Lululemon Corp. reported that net revenue increased 58.9% to $44.8 million for the fiscal first quarter ended April 30, compared to $28.2 million for the first quarter of fiscal 2006. LULU said the increase was the result of increased comparable store sales, sales from new stores opened in fiscal 2006 and the first quarter of fiscal 2007, and higher sales at franchise stores. Assuming the average exchange rate between the Canadian and United States dollars for the first quarter of fiscal 2006 remained constant, net revenue would have increased 59.6% for the first quarter of fiscal 2007.

Net revenue from corporate-owned stores segment increased 71.6% to $38.0 million for the first quarter of fiscal 2007 from $22.1 million for the first quarter of fiscal 2006. Comparable store sales increased 20% for the period. New stores opened during fiscal 2006 and not in the comp sales mix contributed 59.9%, of the total sales increase. The acquisition of three Calgary franchise stores on April 1, 2007 contributed 10.5% of the total sales increase.

The increase in comparable store sales was said to be driven primarily by the strength of “existing product lines, successful introduction of new products and increasing recognition of the lululemon athletica brand name.”

During the first quarter of fiscal 2007, Lululemon opened three corporate-owned stores, consisting of one in Canada, one in the United States and one in Japan.

Net revenue from the franchises segment increased 12.7% to $4.9 million for the first quarter of fiscal 2007 from $4.4 million for the first quarter of fiscal 2006.


Net revenue from the company’s “other” segment increased 11.4% to $1.9 million for the first quarter of fiscal 2007 from $1.7 million in the year-ago period.


Gross margin was up 50 basis points to 49.0% of sales in the first quarter. SG&A expenses increased 580 basis points to 35.6% of sales for the first quarter, compared to 29.8% of slaes in the year-ago quarter.

Net income increased 11.3% to $3.5 million for the first quarter of fiscal 2007 from $3.2 million for the first quarter of fiscal 2006.