Lululemon Athletica Inc. reported revenue jumped 55.8% in the second quater, to $152.2 million from
$97.7 million in the year-ago period. Comparable-store sales increased by 31% on a constant-dollar basis. Profits more than doubled to $21.8 million, or 30 cents a share, compared to $15.8 million, or 13 cents a year ago.

Net revenue from
corporate-owned stores in the quarter was $129.4 million for the quarter, an increase
of 52.1% from $85.1 million in the second quarter of fiscal 2009.

Gross profit for the quarter increased by 77.8% to $80.3 million, and
as a percentage of net revenue gross profit increased to 52.8% for the
quarter from 46.2% in the second quarter of fiscal 2009.

Income from operations for the quarter increased 138.9% to $34.2
million, and as a percentage of net revenue was 22.5% compared to
14.7% of net revenue in the second quarter of fiscal 2009.

The tax rate for the quarter was 40.3% versus 35.6% a year ago. The
tax rate has been increased to take into account the additional future
income tax liability which could arise on repatriation of excess
unremitted earnings of the Canadian operating subsidiary.

For the twenty-six weeks ended August 1, 2010:

  • Net revenue for the first two quarters increased 61.9% to $290.5
    million from $179.4 million in the same period of fiscal 2009. Net
    revenue from corporate-owned stores was $245.0 million for the first
    two quarters of fiscal 2010, an increase of 55.1% from $158.0 million
    in the first two quarters of fiscal 2009. Year to date
    comparable-store sales increased by 33% on a constant-dollar basis.
  • Gross profit for the first two quarters increased by 92.9% to $154.7
    million from $80.2 million in the same period of fiscal 2009. As a
    percentage of net revenue, gross profit increased to 53.2% for the
    first two quarters of fiscal 2010 from 44.7% in the same period of
    fiscal 2009.
  • Income from operations for the first two quarters increased by 175.9%
    to $66.7 million, and as a percentage of net revenue was 23.0%
    compared to 13.5% of net revenue in the same period of fiscal 2009.
  • The tax rate for the first two quarters of fiscal 2010 was 40.1%
    versus 35.1% for the same period in the prior year. The tax rate has
    been increased to take into account the additional future income tax
    liability which could arise on repatriation of excess unremitted
    earnings of the Canadian operating subsidiary.

The company ended the second quarter of fiscal 2010 with $178.2 million
in cash and cash equivalents compared to $83.8 million at the end of the
second quarter of fiscal 2009. Inventory at the end of the second
quarter of fiscal 2010 totaled $66.5 million compared to $46.5 million
at the end of the second quarter of fiscal 2009. The company ended the
quarter with 130 stores in North America and Australia.

Christine Day, Lululemon's CEO stated: “Our strong sales momentum
reflects increased brand awareness driven by the strength of our product
innovation, guest experience and community engagement. We achieved
$1,532 in sales per square foot for the second quarter driven by the
exceptional performance of our newest stores. We are intently focused on
our existing growth strategies which include fueling our rapidly growing
e-commerce business and leveraging our showrooms into 20 to 25 store
openings in 2011.”

Updated Outlook

For the third quarter of fiscal 2010, Lululemon expect net revenue to be in the
range of $155 million to $160 million based on a comparable-store sales
percentage increase in the high-teens on a constant-dollar basis.
Diluted earnings per share are expected to be in the range of 22 cents to 24 cents for the quarter. This assumes 72.5 million diluted
weighted-average shares outstanding.

For the full fiscal 2010, Lululemon now expect net revenue to be in the range
of $645 million to $650 million and diluted earnings per share are
expected to be in the range of $1.18 to $1.22 for the full year. This
assumes 72.3 million diluted weighted-average shares outstanding.

Consistent with the adjustment to the tax rate in the first quarter of
fiscal 2010 the updated outlook assumes a tax rate of 40% for fiscal
2010.