Athletic apparel maker Lululemon Athletica reported a third-quarter profit above analysts’ estimates, driven by a rise in its established store sales and higher online traffic.
Total comparable sales, a key indicator for the athleisure company’s business, rose 17 per cent, while analysts on average were expecting a rise of 13.7 per cent.
Lululemon, which popularized “athleisure wear” by turning pricey women’s yoga wear into mainstream fashion, has been investing in expanding its online presence and offering more men’s wear to lure customers in a highly competitive retail industry, dominated by the likes of Under Armour Inc, Nike and Gap Inc.
The company said traffic to its e-commerce website rose more than 35 per cent in the quarter while its online business in China rose 76 per cent. Lululemon has been expanding its online presence in Asia including China, South Korea and Japan.
“All good signs of what the future holds for us across Asia,” Chief Operating Officer Stuart Haselden said on a post-earnings call.
Lululemon said it expects fourth-quarter revenue between $1.12 billion and $1.13 billion, almost in line with analysts’ estimates of $1.12 billion.
Shares of the company, which initially fell as much as 5 per cent, pared most of its losses to trade up at $131.50 after the bell.
“LULU tends to guide conservatively, setting up for beats,” Simeon Siegel analyst at Instinet said.
The company’s net income rose to $94.4 million, or 71 cents per share, in the quarter ended Oct.28, from $58.9 million, or 43 cents, a year earlier.
Total revenue rose to $747.7 million from $619 million a year ago.
Excluding items, Lululemon earned 75 cents per share.
Analysts on average had expected the company to report a profit of 70 cents per share and revenue of $737.05 million according to IBES data from Refinitiv.