process of stretching its reach to overseas markets, such as Hong Kong, Singapore, the U.K. and Europe.
Currently, the company, which operates 201 stores, plans on opening its first unit in Hong Kong, as well as a host of showrooms across Europe and Asia over the next 24 months.
“We have said previously that we have been spending the past several months doing a lot of behind-the-scenes work, and our international expansion is now entering a phase of more on-the-ground development,” Day said, adding that Lululemon already has e-commerce in the aforementioned markets.
Although the brand has experienced “significant” e-commerce growth — in the third quarter, sales were up 89 percent to $14.5 million — it also saw some price resistance on newer technical product. As a result, Day said it had to bring the prices to a “more accessible level,” especially considering it is the holiday season.
Typically, Lululemon’s activewear hovers between $50 and $200, with the majority of its most basic yoga pants retailing for just under $100.
While that may seem steep for workout gear, those premium prices haven’t deterred the brand’s loyal customer base.
The Vancouver-based company posted net income of $57.3 million, or 39 cents a diluted share for the period ended Oct. 28, compared with year-ago income of $38.8 million, or 27 cents a share. Net revenue for the quarter expanded 37.5 percent to $316.5 million from $230.2 million. Analysts anticipated earnings per share of 37 cents on sales of $305.3 million.
Same-store sales during the quarter rose 18 percent, as pricing adjustments brought gross margin to 55.4 percent of sales versus margin of 55.8 percent a year earlier.
Although Lululemon saw robust growth, it expects fourth-quarter earnings to total between 71 and 73 cents, lower than the 75-cent profit predicted by Wall Street.
For the year, the brand estimated EPS to be in the $1.81 to $1.83 range on sales of between $1.36 billion and $1.37 billion. That’s slightly down from its previous projections of annual earnings of $1.76 to $1.81 a share on revenue of $1.35 billion to $1.36 billion.
Analysts are looking for the brand to earn $1.82 cents a share on sales of $1.36 billion for the year.
@margotrobbie steps out onto the red carpet wearing @miumiu. The actress is nominated for “Outstanding Performance by a Female Actor in a Leading Role” in “I, Tonya” at the #SagAwards. (📷: Stewart Cook) #wwdfashion
For @massimogiorgetti of @msgm, the Nineties are his favorite decade. “They had a huge impact on my personal growth. What I like of the Nineties is that they are not so precise in terms of style as other decades…there was actually a bit of everything,” he said. As seen on MSGM’s Spring 2018 show: tie-dye and a bit of grunge, two styles that are synonymous with the decade #wwdfashion #wwddecades (📷: @kukukuba)
Breaking News: @hedislimane joins @celine as its new artistic, creative and image director. One of fashion’s preeminent image-makers and trendsetters, Slimane is to join the LVMH brand on Feb. 1 and unveil his first fashion proposition for men and women next September during Paris Fashion Week. It marks a major homecoming for Slimane, who cemented his reputation – and influenced men’s tailoring for more than a decade – as the designer of Dior Homme between 2000 and 2007. He went on to reinvent and ignite the house of Yves Saint Laurent, which he rechristened Saint Laurent, between 2012 and 2016 – all the while maintaining a close relationship with the Arnault family, which controls LVMH and Dior. Read the full exclusive story on WWD.com. Link in bio. #wwdnews #wwdfashion
“Personally I believe the Eighties have been the richest and more vivacious period for international fashion,” Giorgio Armani said when asked what his favorite decade of fashion is. It was a moment of disruption and experimentation and only thinking back to the first years of that decade is always an emotion for me, for what they have meant to me and my work.” The influence is clear in @giorgioarmani spring 2018 collection, pictured here, which was full of bright colors and unexpected prints. Read more about which decades designers loved most on WWD.com #wwdfashion #wwddecades (📷: @aitorrosasphoto)
For Lady Gaga’s only Italian show on her “Joanne World Tour,” the singer wore a range of @versace_official outfits. The standout piece: this custom-made bodysuit inspired by the brand’s spring 2018 collection. #wwdfashion (RG: @ladygaga)
@_camillaruth_ is expanding on the wellness-craze concept with @westbourne – a new NYC restaurant that’s both a healthy-minded café as well as a business that gives back to the community. Marcus works with the Robin Hood foundation to give back to The Door, a non-profit providing youth development services, and also hires employees through The Door. Read our full interview with Marcus on giving back through food on WWD.com. #wwdeye (📷: @lexieblacklock)