Lululemon Athletica Guidance Below Estimates

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By J Maslow

Lululemon Athletica (LULU) Thursday reported diluted fiscal Q3 EPS of $0.42, off 6.7% YOY, but above a street consensus of $0.38 compiled by Capital IQ. The yoga-inspired seller of athletic apparel reported Q3 ended Nov. 2 net income of $60.5 million on net revenues of $419.4 million, the latter figure below the street consensus of $424.6 million.

LULU suffered from a 3% drop in some-store sales in fiscal Q3, but more than made up for it by a 16.3% boost in Q3 direct-to-consumer sales, to $77.2 million. In total, LULU Q3 net revenues rose 10% YOY. LULU, with a current market cap of $6.82 billion, reported it repurchased $72.9 million, or 1.8 million shares of LULU in Q3, at average $40.49 per share.

In guidance, LULU projected fiscal Q4 net revenues of $570 million to $585 million, about $15 million below previous guidance, due to port delays and slow store openings, said LULU. Diluted Q4 EPS is expected at $0.65 to $0.69. The Street view is $594.7 million in Q4 revenue and earnings of $0.72 per share.

For FY 2014, the company is targeting revenue of $1.765 to $1.780 billion and earnings of $1.74 to $1.78 per share. The Street is at $1.794 billion in revenue and earnings of $1.77 per share. LULU slated a conference call-webcast for 9 am ET, Thursday Dec. 11.

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