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.
My character, Dinah Madani, is just the coolest, [most] badass woman imaginable," says @amberroserevah. The actress stars in @marvel's newest series on @netflix, @thepunisher. To prepare for her role, Revah sat down with Homeland agents to get a real sense of with Dinah's day-to-day life is really like. Read our full interview on WWD.com. #wwdeye (📷: @jilliansollazzo)
A scene from the 91st annual @macys Thanksgiving Day Parade. The parade, which boasts 50 million TV viewers and 3.5 million on-site spectators, is considered one of the largest and most watched parades in the world. (📷: Jason Szenes/EPA-REX)
The circus came to @bloomingdales 59th Street on Tuesday night and lit up Lexington Avenue with acrobatic dancers, death-defying knife throwing, sword swallowing and aerial acts with no net. The 45 minutes of theatrics built up to unveiling the holiday windows depicting @swarovski crystal-encrusted circus pieces and scenes from “The Greatest Showman” – songs from the soundtrack included. See the rest of the photos on WWD.com #wwdfashion (📷: Joshua Scott)
The psychedelic fashion that pervaded the ’60s is back with an exhibit at the @museumofcityny. “Mode New York: Fashion Takes a Trip” chronicles the changing styles from 1960 through 1973 and features designers such as @ysl, @oscardelarenta and more. The exhibition, which is on display through April 1, is organized into four periods: First Lady Fasion, Youthquake, New Bohemia and New Nonchalance. Pictured here is model Pat Bardonella during the Garvey Day Parade in 1968. (📷: @kwamebphoto) #wwdeye #wwdfashion
“People should be a lot more honest in expressing both the dark and light of themselves. We need to give each other the space to do that because it’s the only way we can grow and evolve,” says @noelwells of her new film “Mr. Roosevelt,” which is largely based on her own struggles. Unexpectedly leaving @nbcsnl in 2014 after just one season, Wells felt set back in her self-esteem and career trajectory. She quickly refocused her energy to more personal projects, which led to the completion of “Mr. Roosevelt.” Read the rest of WWD’s interview with the “Master of None” actress on WWD.com #wwdeye (📷: @jilliansollazzo)
@barbrastreisand is giving fans a chance to see her perform up close in a new concert series, which makes its debut on @Netflix today. From behind-the-scenes takes to her concert performance in Miami last December, the two-hour streaming special captures Streisand in her element. Pictured here is the singer/actress photographed for WWD in 1963. (📷: Palmieri Tony) #wwdeye #wwdarchive
@chanel and @pharrell dropped what’s being dubbed as the world’s most exclusive sneakers yesterday. The Adidas Originals NMD Hu, which Williams designed in collaboration with Chanel and @adidasoriginals, has a waiting list of over 120K people who pre-registered online at chanelatcolette.fr –– and only 500 pairs are on sale. The singer predicted the resale value of the shoes could reach $40K. Read the full interview on WWD.com. Link in bio. #wwdfashion (📷: Dominique Maître)
@imanshumpert is diving deeper into his creative endeavors and relaunching his clothing line, Post 90s, and is helping to raise money for the hurricane victims in St. Maarten with a jersey he’s designed with his brother. The Cleveland Cavaliers player talked to WWD about kneeling during the national anthem, working with fashion brands and how he wants to be more than an @nba player. Read the interview on WWD.com #wwdfashion (📷: George Chinese)