Lululemon soars after beat-and-raise report defies retail sector trends
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Lululemon Athletica (NASDAQ:LULU) soared in Thursday after-hours trading after posting Q1 results that defied some of the sluggish earnings being turned by athletic apparel companies and mall chains. 
Comparable sales at stores were up 14% during the quarter or 17% on a constant-currency basis.
Total revenue was up 27% during the quarter on a constant dollar basis, led by a 60% jump in international markets and 17% gain in North America.
Direct to consumer revenue rose 16% year-over-year vs. +20.3% consensus. DTC revenue accounted for 42% of sales.
Gross margin was 57.5% of revenue vs. 53.9% a year ago and the consensus mark of 57%. Adjusted operating margin increased 400 basis points during the quarter to 20.1%.
LULU opened 7 net new company-operated stores during the quarter to end with a store count of 662.
CFO Meghan Frank: "Our Q1 results were strong as guests responded well to our product offering in all our markets across the globe. A meaningful acceleration in our China sales trend, coupled with lower air freight, contributed to our better than planned financial performance. We are pleased with our momentum heading into the second quarter and for the full year as reflected in our revised outlook for FY23."
The company ended the quarter with its inventory position up 24% Y/Y to $1.6B.
For 2023, the company expects revenue to be in the range of $9.44B to $9.51B vs. $9.36B consensus. EPS is expected to fall in the range of $11.74 to $11.94 for the year vs. $11.60 consensus.
Shares of Lululemon (LULU) shot up 11.31% in after-hours trading to cut into recent gains. The athletic apparel stock has been on a downswing since Foot Locker's earnings report rattled the retail sector. Nike (NKE) rose 1.45% and Under Armour (UAA) gained 0.85% following the LULU print.
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