Lululemon Athletica Inc. (NASDAQ: LULU) got pasted on Thursday morning stock markets, after it reported better-than-expected earnings for its third quarter, but issued soft earnings guidance for the fourth quarter.
The Vancouver-based Lululemon revealed Q3 net revenue was $916.1 million, an increase of 23% compared to the third quarter of fiscal 2018. On a constant dollar basis, net revenue increased 23%.
Total comparable sales increased 16%, or increased 17% on a constant dollar basis. Direct to consumer net revenue increased 29%, or increased 30% on a constant dollar basis.
Gross profit was $505.0 million, an increase of 24% compared to the third quarter of fiscal 2018. Income from operations was $175.8 million, an increase of 29% compared to the third quarter of fiscal 2018.
LULU also said it ended the third quarter of fiscal 2019 with $586.2 million in cash and cash equivalents compared to $703.6 million at the end of the third quarter of fiscal 2018. Inventories at the end of the third quarter of fiscal 2019 increased 26% to $627.1 million compared to $496.0 million at the end of the third quarter of fiscal 2018.
The Company ended the quarter with 479 stores.
CEO Calvin McDonald commented: "We're proud of the continued momentum in our business as we live into our vision to be an experiential brand."
Lululemon shares took a pounding of $10.21, or 4.4%, to $222.98.
