Lululemon Athletica said its first quarter profit more than doubled, but slightly lowered its forecast for the the year due to incremental hires and other strategic initiatives. Earnings for the 13-week period, ended May 4, rose to $8.48 million, or 12 cents a share, from $3.54 million, or 5 cents, last year. Revenue climbed 75% to $78.2 million. Same-store sales rose 28%. Adjusted to exclude the impact of a robust Canadian dollar, they gained 15%.


In the quarter, gross margins increased 260 basis points to 53.1% from 50.5%. Income from operations rose 72% to $11.7 million from $6.8 million.


Robert Meers, Lululemon’s CEO stated: “We are pleased with the continued momentum of our business through the first quarter despite the overall consumer environment. The investments into our systems and people position us well to gain market share as we continue to expand our store base in the United States and migrate into ecommerce next year.”


Meers continued: “For me, it is gratifying to know that an extremely strong foundation is in place at lululemon, and a talented new CEO will be leading the organization into the future starting this second quarter.”


Regarding its guidance, the company said that based on the results from our first fiscal quarter and our outlook for the balance of the year, the Company now expects diluted earnings per share for fiscal 2008 to be 68 to 71 cents a share versus previous guidance of 70 to 72 cents.


Lululemon said its forecast continues to be based on anticipated comparable store sales growth of low teens; or high single digits on a constant dollar basis, and 35 planned new store openings in North America. Due to strong sales at new stores not in the comp base, coupled with an earlier than anticipated new store opening calendar for this year, it are raising revenue guidance to between $380 million and $385 million versus previous guidance of $370 million to $375 million. The lower earnings outlook is primarily a result of incremental hires and other strategic initiatives.


The company expects an effective tax rate in the low 30% range for the full year and anticipates diluted weighted average shares outstanding of 71.7 million for 2008. Fiscal 2008 earnings guidance includes a charge of approximately $0.02 per share resulting from the company’s planned closure of its four stores currently operating in Japan.


The company’s long-term growth targets continue to be net revenue growth of approximately 25% and diluted EPS growth in excess of 25%.