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Lululemon Sales Bonanza Gains Steam as New CEO Takes the Reins

Lululemon Sales Bonanza Gains Steam as New CEO Takes the Reins

(Bloomberg) -- Lululemon Athletica Inc. raised its full-year revenue and profit projections after once again beating sales forecasts in the second quarter. It’s a sign that Chief Executive Officer Calvin McDonald clearly has the wind at his back as he takes over.

Lululemon Sales Bonanza Gains Steam as New CEO Takes the Reins

Key Takeaways
  • The new forecasts replace estimates that analysts had described as conservative. They also bring the yogawear maker closer to its goal of $4 billion in revenue for 2020.
  • The digital business is thriving. With a 47 percent percent jump in e-commerce sales in constant currency, the Vancouver-based company is cashing in on its revamped website and direct-marketing efforts. It’s planned a new distribution center in the Toronto region to better address orders from the east coast.
  • Shares rose as much as 8.2 percent to $148.27 in late trading. They have gained 74 percent this year through Thursday’s close, reflecting investors’ confidence in the company’s plan to accelerate e-commerce revenue growth, attract more male shoppers and expand overseas.
  • McDonald, a Canadian who most recently served as a top executive at makeup chain Sephora, joined the company earlier this month.
  • Company says experiments with new store formats also helped boost brick-and-mortar sales.
Second-quarter results and outlook:
  • Sees 3Q net revenue $720.0 million to $730.0 million, estimate $707.8 million (range $688.0 million to $741.0 million) (Bloomberg data)
  • Sees FY net revenue $3.19 billion to $3.24 billion, estimate $3.09 billion (range $3.06 billion to $3.15 billion) (BD)
  • Sees FY EPS $3.45 to $3.53, estimate $3.25 (range $3.05 to $3.44) (BD)
  • 2Q adjusted EPS 71c, estimate 49c (range 45c to 58c) (BD)
  • 2Q total comparable sales including direct-to-consumer in constant currency +19%, estimate +9.5% (Consensus Metrix, average of 25 estimates)
  • 2Q gross margin +54.8%, estimate +52.2% (BD)
  • 2Q net revenue $723.5 million, estimate $667.4 million (range $658.0 million to $679.0 million) (BD)

To contact the reporter on this story: Sandrine Rastello in Montreal at srastello@bloomberg.net

To contact the editors responsible for this story: Anne Riley Moffat at ariley17@bloomberg.net, Jonathan Roeder, Mark Schoifet

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