Vancouver—Lululemon Athletica Inc. today reported a better-than-expected 47% jump in its third quarter profits, but despite impressive gains, the company forecast slower sales for fourth quarter.
For the quarter ended Oct. 28, the yoga-wear and accessories specialty store posted net income of $57.3 million, or 39 cents a share, compared with a third quarter profit of $38.8 million, or 27 cents a share, a year ago. That was better than Lululemon’s own forecast for per-share earnings of 34 to 36 cents and analysts’ estimate of 37 cents.
Net revenue also had impressive gains: climbing 37% to $316.5 million ahead of analysts’ estimates for $305 million. Comparable store sales rose 18%.
“Our stellar results were driven by first-rate execution, strong community engagement, beautiful product and continued strength in our e-commerce business,” Christine Day, ceo, said.
Q4 Comp Sales Deceleration?
The company’s direct to consumer sales leaped 89% to $45.1 million. Gross profits, however, dipped to 55.4% from 55.8% in third quarter 2011.
While the company typically issues what analysts call conservative forecasts, its fourth quarter forecast for comparable store sales to rise “in the high single digits” represents a deceleration from fourth quarter a year ago when Lululemon posted a 26% increase in comp sales.
Lululemon’s fourth quarter sales forecast for revenue of $475 million to $480 million also fell below analysts’ consensus for $490.5 million. Similarly, the company’s per-share earnings estimate of 71 to 73 cents was below analysts’ forecast for 75 cents.
Nevertheless, the company’s full year forecast was more in line with analysts’ estimates.
The retailer raised its full year forecast to $1.81 to $1.83 a share on sales of $1.36 billion to $1.365 billion. Analysts’ forecast $1.82 a share on sales of $1.364 billion.
In other news, Lululemon named William Glenn, president of global commercial services at American Express, as a board member, expanding the board’s size to 10 directors.