Lululemon sees profit climb in Q3, but same-store sales come in nearly flat - InfoNews

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Lululemon sees profit climb in Q3, but same-store sales come in nearly flat

The front of a Lululemon Athletica store is seen in downtown Victoria, on June 9, 2013. THE CANADIAN PRESS/Jonathan Hayward
December 12, 2013 - 4:44 AM

VANCOUVER - Lululemon Athletica (Nasdaq:LULU) reports that its same-store sales were nearly flat in the third quarter even though its net income rose 15 per cent.

The retailer, most known for its yoga clothing, says its profit came in at $66.1 million, or 45 cents per dilluted share, for the three-month period ended Nov. 3. This compared with $57.3 million, or 39 cents per dilluted share, a year ago.

Revenues climbed to $379.9 million from $316.5 million for the quarter.

The Vancouver-based company says it expects flat comparable-store sales will also weigh on its results for the fourth quarter. It forecasts dilluted earnings per share to come in between 78 to 80 cents on $535 million to $540 million of revenue.

Lululemon has struggled this year after a recall of its black Luon pants from store shelves after customers complained that the pants were too sheer. The recall was followed by the abrupt departure of chief product officer Sheree Waterson.

The company blamed the problems on a style change and production issues and moved to fix the problems, but later, new complaints emerged about the quality and durability of their pricey workout gear.

On Tuesday, the company named Laurent Potdevin as its next chief executive and announced that founder Chip Wilson will step aside as chairman next year.

Potdevin takes over from outgoing chief executive Christine Day in January.

Day has overseen the company's expansion beyond yoga clothes and the more than tripling the company's share value since she took over as chief executive in 2008.

"We are proud of our third quarter results, with sales in line with our expectation and earnings ahead of our guidance and rebounding to a double digit growth rate," said Day in a statement Thursday.

"This so far has been a year of challenges, learning, and growth for Lululemon, and while our outlook for the fourth quarter is being impacted by both macro and execution issues, I believe that the investments we are making in the business combined with the team in place create a strong platform for growth in the years ahead."

Meanwhile, Wilson's department comes about a month after he touched off a flurry of criticism by suggesting to Bloomberg TV in an interview that production issues may not have been the only issue regarding the too-sheer pants.

"Quite frankly, some women's bodies just actually don't work for it,'' he said. "It's really about the rubbing through the thighs, how much pressure is there."

Critics accused Wilson of shaming women's bodies and gathered thousands of supporters through an online petition.

Wilson later posted a video message online in which he said he was "sad for the repercussions of my actions. I'm sad for the people of Lululemon who I care so much about that have really had to face the brunt of my actions. I take responsibility for all that has occurred."

News from © The Canadian Press, 2013
The Canadian Press

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