Lululemon Athletica Q3 revenues climb 10 percent

REPORT_ Lululemon Athletica announcing its financial results for the third quarter ended November 2, 2014 said that company’s net revenue increased 10 percent to 419.4 million dollars from 379.9 million dollars in the third quarter of fiscal 2013. Total comparable sales, which includes comparable store sales and direct to consumer, increased by 3 percent during the period under review. Comparable store sales for the third quarter decreased by 3 percent on a constant dollar basis and direct to consumer revenue increased 27 percent on a constant dollar basis.

Direct to consumer revenue increased to 77.2 million dollars, or 18.4 percent of total company revenues, an increase from 16.3 percent of total company revenues in the third quarter of fiscal 2013. Gross profit for the quarter increased 3 percent to 211.1 million dollars, and as a percentage of net revenue gross profit decreased to 50.3 percent for the quarter from 53.9 percent in the third quarter of fiscal 2013.

Income from operations for the quarter decreased 12 percent to 81.2 million dollars, and as a percentage of net revenue was 19.4 percent compared to 24.3 percent of net revenue in the third quarter of fiscal 2013. Diluted earnings per share for the quarter were 0.42 dollars on net income of 60.5 million dollars, compared to diluted earnings per share of 0.45 dollars on net income of 66.1 million dollars in the third quarter of fiscal 2013.

Net revenue for the first three quarters increased 12 percent to 1,194.7 million dollars from 1,070.2 million dollars in the same period of fiscal 2013. Total comparable sales increased 1 percent for the first three quarters on a constant dollar basis. Comparable store sales for the first three quarters decreased by 4 percent on a constant dollar basis and direct to consumer revenue increased 27 percent on a constant dollar basis. Direct to consumer revenue increased 25 percent to 206.7 million dollars, or 17.3 percent of total company revenues, in the first three quarters of fiscal 2014, an increase from 15.5 percent of total company revenues in the first three quarters of fiscal 2013.

Gross profit for the first three quarters increased 8 percent to 604.1 million dollars, and as a percentage of net revenue gross profit was 50.6 percent as compared to 52.4 percent in the same period of fiscal 2013. The company ended the quarter with 289 stores.

Laurent Potdevin, Lululemon's CEO, commented on the results saying, “I am pleased that our third quarter results demonstrated sequential improvements as the quarter progressed, with all key facets of our business - brand, guest experience, and product - contributing to our momentum.”

For the fourth quarter of fiscal 2014, the company expects net revenue to be in the range of 570 million dollars to 585 million dollars based on a total comparable sales increase in the low single digits on a constant dollar basis. Diluted earnings per share are expected to be in the range of 0.65 dollars to 0.69 dollars for the quarter. For the full fiscal 2014, the company expects net revenue to be in the range of 1.765 billion dollars to 1.780 billion dollars based on a total comparable sales increase in the low single digits on a constant dollar basis. Diluted earnings per share are expected to be in the range of 1.53 dollars to 1.57 dollars for the full year, or 1.74 dollars to 1.78 dollars.