Lululemon Athletica stock jumped by over 7% late Thursday in trading after hours after the athletic apparel retailer posted sales and earnings for the second quarter that beat expectations on Wall Street, helped by sales growth in e-commerce of nearly 50%.
Lululemon also increased its sales and profit outlook for its full year.
The earnings were the first for CEO Calvin McDonalds, who recently left LVMH’s Sephora to take the reins at Lulu. McDonald took the place of Laurent Potdevin who earlier in 2018 resigned after coming up short of the standards of conduct policy at Lululemon, said the company at that time.
McDonald, during a call with investors and analysts, said the company would continue growing its outerwear category and men’s business. The push Lululemon made into men’s has been looked at as a potentially huge growth driver for the company moving ahead.
For its female shoppers, the company shifted toward athleisure apparel across the U.S. and maintained a loyal customer base for its yoga gear and leggings.
Strong traffic continues to be seen at Lululemon stores across the U.S., which is a market where Nike as well as Under Armour have struggled to maintain growth, hurt by Sports Authority and other sports gear wholesalers filing bankruptcy in the U.S.
The expansion strategy of Lululemon is aggressive as it looks to go global with its brand, with great emphasis in China.
Net income at Lululemon for its quarter through July 29 reached $95.8 million equal to 71 cents a share in comparison to $48.7 million equal to 36 cents a share for the same period one year ago.
Excluding one-off items, Lululemon’s earnings per share were 71 cents, while Wall Street was expecting 49 cents.
Revenue jumped from $581 million one year ago to $723.5 million and was far ahead of analyst projections of $669 million.
Same store sales for Lululemon, those sales at stores open a minimum of 12 months increased an amazing 20% for the quarter. Analysts were forecasting growth of same stores sales of 9.6%.
The stronger categories for the company included women’s and men’s pants, in part due to its new fabrics that encourage buyers to wear the clothes to work, to the gym and even out to eat.
Accessories sales, for merchandise such as gym bags and water bottles, were stronger than any quarter the past five years.