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lululemon, Restoration Hardware Beat Q1 Estimates

Zacks

lululemon athletica LULU reported earnings Wednesday afternoon for its fiscal Q1 of 74 cents per share, 3 cents better than the Zacks consensus. Revenues came in well above estimates: $782 million depicts 20% growth year over year, and is well beyond the $757 million we had expected. Comps in the quarter were up a robust 14%, partially due to 33% growth in direct-to-consumer sales.

Further, gross margins rose 80 basis points year over year to 53.9% in the quarter. This marks the ninth straight earnings report LULU has posted a positive earnings surprise, with the trailing 4-quarter average around +20%.

Guidance was a tad lighter than anticipated, however, considering the big moves above expectations: Full-year earnings of $4.51-4.58 per share is below the Zacks consensus $4.60, while the revenue range of $3.73 billion – $3.77 billion compares with the previous Zacks estimate of $3.76 billion. Shares are up 2.8% in the late session, after initially trading down on the news. For more on LULU's earnings, click here.


Restoration Hardware RH blew the doors off its Q1 expectations, putting up $1.85 per share on $599 million in sales, compared to Zacks consensus figures of $1.54 per share and $583 million, respectively. The high-end furniture retailer has not missed an earnings estimate in 3 full years.

Full-year guidance was also well beyond what analysts were looking for: for the full year, RH expects earnings of $8.76-9.27 per share — leaving the Zacks consensus $8.33 in the dust. Revenues are guided to a range of $2.64-2.66 billion, whereas the Zacks consensus estimate had been for $2.61 billion. After-market trading has RH up a whopping 24% at this hour.

CEO Gary Friedman will be leading a conference call for Restoration Hardware at the 5pm PT to let analysts know how he was able to pull off the magic once again. I thought this was supposed to be a weak economy for retail?

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