Lululemon: Shareholders Cheer Q3 Results and David Einhorn Absence

A better-than-expected third quarter was enough to push Lululemon Athletica (NASDAQ:LULU) shares higher, despite a cautious stance on the current quarter. The absence of a well-known hedge fund manager also provided a lift.

How Good Are the Results?

On Thursday, the Canadian-based yoga wear maker reported financial results for the thirteen weeks ended October 28. Net income rose to $57.3 million (39 cents per share), compared to $38.8 million (27 cents per share) a year earlier. Net revenue jumped 37 percent to $316.5 million, compared to $230.2 million last year. On average, Wall Street was expecting earnings of 37 percents per share on revenue of $305.3 million.

Comparable store sales for the period increased 18 percent on a constant dollar basis, while direct to consumer revenue surged 89 percent to $45.1 million, or 14.3 percent of total revenues. Gross profit margin came in at 55.4 percent, a slight decrease from 55.8 in the third quarter of 2011.

“I am very proud of the team for achieving yet another strong quarter coming in ahead of our expectations. Our stellar results were driven by first-rate execution, strong community engagement, beautiful product and continued strength in our e-commerce business,” explained Christine Day, chief executive officer of Lululemon.

What is the Outlook?

For the fourth quarter, Lululemon expects to earn 71 cents to 73 cents per share, with revenue between $475 million and $480 million. Analysts had forecast 75 cents per share with revenue of $490.5 million. The company expects full year earnings of $1.81 to $1.83 per share, inline with estimates.

Investors were also pleased to hear this hedge fund manager is missing in action…

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