Lululemon third-quarter profit shrinks 12%, full-year estimates revised lower

VANCOUVER – Lululemon Athletica Inc. says its third quarter net income fell by 12 per cent to US$53.2 million and the clothing retailer has lowered its revenue and profit expectations for its current financial year.

The Vancouver-based company, which reports its results in U.S. currency, says overhead expenses and the cost of goods sold rose faster than revenue, which was up 14.4 per cent to US$479.7 million from $419.4 million last year.

Lululemon’s cost of goods rose 22.4 per cent compared with last year’s third quarter to $254.9 million while selling, general and administration expenses rose 20.5 per cent to $156.6 million.

Its profit for the quarter ended Nov. 1 amounted to 38 cents per share, down from 42 cents per share a year earlier. Excluding favourable tax-related items, Lululemon’s proft would have been 35 cents per share.

The company say its full-year revenue estimate has been lowered to between $2.025 billion and $2.040 billion, which reduced the top end of the range by $15 million.

Lululemon is also lowering its full-year earnings estimate to between $1.81 and $1.84 per share, including the favourble tax items, compared with the previous estimate of between $1.87 and $1.92 per share.