The yoga apparel company topped Wall Street analyst’s projections by beating last quarter’s earnings by 40%. They posted a profit of $46.6 million, or 32 cents a share up from the previous quarter’s $33.4 million profit, or 23 cents a share. Revenue beat expectations at $285.7 million, up from $186.8 million a year earlier after bolstering inventory to boost sales. Although earnings estimates reached new highs, Lululemon had a weaker than expected outlook for the next quarter with an expected net revenue of $273 million, compared to analysts’ estimates of $290 million. Lululemon expects its previous sales growth rate of 25% to slow to low double digits. Chief Executive Christine Day said, “Our strategy to increase inventory levels led to strong revenue growth and earnings performance in the first quarter as our guests responded well to our spring styles and colors,” contrary to low inventory levels in the past, leaving some stores unable to meet customer’s demand.
David Cornes holds a degree in Economics from The University of Montana.
Dave@KeeneOnTheMarket.com