Lululemon Athletica Inc. on Wednesday posted an almost 60 percent gain in third-quarter profits, boosted by the performance of its yoga and running lines.
This story first appeared in the December 10, 2009 issue of WWD. Subscribe Today.
For the three months ended Nov. 1, income was up 59.2 percent to $14.1 million, or 20 cents a diluted share, from $8.8 million, or 13 cents, a year ago. Revenues rose 29.7 percent to $112.9 million from $87 million. Revenue from company-owned stores advanced 26.4 percent to $98.1 million from $77.6 million, with same-store sales rising 10 percent on a constant-dollar basis.
The company increased its gross profit for the third quarter by 34.4 percent to $56.3 million as gross profit grew to 49.9 percent of sales from 48.1 percent in the year-ago quarter.
Straddling analysts’ consensus estimate, the company said it expects earnings of between 26 cents and 28 cents a diluted share in the fourth quarter with same-store sales rising in the midteens on a constant-dollar basis. The third-quarter profit was 1 cent better than consensus.
“Sales momentum continued to build in the third quarter as consumers responded to our distinctive product, community connections and in-store guest experience,” said Christine Day, chief executive officer.
Day noted that the company also “made significant progress in improving our gross margin with a return to the 50 percent level, and [we] are very pleased to deliver these results in a challenging retail environment.”
Day said on a call with Wall Street analysts that the company achieved its sales results “without changing our promotion cadence.”
She said the yoga line was a driver of sales in the quarter, and there was “incredible” reaction to the brand’s running line. The company’s e-commerce site carries its full line of product, and free shipping was offered starting in October.
For the nine months, income was up 4.9 percent to $29.8 million, or 42 cents a diluted share, from $28.4 million, or 40 cents. Sales rose 17.1 percent to $292.3 million from $249.6 million.