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Strategies & Market Trends : The New Economy and its Winners

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To: stockman_scott who wrote (42792)	6/2/2008 6:25:33 PM
From: Bill Harmond	Read Replies (1) of 57684

17:32 LULU Lululemon Athletica Q1 Earnings Conference Call Summary (32.22 +0.23) -Update- Co issues Q2 guidance on conference call, sees Q2 EPS of $0.12-0.13 vs $0.15 First Call consensus. Co expects Q2 comparable store sales growth in the low teens and 10 new store openings in North America during the quarter. As for the guidance revision given, co feels this is a conservative and prudent guidance revision... Co says its priority is growing the brands through opening stores while protecting the tremendous culture at Lululemon. Co has many opportunities in front of it. Co is still very underpenetrated in the United States. The e-commerce business is just beginning to being formed and the international market is virtually untapped. The idea behind these initiatives is to make sure co is maximizing current potential as well as putting the right team in place to expand into tomorrow's new business successfully. Also while new stores continue to open with very strong productivity, co still thinks it has opportunities to execute even better. Co is set to open 35 stores this year and are already working on 2009 leases... Co continues to see major opportunities to strengthen its supply chain infrastructure. IT systems which will increase execution abilities enable co to more efficiently get the right product to the right stores on time and ultimately further long-term growth. The new merchandise and warehouse system which was implemented last quarter is live and moving... Inventory was up ~60% which was in line with sales growth especially considering the under stocked position last year. Historically co has had difficulty keeping up in demand with product and have been focused on the supply chain and -- on time this year. Co believes current inventory levels will improve co's stock position going forward as well as support aggressive growth plans for the remainder of the year. (stock is currently trading down 9.7% at ~$28.50)

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