Lululemon Athletica Shares Rally On Strong Q2, Raised FY21 Outlook

Lululemon Athletica Inc LULU reported second-quarter FY21 sales growth of 61% year-on-year, to $1.45 billion, beating the analyst consensus of $1.33 billion. On a constant dollar basis, net revenue rose 56%.
Net revenue from company-operated stores increased 142% Y/Y, and Direct to consumer rose 8%.
North America recorded a 63% Y/Y revenue increase, and international revenue grew 49%.
Gross profit increased 72% Y/Y to $842.7 million, and gross margin expanded 390 basis points to 58.1%.
The operating margin increased 630 basis points to 20.1%, and operating income for the quarter rose 134% to $291 million.
Lululemon Athletica held $1.2 billion in cash and equivalents as of August 1, 2021. Net cash provided by operating activities for the six months totaled $499.7 million.
Adjusted EPS of $1.65 beat the analyst consensus of $1.18.
Outlook: Lululemon Athletica sees Q3 revenue of $1.40 billion - $1.43 billion versus the consensus of $1.32 billion. The company expects Q3 adjusted EPS of $1.33 - $1.38 versus the consensus of $1.32.
Lululemon Athletica expects FY21 revenue of $6.19 billion - $6.26 billion (prior $5.825 billion - $5.905 billion) versus the consensus of $5.94 billion. The company expects FY21 adjusted EPS of $7.38 - $7.48 (prior $6.73 - $6.86) versus the consensus of $6.91.
Price Action: LULU shares are trading higher by 13.25% at $431.30 in premarket on the last check Thursday.

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