Lululemon Athletica Inc. (NASDAQ: LULU) on Wednesday reported first-quarter sales that top analysts’ estimates, while profits fell short of expectation. The company also provided soft guidance for the current period.
The Vancouver-based company said that revenue rose 17 percent to $495.5 million in the quarter ended May 1. The results top analyst’s projection of $487.8 million.
New products help boost the sales. The yoga apparel retailer has been adding more innovative pants and fabrics that fit customers’ preferences better. The company also launched more products in men’s and children’s business to help boost sales.
"We are pleased with our first quarter performance, delivering strong sales results and gross margin that exceeded expectations," Lululemon CEO Laurent Potdevin said in a statement. "We finished the quarter with our inventory levels rebalanced and on track to achieve our goals for the year."
However, the company posted a profit that misses analysts’ estimates. The profit for the period were $45.3 million, or 33 cents a share, compared with $47.8 million, or 34 cents a share, a year earlier. Analysts had projected earnings of 39 cents.
The company said that the increasing costs accounted for the decline quarterly profit. General and administrative expenses climbed 32% in the quarter.
The company now expects the second quarter sales to be $505 million to $ 515 million, while guidance for profit is 36 cents to 38 cents a share. Analysts estimate earnings of 39 cents a share on $514 million in revenue.
Lululemon shares jump 4 percent to $70.89 at 12:38 p.m. in New York.