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Lululemon earns fall but beats 3Q expectations

December 11, 2014

Lululemon’s third-quarter earnings sank 9 percent as a spike in expenses outweighed revenue gains, but the yoga gear company’s performance still topped Wall Street expectations.

The Canadian company also nudged up its full-year earnings forecast while lowering its expectation for revenue.

Its U.S.-traded shares climbed almost 8 percent on morning trading.

Overall, Lululemon earned $60.5 million, or 42 cents per share, in the quarter that ended Nov. 2. That compares to earnings of $66.1 million, or 45 cents per share, the previous year.

Analysts expected, on average 38 cents per share in the most recent quarter, according to FactSet.

Revenue climbed 10 percent to $419.4 million but fell short of analyst expectations for $424.7 million.

Selling, general and administrative expenses also jumped 16 percent in the quarter to $129.9 million.

Total comparable sales, which includes sales at stores open at least a year and direct-to-consumer revenue, rose 3 percent on a constant dollar basis.

Lululemon Athletica Inc. now expects full-year adjusted earnings to range between $1.74 and $1.78 per share, up from its previous forecast for $1.72 to $1.77. But the company also dropped revenue guidance to between about $1.77 billion and $1.78 billion from $1.78 billion to $1.8 billion.

Analysts forecast earnings of $1.77 per share on $1.8 billion in revenue.

The company’s stock jumped $3.60, or 7.7 percent, to $50.30 in morning trading. The shares had tumbled 21 percent so far this year, as of Wednesday’s close, while the Standard & Poor’s 500 index has climbed 9 percent.

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