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Lululemon Athletica Q4 Profit Rises; Guides Q1, 2012 EPS Below View

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3/22/2012 8:09 AM ET

Canadian yoga-inspired athletic apparel company Lululemon Athletica, Inc. (LULU: Quote, LLL.TO) reported Thursday a profit for the fourth quarter that increased from last year, reflecting lower expenses and a 51 percent revenue growth.

Both earnings per share and quarterly revenues surged and came in above analysts' expectations. The company also provided earnings and revenue forecast for the first quarter, and for the full-year 2012, with earnings for both periods being below Street view.

"Reaching a billion dollars in revenue is clearly an important milestone that as a company we can all be very proud of," CEO Christine Day said in a statement.

Net revenue for the the full-year 2011 increased 40.6 percent to the magic $1.0 billion mark from $711.7 million in fiscal 2010.

The Vancouver, Canada-based company posted net income of $73.52 million or $0.51 per share for the fourth quarter, higher than $54.77 million or $0.38 per share in the prior-year quarter.

On average, 22 analysts polled by Thomson Reuters expected earnings of $0.49 per share for the fourth quarter. Analysts' estimates typically exclude special items.

The earnings per share figures are presented on a post two-for-one stock split basis since July 8, 2011.

Net revenues for the quarter surged 51.4 percent to $371.5 million from $245.40 million in the same quarter last year, and topped twenty-one Wall Street analysts' consensus estimate of $362.42 million.

Comparable-store sales for the quarter grew 25 percent or 26 percent on a constant dollar basis, compared to 32 percent or 28 percent on a constant dollar, in the prior-year quarter.

Operating margins expanded 210 basis points to 31.2 percent, reflecting 410 basis points reduction in selling, general and administrative expenses as a percentage of revenues, more than offsetting gross margin contraction of 220 basis points.

Looking ahead to the first quarter fiscal 2012, Lululemon projects earnings in a range of $0.28 to $0.29 per share, on anticipated quarterly revenues between $265 million and $270 million, based on a comparable-store sales percentage increase in the low 20s on a constant-dollar basis.

Analysts expect the company to report earnings of $0.30 per share for the second quarter, on revenues of $257.46 million.

For fiscal 2012, the company anticipates earnings in the range of $1.50 to $1.57 per share, on projected annual revenues between $1.3 billion and $1.325 billion.

Street is currently looking for full-year 2012 earnings of $1.61 per share, on annual revenues of $1.31 billion.

LULU closed Wednesday's regular trading session at $74.07, up $0.58 on a volume of 2.24 million shares. LLL.TO closed on the Toronto Stock Exchange at C$73.51, up C$0.73 on a volume of 0.12 million shares.

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by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

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