Earnings of Lululemon Athletica (NASDAQ: LULU), the apparel retailer that pioneered the concept of athleisure, rose sharply in the second quarter and surpassed the market’s forecast as comparable sales increased in double digits. Revenues grew 22% and topped the Street view, sending the company’s stock soaring in Thursday’s extended trading session.
Aided by a 15% increase in comparable sales, revenues advanced to $883.4 million in the July-quarter from $723.5 million a year earlier, beating analysts’ prediction. Direct-to-customer sales increased by 30%.
Direct-to-customer sales accounted for 24.6% of total revenues. Having opened five new stores, the company ended the quarter with a total of 460 stores.
Net profit was $125 million or $0.96 per share, compared to $95.8 million or $0.71 per share in the second quarter of 2018. Analysts had forecast slower growth.
Calvin McDonald, CEO of Lululemon Athletica, 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.”
Encouraged by the impressive results, the management is currently looking for low double digits growth in comparable sales for the third quarter, when revenues are expected to be in the range of $880 million to $890 million. The estimate for earnings per share is $0.90 to $0.92.
For the whole of 2019, Lululemon expects revenue to be in the range of $3.80 billion to $3.84 billion, based on comparable sales growth in low double digits. It is looking for full-year earnings of $4.63-$4.70 per share.
After losing momentum in the final weeks of 2018, Lululemon shares gained significantly this year and reached an all-time high last month. In the past twelve months, the stock moved up 22%. It closed Thursday regular trading higher and continued to gain during the extended session.