Lululemon Athletica Results Tops View, Outlook Strong; Shares Up 6%

(RTTNews) - Yoga apparel maker Lululemon Athletica Inc. (LULU), Tuesday reported a profit and revenues for the fourth quarter that trumped Wall Street estimates, sending its shares up 6 percent in the after-hours trading. The company also detailed a strong outlook for the current quarter and fiscal year.

Vancouver-based Lululemon's fourth-quarter profit dropped to $119.8 million or $0.88 per share from $136.1 million or $0.99 per share last year.

Results were impacted by a one-time tax expense related to changes in US tax laws. Income tax expense for the quarter rose to $137.7 million from $61.4 million last year.

Adjusted earnings rose to $1.33 per share from $1.00 per share a year ago. Analysts polled by Thomson Reuters estimated earnings of $1.27 per share. Analysts estimates typically exclude one-time items.

Revenue for the quarter grew 18 percent to $928.8 million from $789.9 million last year. On a constant dollar basis, revenues increased 16 percent. Analysts had a consensus revenue estimate of $911.42 million for the quarter.

Total comparable sales increased 12 percent, with comparable store sales up 2 percent and direct to consumer revenues up 44 percent. Gross margin improved 210 basis points to 56.3 percent.

Stuart Haselden, Chief Operating Officer, said, "We are seeing strong momentum across our business as we now move into 2018, which is further positioning us to achieve our 2020 revenue goal of $4 billion."

Looking forward to first quarter, Lululemon expects earnings of $0.44 to $0.46 per share and revenues of $612 million to $617 million. Analysts currently estimate earnings of $0.40 per share and revenues of $585.90 million for the quarter.

For the full year, the company expects earnings of $3.00 to $3.08 per share and revenues of $2.985 billion to $3.022 billion. Analysts currently estimate earnings of $3.02 per share and revenues of $2.94 billion.

LULU closed Tuesday's trading at $78.71, down $1.63 or 2.03%, on the Nasdaq. The stock, however, gained $4.89 or 6.21% in the after-hours trade.