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Lululemon posts 14 percent revenue rise in Q3, raises outlook

For the third quarter ended October 29, 2017, Lululemon Athletica’s net revenue was 619 million dollars, an increase of 14 percent compared to the third quarter of fiscal 2016. On a constant dollar basis, net revenue increased 12 percent. Total comparable sales increased 8 percent, or increased 7 percent on a constant dollar basis and comparable store sales increased 2 percent or 1 percent on a constant dollar basis. Direct to consumer net revenue increased 26 percent or 25 percent on a constant dollar basis. Gross profit was 322 million dollars, an increase of 16 percent, while adjusted gross profit was 323.1 million dollars, again an increase of 16 percent.

Commenting on the Q3 trading, Laurent Potdevin, CEO, Lululemon, said in a media release: "As we start the holiday season, I'm energized by our momentum and we are increasing guidance to reflect this performance. I'm grateful for the enthusiasm I see every day across our collective as we remain on our path to delivering 4 billion dollars in revenue in 2020."

Lululemon updates Q4 and FY17 outlook

Gross margin was 52 percent, an increase of 90 basis points compared to the third quarter of fiscal 2016. Adjusted gross margin was 52.2 percent, an increase of 110 basis points. Diluted earnings per share were 0.43 dollar compared to 0.50 dollar in the third quarter of fiscal 2016. Adjusted diluted earnings per share were 0.56 dollar compared to 0.47 dollar for the third quarter of fiscal 2016.

In connection with the restructuring of the Ivivva operations, the company expects to recognize total pre-tax costs of between 45 million dollars and 50 million dollars in fiscal 2017, inclusive of 45.4 million dollars recognized during the first three quarters of fiscal 2017.

For the fourth quarter, Lululemon expects net revenue to be in the range of 870 million dollars to 885 million dollars based on a total comparable sales increase in the mid-single digits on a constant dollar basis. Diluted earnings per share are expected to be in the range of 1.18 dollars to 1.21 dollars for the quarter. Excluding the impact of the Ivivva restructuring, the company expects adjusted diluted earnings per share to be in the range of 1.19 dollars to 1.22 dollars for the quarter.

For the full fiscal 2017, the company now expects net revenue to be in the range of 2.590 billion dollars to 2.605 billion dollars based on a total comparable sales increase in the mid-single digits on a constant dollar basis. Diluted earnings per share are expected to be in the range of 2.20 dollars to 2.23 dollars for the full year. Excluding the impact of the Ivivva restructuring, Lululemon expects adjusted diluted earnings per share to be in the range of 2.45 dollars to 2.48 dollars for the year.

Picture:Lululemon website