Lululemon Athletica Inc (NASDAQ:LULU) stock fell 12.51% (As on December 9, 12:32:33 AM UTC-4, Source: Google Finance) though the company beats the earnings estimates for the third quarter of FY 22. Net revenue increased 26% in North America, and increased 41% internationally. Total comparable sales increased 22%, or 25% on a constant dollar basis. Comparable store sales increased 14%, or 17% on a constant dollar basis. Direct to consumer net revenue increased 31%, or 34% on a constant dollar basis. Direct to consumer net revenue represented 41% of total net revenue compared to 40% for the third quarter of 2021. Gross profit increased 25% to $1.0 billion and gross margin decreased 130 basis points to 55.9%. Adjusted income from operations increased 25%. Adjusted operating margin decreased 40 basis points. The Company had opened 23 net new company-operated stores during the third quarter, ending with 623 stores. The Company ended the third quarter of 2022 with $352.6 million in cash and cash equivalents and the capacity under its committed revolving credit facility was $394.8 million. Inventories at the end of the third quarter of 2022 increased 85% to $1.7 billion compared to $0.9 billion at the end of the third quarter of 2021. On a unit basis inventory increased 80%, representing a three-year compound annual growth rate of 38%, which is inclusive of three-percentage points for in-transit inventories.

LULU in the third quarter of FY 22 has reported the adjusted earnings per share of $2, beating the analysts’ estimates for the adjusted earnings per share of $1.97, according to figures compiled by Thomson Reuters. The company had reported the adjusted revenue growth of 28.3 percent to $1.86 billion in the third quarter of FY 22.

For the fourth quarter of 2022, the Company expects net revenue to be in the range of $2.605 billion to $2.655 billion, representing a three-year compound annual growth rate of approximately 24%. Diluted earnings per share are expected to be in the range of $4.20 to $4.30 for the quarter. For 2022, the Company expects net revenue to be in the range of $7.944 billion to $7.994 billion, representing a three-year compound annual growth rate of approximately 26%. Diluted earnings per share are expected to be in the range of $9.94 to $10.04 for the year and, excluding the gain on the sale of an administrative office building, adjusted diluted earnings per share are expected to be in the range of $9.87 to $9.97.