Lululemon Athletica Inc. soared as much as 14 per cent in late trading after third-quarter earnings blew past analysts’ estimates and sales showed signs of strengthening as the yogawear maker heads into the holiday season.
Profit in the quarter was 47 cents a share, excluding some items, the Vancouver-based company said in a statement Wednesday. Analysts estimated 43 cents on average. Sales also beat projections in the period, which ended October 30.
Chief Executive Officer Laurent Potdevin also made bullish remarks about the fourth quarter. Though sales in the period were initially mixed, they have “since improved,” he said.
The results suggest Lululemon is overcoming industrywide discounting and sluggish retail traffic. Potdevin also is working to expand the company’s customer base, helping insulate the chain from fashion swings. The executive has said the chain could eventually get 40 per cent of its sales from men, and he’s building Lululemon’s presence overseas.
The stock jumped as high as $68 in extended trading after the results were released. Lululemon had already gained 14 per cent this year through the close of trading on Wednesday.
Same-store sales, including direct-to-consumer orders, rose 7 per cent last quarter. That beat the average estimate of 5.4 per cent, according to Consensus Metrix. Net revenue climbed to $544.4 million (Dh1.99 billion), compared with a $540.1 million projection.
The company expects same-store sales to gain by a mid-single-digit percentage in the fourth quarter, when holding currency constant. Revenue will be $765 million to $785 million in the period. Analysts have estimated $786.7 million.
