Lululemon Athletica (LULU 72.70, +5.04) has spiked 7.4% after beating expectations and issuing above-consensus guidance. While the apparel stock has enjoyed a sharply higher start to the session, today's move has only helped the stock turn positive for the year after a rough first half of 2017.
The company reported above-consensus third quarter earnings of $0.56 per share on a 13.7% year-over-year increase in revenue to $619 million, which also exceeded estimates.
Comparable sales rose 8.0%, mostly thanks to a 26.0% jump in direct to consumer net revenue. Comparable store sales increased 2.0%. Gross margin improved to 52.2% from 51.1% one year ago.
In addition to reporting results, the company announced that its Board of Directors approved a new buyback program that authorizes the repurchase of up to $200 million of its stock.
Lululemon closed 50 stores during the third quarter, lowering its total store count to 388. The company's store count at the end of the quarter was little changed year-over-year.
Looking ahead, lululemon expects that fourth quarter earnings will be between $1.19 per share and $1.22 per share on revenue between $870 million and $895 million. The company's guidance range is ahead of current market expectations. For the full year, the company expects to report earnings between $2.45 per share and $2.48 per share on revenue between $2.59 billion and $2.61 billion.