TORONTO — Premium athletic apparel maker Lululemon Athletica Inc on Thursday said it would close most of its Ivivva stores for girls and reported quarterly earnings that beat analysts’ forecasts, sending its shares up 15 per cent to US$56 in after-hours trading.
Chief Executive Laurent Potdevin said sales exceeded the company’s expectations at the beginning of the first quarter, thanks to stronger-than-expected sales of new product lines and fabrics.
The company reported adjusted per-share profit of 32 cents U.S. in the first quarter ended April 30, beating the 27 cent average forecast of analysts, according to Thomson Reuters I/B/E/S. Revenue rose 5 per cent to US$520.3 million, beating the average forecast of US$514.1 million.
Total comparable sales fell 1 per cent, on a constant dollar basis, better than the average forecast for a decline of 1.9 per cent, according to Consensus Metrix.
The company said it would close 40 Ivivva stores, out of a total of 55, and expected to take US$50 million and US$60 million in Ivivva restructuring charges in fiscal 2017, including US$17.7 million posted in the first quarter.
It raised its forecast for full-year per-share profit to between US$2.28 and US$2.38, compared with previous guidance of US$2.26 to US$2.36.
The Vancouver-based company popularized the “athleisure” market, but its once stellar growth has been tarnished as rivals introduced less-expensive gymwear.
©Thomson Reuters 2017