Lululemon Athletica Inc. in an SEC filing registered to sell 18.2 million shares in its initial public offering at projected prices between $10 and $12. The number of shares to be sold and the pricing range were not included in a previous filing. The Vancouver-based 
yoga retailer is selling 2.3 million shares. A group of stockholders, including private equity investors Advent International Corp. and Highland Capital Partners, are offering 15.9 million shares in the offering, which will reap about $175 million or $126 million after underwriting expenses.
At the midpoint of its pricing range, Lululemon will raise approximately $25.3 million and net $18.2 million after underwriting costs. Lululemon intends to use the proceeds, together with cash flow from operations, to fund new store openings and working capital. It expects to open 20 to 25 stores this year and 30 to 35 in 2008 in the U.S. and Canada. It currently has 15 in the U.S.
At the midpoint of its pricing range, underwriters value the rapidly-expanding chain at $828 million. After the offering, 75.3 million shares will be outstanding.
Lululemon Athletica also reported that Q1 revenue increased 58.9% to $44.8 million from $28.2 million. Sales from corporate-owned stores jumped 71.6% to $38 million; comparable store sales increased 20%. New stores contributed $9.5 million, or 59.9%, of the increase. Franchise revenues increased 12.7% to $4.9 million while other including wholesale and direct marketing – gained 11.4% to $1.9 million.
Gross margins slid 60 basis points to 50.9%, primarily due to an increase in occupancy costs in new markets and higher depreciation costs. SG&A expenses increased to 35.6% from 29.8% due to hiring of additional employees to support its growth as well as additional store employee compensation related to new stores. Net income increased 11.3% to $3.5 million from $3.2 million.
