Shares of Lululemon Athletica Inc. (LULU, Financial) rose 3.9% to $195.75 in after-hours trading on Thursday after beating earnings estimates for the second quarter by 7 cents.
The Canadian athletic apparel retailer posted earnings of 96 cents per share, up 35.2% from the prior-year quarter, on $883.4 million in revenue. Revenue grew 22.1% year over year, topping analysts’ projections by $38.32 million.
The company also posted a 15% increase in total same-store sales, reflecting a 10% jump in store revene and 30% growth in direct-to-consumer revenue.
Moreover, the gross profit margin of 55% of net revenue gained 20 basis points. The operating margin advanced 50 basis points to 19% of net revenue. The effective tax rate of 26.4% was down 310 basis points from the prior-year quarter at 29.5%. Thus, the net income margin progressed 90 basis points to 14.2%.
“We're pleased with the ongoing strength across our business," CEO Calvin McDonald said. "We continue to make progress in delivering against our Power of Three growth pillars - product innovation, omni-guest experience, and market expansion. Our success demonstrates the significant runway in front of lululemon and I'm grateful to our teams for bringing our vision to life.”
Looking ahead to the full year, Lululemon raised its revenue outlook to a range of $3.80 billion to $3.84 billion from a previous range of $3.73 billion to $3.77 billion. This compares to analysts'Ă‚ estimates of $3.81 billion. The company also anticipates higher earnings per share of $4.63 to $4.70 versus the previous range of $4.51 to $4.58. Analysts are projecting earnings of $4.65 per share.
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The balance sheet had $623.7 million in cash on hand and equivalents and $494.3 million in total inventories as of Aug. 4. Total equity was worth approximately $1.51 billion.
Lululemon Athletica closed at $188.41 per share on Thursday for a market capitalization of $24.55 billion. The stock has climbed 55% so far this year to above the 100- and 50-day simple moving average lines.
The closing price on Thursday was 70.2% above the 52-week low of $110.71 and 3.1% below the 52-week high of $194.25.
Lululemon Athletica has outperformed the Nasdaq by nearly 33% so far this year. The company does not pay dividend.
Disclosure: I have no positions in any securities mentioned.
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