Lululemon sees income decline in Q1 FY16

London - Canada sportswear retailer Lululemon Athletica reported a 15 percent decline in income from operations for the first quarter of fiscal 2016, which ended May 1, 2016. Net income for the quarter dropped from 68 million US dollars to 57.6 million US dollars and adjusted earning per a share reached 30 cents.

However, investors decided to focus on the sales increased reported during the first quarter. Net revenue increased by 17 percent to 495.5 million US, up from 423.5 million US dollars in the first quarter of fiscal 2015. Total comparable sales, which includes comparable store sales and direct to consumer, increased by 6 percent, as comparable store sales increased by 3 percent for the quarter ended May 1, 2016.

"We are pleased with our first quarter performance, delivering strong sales results and gross margin that exceeded expectations," said Laurent Potdevin, L ululemon's CEO, in a press statement. "We finished the quarter with our inventory levels rebalanced and on track to achieve our goals for the year." Lululemon's inventory levels decreased 3 percent per square foot during the first quarter of FY16.

Gross profit grew by 16 percent to 239.1 million US dollars, and as a percentage of net revenue gross profit was 48.3 percent compared to 48.6 percent in the first quarter of fiscal 2015. Lululemon ended its first quarter of FY16 with 550.0 million US dollars in cash and cash equivalents compared to 655.9 million US dollars at the end of the first quarter of FY15. The sportswear retailer opened 11 stores during the quarter and closed one.

"I'm extremely proud of our teams who have relentlessly built the capabilities and infrastructure necessary to support profitable growth," continued Potdevin. "By continuing to invest in our people and focus on product innovation, we are well on our way to deliver on our five year plan."

Photos: Lululemon, Facebook