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Lululemon's profit beats estimates as online sales rise

Canadian yogawear chain Lululemon Athletica reported a better-than-expected quarterly profit, helped by higher online sales, sending its shares up about 12 percent premarket.

For more than a year, Lululemon has worked to smooth out quality and supply-chain issues, battle lawsuits, deal with departing executives and soothe customer sentiments following a high-profile recall of yoga pants deemed transparent and founder Chip Wilson's controversial comments.

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The company, which cut its expectations in June, marginally raised its full-year earnings forecast on Thursday.

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Lululemon said it now expected full-year adjusted earnings of $1.72 to $1.77 per share, up from $1.71 to $1.76. The company also increased the lower end of its revenue forecast to $1.78 billion from $1.77 billion.

Analysts on average were expecting full-year earnings of $1.74 per share on revenue of $1.78 billion, according to Thomson Reuters I/B/E/S.

The company's net income fell to $48.7 million, or 33 cents per share, in the second quarter ended Aug. 3, from $56.5 million, or 39 cents per share, a year earlier.

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Revenue rose about 13 percent to $390.7 million.

Analysts on average had expected earnings of 29 cents per share on revenue of $376.8 million.

Total comparable sales, which includes comparable store sales and direct to consumer, remained flat during the quarter on a constant-dollar basis. Comparable store sales decreased 5 percent.

Direct-to-consumer revenue, which includes online and catalog sales, rose 30 percent in the quarter to $63.5 million, the company said.

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Shares of the Vancouver-based retailer closed at $38.39 on the Nasdaq on Wednesday. They had fallen more than 40 percent since March 2013, when the company announced a recall of its transparent yoga pants. (Click here for the latest quote.)

By Reuters