Lululemon China Is Well Received. Hangzhou Tower Opens Business And Records A Record.

Lululemon Athletica Inc. (NASDAQ:LULU) Lulu lemon has been less than Wall Street analysts expected for the current holiday season's sales and profit guidance. After a record high of $235.5 on Wednesday, the North American high-end sportswear retailer recorded its biggest intraday drop on Thursday, which was 6.4% at the end of Thursday.

Lululemon Athletica Inc. Lulu lemon expects the fourth quarter adjusted EPS will be in the range of 2.10-2.13 US dollars, while the market expectation is US $2.13, comparable sales growth is expected to slow down to 11%-13%. Analysts are still optimistic about the group's share price surged by 84.6% this year, and pointed out that the performance outlook is "conservative".

Jim Duffy, a Stifel analyst at investment bank, explained to customers that the higher market expectations did not take into account one week of holiday season last year, and that Thanksgiving and Christmas were six days shorter than last year. In the three quarter, comparable sales increased by 17% over the year after the exchange rate was cut off, which was better than the market forecast of 14.4%. Sales of entities in the same store and DTC (directly to consumers) recorded 11% and 30% strong growth respectively, without any signs of slowing down.

Net income rose 22.5% to $916 million 100 thousand compared to the same period, the market expected to be $899 million, and the proportion of DTC revenue increased to 26.9%. North America's domestic revenue soared by 21%, and the international market increased by 35%. CEO Calvin McDonald focused on China's business when he reviewed the international market at the analysts' conference call.

China is the main driving force for the group to achieve the goal of three times international income growth before 2023. Calvin McDonald pointed out that in recent inspections of the Yangtze River Delta business, not only did the inherent stores continue to flourish, but also the second tier cities also showed significant opportunities. He disclosed that the turnover of Hangzhou Tower's first store opened in Hangzhou on the same day, and the sales situation has been maintained so far.

He mentioned in particular that the situation in Hongkong had a "slight effect" on the overall business of the group, and that other Asian Pacific markets were enough to offset the local recession. With Lululemon's brand strength and popularity increasing in China, the group plans to double the number of stores this year.

China's digital sales increased by more than 60% in the three quarter. Calvin McDonald told analysts that the holiday season continued its strong momentum in the three quarter. The sales records of Thanksgiving weekend, "network Monday" and "double 11" were broken one by one.

He revealed that the brand sold the whole day's sales in the sixty-ninth minutes of "double 11". They not only handled seasonal inventory through the promotional activities, but also achieved double-digit growth in full price sales and gained 3 million new customers.

Lululemon Athletica Inc. Lulu lemon three quarter net profit increased 33.4% to 126 million US dollars, EPS increased from last year's 0.71 US dollars to 0.96 US dollars. The adjusted EPS was $0.75, far less than the $0.93 expected by the market.

Gross margin increased by 70 basis points to 55.1%, product cost reduction, product mix improvement and sales promotion convergence contributed 120 basis points to gross margin, but product R & D investment and supply chain cost offset 40 of them.

Patrick Guido, chief financial officer, revealed that research and development focused on bras, coats and accessories. Analysts agreed with the direction of investment. Jane Hali & Associates analyst Jessica Ramirez pointed out that the group had to maintain the excitement of its products to continue to lead its competitors. The world's largest sportswear maker, Nike Inc. (NYSE:NKE) Nike group, launched the first yoga wear product line for the same brand this year.

Susquehanna Financial Group analyst Sam Poser thinks Lululemon Athletica Inc. Lulu lemon has been unmatched in the sportswear industry. Cowen analyst John Kernan praised the group's possession of the industry's best multi product product system. With excellent products and experience, the global sports textile industry and consumers have established unmatched links with competitors. MKM Partners management partner Roxanne Meyer believes that the combination of a series of strategies such as its landmark community activities, customer relationship management, unique brand ambassador team, weekly new frequency and men's clothing store can continue to drive passenger flow and conversion rate, and maintain a low growth rate of comparable sales 10%-20% in the visible future.

As of the end of the season, the group has 479 stores, a 53 increase over the same period last year. Calvin McDonald revealed that the click and pick up function has almost covered all North American stores, and 20% to store customers take extra consumption.

Lululemon Athletica Inc. (NASDAQ:LULU) closed at $224.47 on Thursday, down 3.7% throughout the day. Susquehanna, Cowen and MKM Partners raised the bid price to $260, $258 and $250 respectively, and gave a rating equivalent to "buy".