Lululemon Athletica Inc. (NASDAQ:LULU) have shares raced higher after the yoga gear retailer reported first quarter earnings and revenue that exceeded expectations.
Shares jumped 12.84% to US$54.87 in early US trading.
Adjusted earnings per share was US$0.23 for the quarter ended 30 April, down from US$0.33 in the year-ago period but better than analysts’ estimates of US$0.28.
Net revenue rose to US$520.31mln from US$495.52mln, ahead of the forecast for US$513.69mln.
The company also announced it would close nearly all of its 55 loss-making Ivivva girls stores but will continue to sell the brand online.
The decision is part of the active wear group’s plans to boost online sales as more consumers turn to the internet to do their shopping.
Chief executive Laurent Potdevin said: “Our current outlook for the remainder of 2017 is strong, and I'm energised by the growth strategies taking shape. I'm also confident in our plans to restructure Ivivva and believe they are the best means to optimize this part of the business."
However, Lululemon cut its forecast for full year net revenue to US$2.53bn to US$2.58bn from a previous guided range US$2.55bnto US$2.6bn as the streamlining of Ivivva will affect sales in the short term.
Excluding the impact of restructuring, Lululemon expects full-year diluted EPS of US$2.28 to US$2.38, which is 2 US cents above the company's previous forecast.