The pool of candidates to lead Lululemon Athletica Inc. is set — and whoever wins is going to come in as chief executive officer with plenty of momentum.
The company, which is being led by executive chairman Glenn Murphy since Laurent Potdevin resigned amid questions about his personal conduct in February, showed very strong growth on both the top and bottom lines during the first quarter.
Net income jumped 141 percent to $75.2 million, or 55 cents a share, from $31.2 million, or 23 cents, a year earlier. Earnings per share came in 9 cents ahead of the 46 cents analysts projected.
Revenues for the quarter ended April 29 increased 24.9 percent to $649.7 million from $520.3 million. Comparable sales increased 20 percent, with an 8 percent rise in stores and a 62 percent online.
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For the full year, the company boosted its earnings guidance to a range of $3.10 to $3.18 a share, up from the $3 to $3.08 projected in March. Investors liked what they saw and pushed shares of the company up 6.4 percent to $111.75 in after-hours trading Thursday.
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Murphy told analysts on a conference call that the company has met with a number of ceo candidates who are qualified and interested and that the board would meet next week.
“At that time, we will be discussing the candidates who have come forward and really getting an agreement on how do we take this to the next level,” Murphy said.
The executive chairman noted that even though the first quarter was up against a relatively easy year-ago comparison, the business’ key indicators were all very positive.
“We know we’re operating inside of a good global consumer economy, and the athletic sector continues to benefit from really strong macro trends,” he said. “This is not the ath-leisure trend, which is a trend inside of the larger macro trend…which is health and wellness. Even…with that as a backdrop, the last three quarters have been a stepped-up performance for Lululemon when it comes to market share gains. That’s market share gains in our stores and in e-commerce.”
And a lot of those market share gains can be attributed to product.
According to Sun Choe, senior vice president for merchandising, the seamless category continues to do well across men’s and women’s, as well as the bottoms business, also for men’s and women’s.
She spoke about what’s new in a business that the company internally refers to as “office, travel and commute.” The idea for the line was from a pant for men that Choe said was ideal for the “active” category. The pant included a gusset technology that made it more comfortable to bike to work.
“There’s a big demand for the end use and how people try to get more steps in every day,” Choe said. “There’s a really nice role that Lululemon can play in, creating something that’s functional that you can wear to work.”
While the product line has a larger assortment for men’s, the company is seeing an end use for women. One option is on the fly pant, in which the company has leveraged a luxury fabric that contains four-way stretch. The idea of more comfortable fabrications arises from just watching how people live their lives today and commute to work. “How people work today is different from five to 10 years ago. Between a casual workplace, working from home and WeWork offices, all that is changing how we go to work. I see loads of people on their bikes and walking to work. [We are working on looks] that are most comfortable — where we win is our fabric innovation.”
Lululemon wasn’t the only brand this week to deliver reassuring signs that apparel retailing can still be profitable. PVH Corp. also saw strong growth with big gains from its Tommy Hilfiger and Calvin Klein brands.