TheChek News Flow

Reports Q1 (Apr) earnings of $0.34 per share, excluding non-recurring items, $0.02 better than the Capital IQ Consensus Estimate of $0.32; revenues rose 11.2% year/year to $384.6 mln vs the $381.29 mln consensus.

• Q1 results excluded a $0.21 per share impact from the planned repatriation of foreign earnings.
  

Comps/margins:

• Total comparable sales on a combined basis increased 1% for the first quarter on a constant dollar basis vs flat prior guidance and +0.2% estimate
• • Comparable corporate-store sales for the first quarter decreased by 4% on a constant dollar basis and direct to consumer revenue increased 25% on a constant dollar basis.
• Direct to consumer revenue increased to $66.0 million, or 17.2% of total Company revenues, in the first quarter of fiscal 2014, an increase from 15.6% of total Company revenues in the first quarter of fiscal 2013.
  
• Gross profit for the quarter increased 15% to $195.7 million, and as a percentage of net revenue gross profit increased to 50.9% for the quarter from 49.4% in the first quarter of fiscal 2013. Gross profit for the first quarter of fiscal 2013 included a provision of $17.5 million related to the pull-back of black Luon pants.
  
• • This compares to 50-51% prior guidance and ~50.4% estimate

Stock repurchase
Additionally, co board of directors has approved a stock repurchase program to buy back up to $450 mln of its common shares in the open market at prevailing market prices.

Guidance:
Q2 - Co issues downside guidance for Q2, sees EPS of $0.28-0.30, excluding non-recurring items, vs. $0.36 Capital IQ Consensus Estimate; sees Q2 revs of $375-380 mln vs. $387.19 mln Capital IQ Consensus Estimate.

• Q2 Comps - Co sees total combined comparable sales decrease in the low to mid single digits vs 1.5% estimate

FY - Co lowers guidance for FY15, sees EPS of $1.71-1.76, excluding non-recurring items, vs. $1.89 Capital IQ Consensus Estimate; sees FY15 revs of $1.77-1.80 bln vs. $1.8 bln Capital IQ Consensus Estimate. This compares to co's prior guidance of EPS of $1.80-1.90 and revs of $1.77-1.82 bln, respectively

• FY Comps - Co sees total combined comparable sales increase in the low single digits vs +low to mid single digits prior guidance and +3% estimate

Briefing note: The guidance does not reflect the potential repurchase of shares.

CFO to retire
Lastly, Co announces that announced that CFO John Currie has notified the company of his intent to retire by the end of the fiscal year.

• lululemon will engage a leading executive search firm to initiate an open and comprehensive search for Currie's replacement to allow for a smooth transition.