Vancouver yogawear designer Lululemon Athletica Inc. increased revenue 31% to $230.2 million in its third quarter ended October 30, yet still disappointed analysts, who expected the company to generate $235.3 million in sales.
Missing sales expectations sent shares (NYSE:LULU; TSX:LLL) down more than 10% in early trading December 1. The company’s shares rebounded, however, and ended the day down less than 6% – to $47.88 in Toronto and US$47.17 in New York.
Net income for the quarter rose to $38.8 million, or $0.27 a share, up from $25.7 million, or $0.18 a share, in the same quarter in 2010. Analysts expected earnings of $0.25 per share.
CEO Christine Day blamed the missed sales on being unable to keep up with inventory demand.
Lululemon opened 18 stores in the third quarter and now has 165.
“We’re producing great results with great people,” Lululemon founder Chip Wilson told Business in Vancouver December 1, after the earnings were released.
He added that the company, which operates in North America and Australia, plans to expand to Europe.
“We’re going to have a showroom in London for the Olympics,” Wilson said. “That’s our first foray into Europe.”
Might Lululemon be one of the Olympic sponsors?
“Absolutely not,” Wilson said. “We’re just going in and putting a store in a back alley somewhere so we can have a presence and talk to people.”
Glen Korstrom
@GlenKorstrom