Lululemon Athletica (LULU) 1Q16 Results: Inventory More Aligned with Sales than in Prior Quarters, but Outlook Is Muted

Executive Summary

• Lululemon Athletica reported adjusted 1Q16 EPS of $0.30 versus the consensus estimate of $0.31.
• Total revenue was $495.5 million versus consensus of $487.6 million. Comps increased by 8% on a constant-currency basis versus consensus of 6.3%. Store-only comps were up 5% versus consensus of 2.8%.
• Full-year EPS is expected to be $2.05–$2.15, consistent with prior guidance and compared to consensus of $2.15. Total revenue is now expected to be $2.305–$2.345 billion, up from $2.285–$2.335 billion previously and versus consensus of $2.34 billion. Comps are expected to be up in the mid-single-digit range on a constant-dollar basis.