August 30, 2018 / 8:38 PM / in 2 months

UPDATE 2-Lululemon 2nd-qtr profit doubles as China, online sales jump; shares climb

(Adds company comments, financial details, updates share price)

By Nichola Saminather

TORONTO, Aug 30 (Reuters) - Canadian athletic apparel maker Lululemon Athletica Inc on Thursday posted second-quarter profit that almost doubled from a year earlier, beating estimates, lifted by strong growth in online sales, particularly in China.

Comparable sales in Asia grew 55 percent from a year ago, with the company’s China e-commerce business expanding more than 200 percent, Chief Operating Officer Stuart Haselden told analysts on a conference call. That contributed to a 48 percent increase in online sales, and a 25 percent rise in revenue.

“We have a real big opportunity internationally, in particular in Asia,” Calvin McDonald, who became chief executive of the Vancouver-based company this month, said on the call. “It’s one that the team feels is a growth potential, of disproportionate growth for this business and brand.”

The stock jumped 7.6 percent to $147.26 in after-hours trading in New York, surpassing a record intraday high touched this week. It had dropped 1.2 percent to close at $137 on Thursday.

Lululemon, which popularized “athleisure wear” by turning pricey women’s yoga wear into mainstream fashion, is expanding its online operations at home and overseas to navigate muted brick-and-mortar sales across the retail industry as consumers shift to online shopping.

The company plans to open e-commerce sites in South Korea and Japan this year, Haselden said.

The company reported net income of $95.8 million, or 71 cents per share, in the three months ended July 29, compared with analyst estimates of $66.5 million, or 49 cents, and up from $48.7 million a year earlier.

Third-quarter earnings are expected to be 65 to 67 cents per share on revenue of $720 million to $730 million, the company said in a statement. That compares with per-share adjusted earnings of 56 cents on revenue of $619 million a year earlier.

Thursday’s earnings report was the first for McDonald, who started in his role on Aug. 20, moving from LVMH’s cosmetics retailer Sephora where he headed up the Americas division.

Lululemon had been without a CEO since Laurent Potdevin abruptly resigned in February for falling short of the company’s standards of conduct.

Reporting by Nichola Saminather in Toronto Editing by Richard Chang and Matthew Lewis

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