Lululemon profit jumps as retail chain expands

Thu Sep 11, 2008 4:14pm EDT
 
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By Susan Taylor

OTTAWA (Reuters) - Lululemon Athletica Inc defied a tough retail market and reported a sharp jump in quarterly profit on Thursday, crediting an expansion of its chain of yoga-inspired clothing stores.

Lululemon's earnings more than doubled, topping analyst expectations, as revenues rose by 48 percent, sending its shares surging in Toronto and New York.

Sales at stores opened at least a year, an important measure of growth in retailing known as comparable store sales, rose 13 percent on a constant-dollar basis, or 18 percent including the impact of currency exchange.

"Thirteen percent comparable store sales before currency adjustment is just amazing in this environment," said ThinkPanmure analyst Suzanne Price.

"When women find something that makes them ... feel better about their bodies in the clothes they're wearing, that withstands any economic effect."

Profit rose to $11.1 million, or 16 cents a share, in the 13 weeks ended August 3, partly lifted by a lower tax rate. That is up from $5.1 million, or 7 cents, in the same period last year.

Revenue in the company's second quarter rose 48 percent to $85.5 million, fueled by new stores. In the past 12 months, the company has expanded the number of stores it operates by about 50 percent.

Analysts had forecast earnings of 13 cents a share before items on average and revenue of $88.2 million, according to Reuters Estimates.   Continued...

 
<p>A buddha statue sits at the entrance of Lululemon Athletic, a yoga clothing store, as a women shop with her dog in San Francisco, California, in this March 31, 2006 file photo. REUTERS/Kimberly White/Files</p>