Lululemon Athletica Inc. more than doubled first-quarter profits on rising sales, but the company lowered its profit outlook because of higher spending on growth initiatives.

For the three months ended May 4, the Vancouver-based yoga company’s net income climbed 139 percent to $8.5 million, or 12 cents a diluted share, from $3.5 million, or 5 cents.

Sales for the quarter jumped 75 percent to $78.2 million from $44.8 million, driven by 27 new stores and same-store sales rose 28 percent, or 15 percent minus the currency change between the U.S. and Canadian dollars.

“These results are not easy to achieve in this economic environment, but I believe the tide will continue to rise in our market base,” said chief executive officer Robert Meers, who is stepping down at the end of the month.

However, based on increased costs from new hires and strategic initiatives, the 85-unit company lowered its fiscal 2008 earnings guidance by 1 or 2 cents on revenues it now expects to be $10 million higher. The company said it anticipates diluted earnings per share for fiscal 2008 to be in the 68 to 71 cent range, compared with previous guidance of 70 to 72 cents. At the same time, it raised revenue guidance to $380 million to $385 million compared with a previous forecast of $370 million to $375 million.

Guidance continues to be based on 35 planned new store openings in North America annually and anticipated comparable-store sales growth in the low teens, or high-single digits on a constant dollar basis.

In after-hours trading, shares fell more than 11 percent to $28.60.

In a separate development, Lululemon hired Sheree Waterson, most recently president of Speedo North America, as executive vice president of general merchandise management and sourcing.

On an earnings call after the market closed Monday, Christine Day, president, chief operating officer and ceo-designate, said Lululemon has two more posts to fill: a head of logistics and Day’s current post of executive vice president of retail operations.

Waterson’s background includes e-commerce, which Lululemon is adding next year. She left Warnaco Inc.’s Speedo last June. Before joining Speedo in 2005, Waterson was vice president of women’s apparel for Levi Strauss & Co., and previously held executive posts at Wet Seal, Contempo Casuals and Mervyns.

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