• Q2 profit jumped 76% to $38.4m
  • Net revenue rose 39% to $212.3m
  • 20% jump in comparable store sales 

Yoga-wear retailer Lululemon Athletica Inc has reported a surge in second quarter profit and revenues, but warned sales are likely to slow in the third quarter and margins will come under pressure from higher sourcing costs.

The outlook came as the company booked a 76% hike in net income for the three months to 31 July, rising to $38.4m or $0.26 per share from $21.8m or $0.15 per share in the same period last year.

Revenue rose 39.5% to $212.3m from $152.2m a year ago, driven by a 20% jump in comparable store sales and the addition of 18 new company-owned stores in North America and 3 stores in Australia. A near doubling of direct-to-consumer sales to $18.6m, and a stronger Canadian and Australian dollar, also boosted the result.

Gross profit increased 52% to $122.1m, and climbed to 57.5% of net revenue from 52.8% a year ago.

Christine Day, Lululemon's CEO, said: "We are confident that we are well positioned to manage successfully through the current economic environment while sensibly pursuing our future opportunities."

But chief financial officer John Currie told analysts on a conference call that: "We expect slight gross margin compression versus the third quarter of 2010 driven by higher product cost from sourcing pressures in both labour and raw materials.

"We've made the strategic decision not to pass on higher product cost to the guests through higher pricing."

The company sees third-quarter same-store sales rising in the low to mid-teens percentage range, giving revenues of $225m to $230m and earnings per share of $0.22 to $0.24.

For the full year, revenue is forecast in the range of $930m to $950m and earnings in the range of $1.10 to $1.14 per share.