After-Hours Alert: Why Lululemon Shares Are Taking Off

Apparel and footwear company Lululemon Athletica Inc LULU reported second-quarter financial results after market close Thursday. Here are the key highlights for investors.

What Happened: Lululemon reported second-quarter revenue of $1.9 billion, up 29% year-over-year. The revenue total came in ahead of a Street estimate of $1.76 billion, according to data from Benzinga Pro.

Adjusted earnings per share in the second quarter were $2.20, beating a Street estimate of $1.86.

Lululemon reported comparable sales up 23% year-over-year in the second quarter. Direct-to-consumer revenue was up 30% year-over-year in the second quarter for the company. Direct-to-consumer revenue represented 42% of the company’s total in the second quarter.

Revenue for the North American segment was up 29% year-over-year. Revenue for the international segment was up 35% year-over-year in the second quarter.

“The momentum in our business continued in the second quarter, fueled by the strong guest response to our product innovations, community activations and omni experience,” Lululemon CEO Calvin McDonald said.

Lululemon bought 400,000 shares of its stock in the second quarter at an average of $298.38 for a total of $125.3 million.

Lululemon opened 21 net new company-owned stores in the second quarter, bringing the total to 600.

Related Link: Joe Terranova Slams Jefferies Lululemon Downgrade

What’s Next: Lululemon is guiding for third-quarter revenue to be in a range of $1.78 billion to $1.805 billion, ahead of a Street estimate of $1.73 billion according to data from Benzinga Pro. The company is projecting third-quarter earnings per share in range of $1.90 to $1.95, ahead of a Street estimate of $1.78.

“As we look ahead, we’re excited about our ability to successfully deliver against our Power of Three x2 growth plan and create ongoing value for all our stakeholders,” McDonald said.

For the full fiscal year, Lululemon sees revenue hitting $7.865 billion to $7.940 billion, which represents a three-year compounded annual growth rate of 26%. The Street estimate for revenue is $7.69 billion.

Full-year earnings per share are estimated to be $9.75 to $9.90 versus a Street estimate of $9.44.

LULU Price Action: Lululemon shares are up 8.97% to $294.45 in after-hours trading on Thursday. Shares have traded between $251.51 and $485.83 over the past 52 weeks.

Photo: Courtesy Lululemon