Canadian yoga and leisure apparel maker Lululemon Athletica reported quarterly profit and sales on Thursday that topped expectations as online sales surged 30 percent thanks to an effort to beef up its e-commerce strategy, and the company raised its outlook.
The results helped ease concerns the "athleisure" trend popularized by Lululemon may be cooling. Shares, which closed at $57.55 ahead of the results, rose 8 percent in after-market trading.
Executives told analysts results were strong across all key markets and product categories, and that more customers also shopped at its bricks and mortar stores.
"Our performance in Q2 and the solid momentum we are seeing in early Q3 gives me great confidence in our strategy and long-term plan," said Chief Executive Officer Laurent Potdevin.
Lululemon's results contrasts with the struggles facing rivals like Nike Inc and Under Armour, squeezed by intense competition, heavy discounting and worries about changing industry trends.
Total comparable sales for Lululemon grew 7 percent, higher than the average 4 percent rise 27 analysts had expected, according to Thomson Reuters data, while comparable sales at physical stores rose 2 percent.
Online sales from its website soared 30 percent on a constant dollar basis. Excluding an online warehouse sale during the quarter, net revenue rose 16 percent online.
Vancouver-based Lululemon, which announced it was closing its money-losing ivivva stores in June, reported earnings of $48.7 million, or 36 cents per share in the second quarter ended July 30. This exceeded the 35 cents per share analysts had forecast, according to Thomson Reuters I/B/E/S.
Adjusted diluted earnings, which excluded the impact of its ivivva restructuring costs, was 39 cents a share.
Revenue rose 13 percent to $581.1 million, topping the estimated $567.79 million analysts had predicted.
It raised its forecast and now said it was expecting to earn between $2.545 billion and $2.595 billion in full-year net revenue, up from its previous outlook of $2.53 billion to $2.58 billion.
The retailer forecast comparable sales to rise in the mid-single-digit range.
Full-year adjusted diluted earnings per share, excluding the impact of ivivva, was expected to come in between $2.35 and $2.42.