• Q3 earnings rise 28.6% to reach CAD68.3m (US$51.6m)
  • Gross margin widens to 51.1%
  • Net revenues grow 13% to $544.4m from $479.7m?
“Our third-quarter results demonstrated strong execution across all areas of our business"

“Our third-quarter results demonstrated strong execution across all areas of our business"

Canadian yoga wear brand Lululemon Athletica picked up the pace in its third-quarter with solid sales and earnings increases thanks to gross margin gains and improved productivity.

Earnings amounted to $68.3m, a rise of 28.6% on the $53.1m reported a year earlier. Gross margin widened to 51.1% compared to 46.9% in the third quarter of fiscal 2015.

Net revenues increased 13% to $544.4m from $479.7m last year, while total comparable sales were up 7%. Comparable store sales, meanwhile, increased 4%.

"Our third-quarter results demonstrated strong execution across all areas of our business as we delivered continued top-line momentum, outperformed in gross margin and inflected meaningfully in EPS," said CEO Laurent Potdevin. "This success is a result of our team's ongoing effort and commitment to delivering on our long term strategies.

"As we entered the fourth quarter, we experienced mixed sales results that have since improved. I am confident we will continue to deliver an unparalleled guest experience across all our channels and regions around the globe."

For the full year, Lululemon is expecting net revenues in the range of $2.32bn to $2.34bn based on total comparable sales in the mid-single digits on a constant dollar basis. Diluted earnings per share are expected to be in the range of $2.18 to $2.23.

"It is fortunate for Lululemon that a growing number of consumers are showing an interest in active and healthy lifestyles," notes Neil Saunders, CEO of retail analyst Conlumino. "However, given the highly competitive state of the sportswear and athleisure market, even in these favourable conditions success is far from guaranteed.

"But while the competitive environment remains challenging, Lululemon looks set to end the year firmly on the front foot."