Lululemon shares clambered up on Thursday from the depths they hit in late March after it projected weak sales in the first quarter.
But the gains still weren’t enough to make up for those losses.
Company shares climbed by about 17 per cent to hit US$56.50 on Thursday, the same day it released first-quarter earnings that showed net revenue at $520.3-million, for a year-over-year increase of five per cent.
Meanwhile, total comparable sales fell by one per cent, while comparable store sales dropped by two per cent in the same time frame. The company’s profit dropped from $45.3-million to $31.2-million.
But earnings per share beat Wall Street estimates, according to The Associated Press. They hit 32 cents per share, when analysts only expected it to be 28 cents.
READ MORE: Lululemon shares dive by almost 25 per cent
“I’m excited to see the positive trends that materialized late in Q1 continuing into Q2,” Lululemon CEO Laurent Potdevin said in an earnings report.
“Our current outlook for the remainder of 2017 is strong, and I’m energized by the growth strategies taking shape.”
The news came as Lululemon announced plans to turn Ivivva, an athleisure brand targeting girls, into a “primarily e-commerce business.”
The change will involve closing 40 of its 55 Ivivva-branded locations and turn half of the remaining ones into Lululemon stores.
Lululemon expects those changes to cost between $55-million and $60-million in pre-tax expenses. This largely relates to costs such as lease terminations.
The earnings provided better news that Lululemon reported in March, with its fourth-quarter and 2016 fiscal earnings.
Back then, Potdevin said that the company had seen a “slower start” to its first quarter, which he blamed on a lack of “depth and colour” in its offerings for the spring.
He promised that customers would see more colour in certain styles within a week.
READ MORE: Strong holiday sales give Lululemon a boost in 4th quarter
Company shares subsequently fell from $66.30 to $50.76 in one day.
And though Lululemon stock gained value on the latest earnings, it still wasn’t enough to bring it back to the levels it saw in March.
The company expects to see net revenue of approximately $2.53- to $2.58-billion for fiscal 2017.
That would represent an increase from 2016 net revenue of $2.3-billion.
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