Canadian retailer Lululemon (LULU) has reported that its fiscal second-quarter profit rose 18% from a year earlier due largely to increased sales in China.
The Vancouver-based company, which specializes in athletic apparel, said that its fiscal Q2 revenue in China rose 61% year-over-year, driving its financial results higher.
Lululemon announced earnings per share (EPS) of $2.68 U.S. versus $2.54 U.S. that was expected on Wall Street.
Revenue in the quarter totaled $2.21 billion U.S. compared to a consensus forecast of $2.17 billion U.S. The company’s revenue was also up 18% year-over-year in the quarter.
The strong Q2 results led the company to revise up its full-year guidance.
The company now expects its sales to be between $9.51 billion U.S. and $9.57 billion U.S., compared to a previous range of $9.44 billion U.S. to $9.51 billion U.S.
Profits for the current fiscal year are expected to be between $12.02 U.S. and $12.17 U.S. per share, up from prior guidance of $11.74 U.S. to $11.94 U.S.
Lululemon executives said the company’s earnings are being fueled by strong international growth, with sales increasing 52% in markets outside of North America.
Company executives added that sales growth in China remains healthy despite the economy slowing in the nation of 1.4 billion people.
Lululemon currently has 107 stores in China and plans to open 35 more stores internationally during the current fiscal year, with most of the new locations based in Asia.
The company’s inventory rose 14% to $1.7 billion U.S. in fiscal Q2, compared with $1.5 billion U.S. a year ago.
Lululemon’s fiscal Q2 gross margin was in line with analyst expectations at 58.8%.
The stock of Lululemon has gained 30% in the last 12 months to trade at $381.26 U.S. per share.
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