Athletic apparel retailer Lululemon Athletica (LULU) reported a 60% jump in earnings for its third quarter helped by an increase in revenue as well as higher comparable store sales. The results exceeded analysts’ expectations. The yoga-clothing maker raised its guidance for the full year 2018 and guided fourth-quarter results in line with the consensus view.
Net income climbed 60% to $94.4 million and earnings jumped 65% to $0.71 per share. The results included tax expense related to the tax act during the third quarter of fiscal 2018 and the costs related to the restructuring of its Ivivva operations in the third quarter of fiscal 2017. Adjusted earnings surged by 34% to $0.75 per share.
Revenue grew 21% to $747.7 million. On a constant dollar basis, net revenue increased 22%. Total comparable sales increased 17% or up 18% on a constant dollar basis. Comparable store sales rose 6% and direct to consumer net revenue grew 44%.
Looking ahead into the fourth quarter, the company expects revenue in the range of $1.115 billion to $1.125 billion and EPS in the range of $1.64 to $1.67. Comparable sales are expected to increase in the high-single to low-double digits on a constant dollar basis.
For the full year 2018, Lululemon lifted its revenue outlook to range of $3.235 billion to $3.245 billion from the prior range of $3.185 billion to $3.235 billion. Earnings guidance was raised to the range of $3.61 to $3.64 from the previous range of $3.45 to $3.53. Total comparable sales growth are now predicted to be in the mid-teens on a constant dollar basis compared to the prior growth estimate of low teens.
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The Vancouver, Canada-based company ended the third quarter with $703.6 million in cash and cash equivalents and inventories of $496 million. Lululemon ended the quarter with a total of 426 stores, up from 415 stores at the end of the second quarter of fiscal 2018.
Lululemon continued to see strong momentum across its business based on the current and future strategic investments for achieving its long-term growth objectives.
Shares of Lululemon ended Thursday’s regular session down 1.63% at $131.44 on the Nasdaq. Following the earnings release, the stock inched down over 5% in the after-market session.