VANCOUVER - Lululemon Athletica Inc. continued to cash in on the success of its yoga-inspired fashions and accessories, with third-quarter profits beating analyst expectations on sales growth that was strong but not as robust as analysts had expected.
The Vancouver-based retailer (TSX:LLL) said Thursday its third-quarter profit rose 51 per cent to US$38.8 million or 27 cents per share from $25.7 million or 18 cents per share in the same quarter a year earlier.
Lululemon's revenue also rose sharply, growing by 31 per cent to US$230.2 million from US$175.8 million in the same period of 2010.
It shares took a beating in early trading, falling $7.30 or 14 per cent to $43.45 even as profits beat analyst estimates of 25 cents per share. Revenue was below the $235.7 million they expected, according to Thomson Reuters figures, though it was at the high end of the company's own guidance range issued in September.
"These strong revenue results were at the top end of our guidance and as anticipated, we also had unmet sales demand through out the quarter," Lululemon chief executive Christine Day said on a conference call with analysts.
"As we finish 2011, we are positioned where we want to be — we continue to perform at the top of our sector and remain focused on our four strategic growth priorities, driving comparable-store sales, e-commerce, new stores and preparing for international expansion."
Lululemon said it expects revenue in its fiscal fourth quarter will be even higher, rising to a range of US$327 million to US$332 million — putting the company on track to do better for the full year than it had previously anticipated.
It also estimated diluted earnings per share will be in a range of 40 cents to 42 cents per share in the fourth quarter.
Same-store sales for the third quarter — sales at stores open at least a year — were up 16 per cent, the company reported.