Lululemon Athletica Inc.’s new chief executive officer has certainly joined at a good time.
Calvin McDonald started his job 10 days ago, just in time to unveil the yoga-centric athleticwear company’s impressive set of second-quarter results, sending shares as high as 8.2 percent.
The Vancouver-based retailer’s net income was $95.8 million, or 71 cents a share, in the three months ended July 29, almost double the $48.7 million recorded a year earlier and dwarfing analysts’ estimates of $66.5 million, or 49 cents a share.
Revenue, meanwhile, was $723.5 million in the second quarter, an increase of 25 percent compared to the same period in 2017, while comparable sales were 20 percent higher.
Lululemon is now expecting net revenue to be in the range of $3.185 billion to $3.235 billion, up from its previous forecast of $3.04 billion and $3.075 billion.
“I’d like to congratulate the team on the tremendous results we’ve just posted for quarter two, and the strong momentum we’re now seeing into quarter three. I’m very excited to now be part of helping to create the next chapter of growth that Lululemon as we continue to build on this success,” McDonald told investors during a call, adding that this was his dream job.
He was previously president and ceo of the Americas at Sephora for five years and succeeded Laurent Potdevin, who resigned in February. At the time, the company said Potdevin failed to meet its standards for integrity. Executive chairman Glenn Murphy took the reins in between.
McDonald didn’t reveal too much about his plans for the company, but did tell investors that Lululemon has big international growth opportunities, especially in Asia.
Explaining the results in more detail, Stuart Haselden, chief operating officer, said the company enjoyed a high single-digit lift in traffic, while traffic to its e-commerce site grew more than 20 percent.
In particular, customers responded well to its newer office travel commute styles, including the On the Fly collection, which offers personal and away-from-the-body silhouettes.
At the same time, its men’s business continued to accelerate, reaching a total penetration of 22 percent in the quarter, with new styles planned for the second half.
“I’m looking forward to fall and we’re really excited for the expansion of our outerwear business. Despite the heat in August, we are already getting great initial reads on our early jacket and outerwear offerings,” Haselden said.
He added that from an income standpoint, Lululemon continues to expect to see e-commerce grow faster than its store business.