Canadian athletic-wear company Lululemon Athletica Inc. (NASDAQ:$LULU) had a rather successful month of June. According to S&P Global Market Intelligence, Lululemon’s shares went up 23.6% in June after it reported strong 1Q results. The up in shares also followed acquisition rumors.
Lululemon started strong earlier in June, its stock increasing almost 13% on June 2, 2012 after it made its earnings report. The report showed that quarterly revenue has increased by 5% year over year to reach about $520.3 million. As well, adjusted net income saw a rise of 8.3% to reach $44.3 million, or $0.32 per share. The report exceeded the expectations of many — investors had projected a revenue of $514 million and adjusted net income of $0.28 per share.
In addition to a strong earnings report, Lululemon also announced plans of revamping ivivva, its athletic-wear-for-kids business, with the goal of making it a primarily online brand. The plan involves Lululemon closing about 40 of its 55 ivivva stores and showrooms and converting about 7 or 8 of the remaining 15 ivivva stores to Lululemon stores. Moving ivivva online is a smart move for the company as the e-commerce industry is now posing a greater threat to many retail companies.
Due to its plans to shut down ivivva stores, Lululemon have readjusted its 2017 full-year revenue to be between around $2.53 billion and $2.58 billion, a decrease from the previous estimation of around $2.55 billion to $2.6 billion. However, investors shouldn’t be too worried, as the company have also readjusted its 2017 full-year earnings per share to be around $2.28 to $2.38, an increase from the previous estimation of around $2.26 to $2.36.
Lululemon’s shares have continued to increase into late June with rumors of Lululemon becoming a privately-held company surfacing. According to an analyst reporting to TheStreet, the purchase would be based on the price of between $70 and $85 per share. It is not a bad deal as Lululemon closed at around $60 per share on Monday evening on July 3, 2017. However, this is just speculation and Lululemon has been the subject of several similar rumors before with no such deals in sight.
Investors of Lululemon should be quite pleased as the company continues to grow in July, if the first quarter report of 2017 can be kept up.
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