Lululemon Athletica Inc. just reassured investors that the athletic apparel trend isn’t dead.
Shares of the retailer surged in late trading after the company posted second-quarter profit and sales that topped analysts’ estimates. Lululemon also delivered a forecast for the year that beat projections.
The results are a bright spot following disappointing quarterly reports from sporting-goods companies like Finish Line Inc., which stoked investor fears that the athletic industry is flagging. Lululemon Chief Executive Officer Laurent Potdevin is working to diversify the yogawear maker’s offerings in a crowded marketplace. He’s appealing to men, expanding internationally and adding more technical innovation to the clothing.
“The acceleration that we have seen across the business in the second quarter enables us to take another positive step on our path towards achieving $4 billion in revenue by 2020,” Potdevin said in a statement.
The stock rose as much as 8.5 percent to $62.45 in late trading in New York. It had fallen 11 percent this year through Thursday’s close.
Comparable-store sales including e-commerce, a closely watched metric, rose 7 percent in the quarter — more than the 4 percent increase forecast by analysts, according to Consensus Metrix.
Excluding some items, second-quarter profit was 39 cents a share. That topped the 35 cents projected by analysts.
To focus on its core operations, Lululemon said in June it will restructure its kids business, Ivivva. The company plans to close 40 of its 55 Ivivva shops and convert half of the rest to Lululemon-branded stores, making the kids line primarily e-commerce focused.
Sales in the quarter increased 13 percent to $581.1 million, compared with the $567.1 million analysts predicted. The retailer boosted its full fiscal-year revenue forecast to between $2.55 billion and $2.6 billion from a range of $2.53 billion to $2.58 billion previously.
Lululemon said full-year profit, excluding some items, will be $2.35 to $2.42 a share. That topped analysts’ projections.