Revenue at Lululemon (NASDAQ: LULU) jumped 10% in the third quarter, led by a big increase in online sales. But the sales forecasts for the holiday shopping season isn’t looking as festive.
The Vancouver-based yoga-wear company reported December 11 its revenue grew to US$419.4 million from US$379.9 million during the same period a year prior.
Quarterly profit, meanwhile, fell 8.5% to US$60.5 million compared with US$66.1 million during Q3 2013.
Although in-store sales fell 3%, online revenue went up 27% to US$77.2 million.
Lululemon CEO Laurent Potdevin told investors on a conference call the company expects results for the fourth quarter will be impacted by as much as US$15 million due to West Coast port delays, a lower Canadian dollar and delayed store openings.
He said shipments have been delayed by seven to 10 days due to issues at North American ports.
CFO John Currie said even though the port disruption are in the U.S., it’s still impacting the Canadian side of the business.
“A lot of the ships that come from Asia might stop in L.A., then Seattle and then make their way up to Vancouver where we unload for Canadian shipments,” he said.
While online sales have driven the jump in revenue, Currie said the bricks-and-mortar side of the business has been gaining traction due to more foot traffic coming through the stores.
Potdevin said the new Canadian flagship store on Robson Street almost immediately became one of the company’s top global performers upon its opening in August.
He said volume at the new store is 50% higher than the previous location on Robson Street.
Lululemon has been in the midst of upheaval for more than a year.
Complaints over the sheerness of yoga pants forced a major product recall earlier in 2013.
Christine Day soon departed as Lululemon CEO and founder Chip Wilson stepped down as chairman in December 2013 when he was criticized for making disparaging remarks about how women with certain body types should not wear the company’s yoga pants.
In June, Wilson pushed for a boardroom shake up when he asked other shareholders to follow his lead and vote against the re-appointment of directors Michael Casey and RoAnn Costin. The pair kept their positions.
Lululemon’s stock was up 8.65%, trading at US$50.73 as of press time.
