Lululemon Athletica (NASDAQ:LULU) saw a drop in net income in 2014’s second quarter compared with the same period last year, the company announced September 11.
This decrease to $48.7 million from $56.5 million last year comes in spite of a 13% increase in net revenue to $390.7 million for the quarter. As of press time, shares of Lululemon were trading on the NASDAQ at $44.87 per share – an increase of 17% in response to better-than-expected revenue numbers.
“We obviously don’t aspire to [flat sales] and earnings that are down year-over-year, and yet are confident that the work and investment we are making are building the foundation that will fully unlock Lululemon’s long-term global potential,” company CEO Laurent Potdevin said in an investor phone conference.
The company showed a 21% jump in selling, general and administrative expenses. Potdevin said one of the ways the yogawear company is looking to increase its bottom line is online, saying that it has allocated $7 million to drive traffic and increase sales in this area.
Chief product officer Tara Poseley said Lululemon is heading into the third quarter with the plan to refresh its product mix.
“Q3 is going to be a focus on reinvigorating our core products, starting with the bottoms,” Poseley said.
“As we move into Q4, the other area that we are really clear that we need to continue to evolve are the tops and tanks, and we will be testing [product in that area.]
The company has slightly adjusted its outlook for fiscal 2014 upward; at the end of 2013, Lululemon said it forecast revenue in the $1.77-1.82 billion range, and this has now been changed to $1.77-1.80 billion.
When asked how the organization is planning to fill the roll of CFO John Currie, who announced in June that he intended to retire by the end of the year, Potdevin said it was in the final stages of an executive search.
