Lululemon Athletica Inc. (NASDAQ/LULU) announced its earnings for the first quarter of fiscal 2015 ended May 3. The Canadian-based yogawear retailer expects to see higher revenue and profit in the coming fiscal year.
Founded in 1998, Lululemon’s first real store opened in November of 2000 in the beach area called Kitsilano, of Vancouver, BC. The idea was to have the store be a community hub where people could learn and discuss the physical aspects of healthy living; from yoga and diet, to running and cycling, as well as the mental aspects of living a powerful life of possibilities. The company ended the quarter with 316 stores. (Source: Lululemon, last access June 9, 2015.)
According to the report, Lululemon’s net revenue for the quarter increased 10.0% to $423.5 million from $384.6 million in the first quarter of fiscal 2014. Gross profit increased by five percent to $205.9 million for the quarter. As a percentage of net revenue, gross profit was 48.6% for the quarter compared to 50.9% in the first quarter of fiscal 2014.
Diluted earnings per share for the quarter were $0.34 on a net income of $47.8 million, compared to diluted earnings per share of $0.13 on net income of $19.0 million in the first quarter of fiscal 2014. This included a $0.21 per share impact from the tax expense on the repatriation of foreign earnings. Excluding the tax expense on the repatriation of foreign earnings, diluted earnings per share were $0.34 in the first quarter of fiscal 2014.
Lululemon increased its earnings forecast and is calling for per-share profits of between $1.86 and $1.91. The company said it expects revenue in the range of $2.0 billion to $2.05 billion—up from its previous forecast of between $1.97 billion and $2.02 billion.
In 2013, Lululemon took a big hit from the turmoil caused by an embarrassing recall of overly sheer yoga pants. However, the company has been trying to improve quality, solve supply chain problems, and expand its product line.
Laurent Potdevin, Lululemon’s CEO, stated, “Our team’s solid performance resulted in another improving quarter—coming in ahead of our revenue expectations. We drove positive trends in traffic, conversion, and brand engagement, along with a continued acceleration of our e-commerce business.” Potdevin continued, “To support our long term goals, we are intentionally striking a strategic balance between strong growth and investments within innovation and infrastructure.”
On Tuesday June 9, 2015, Lululemon shares rose three percent in premarket trading after the results were released. Year-to-date, the stock is up around 10.2%.