Lululemon Athletica inc. (LULU) is a designer and retailer of technical athletic apparel operating primarily in North America and Australia. LULU is currently trading around $43.72 in a 52 week range of $36.26 – 77.75. The company’s stock has been underperforming the market this year with shares declining 25.96% year to date.

For the quarter, LULU delivered a 13% increase in net revenue to $390.7 million as total comparable sales, which includes retail locations as well as online sales, were flat on a constant currency basis. Physical same-store sales dipped 5%, while comparable direct to consumer revenue rose 30% year-over-year. Net income for the quarter totaled $48.7 million, or an adjusted $0.33 per share, down from $56.5 million, or $0.39 per adjusted share in the year-ago period, while gross margin dipped 350 basis points to 50.5%. By comparison, Wall Street’s consensus expectation had called for $376.8 million in revenue and just $0.29 in EPS.

Lululemon also adjusted its full-year sales and earnings guidance. The company is now forecasting revenue of between $1.78 billion and $1.8 billion based on total comparable sales in the low-single-digits, and anticipates adjusted EPS will be in the $1.72 to $1.77 range. Both figures are in-line with current Wall Street forecasts.

Andrew Keene
KeeneOnTheMarket.com

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