Lululemon surges after beating on earnings and announcing store closures for its kids’ line

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Lululemon/Facebook

Lululemon gained as much as 8% in extended trading on Thursday after the company reported better earnings and revenues than expected, and plans to restructure its kids’ clothing line.

Ivivva, the activewear brand for girls, will become a primarily online-only business as Lululemon closes 40 of the 55 stores, the company said in its earnings statement.

Half of the remaining locations will be converted to Lululemon stores. All Ivivva-branded showrooms will be shut down.

Lululemon expects the restructuring to be mostly completed by the third quarter of the year, and anticipates $50 to $ 60 million in pre-tax costs during the first quarter related to this.

Lululemon said adjusted earnings per share in the first quarter was $0.32, beating analysts’ forecast for $0.28, according to Bloomberg. Net revenue totaled $520.31 million, ahead of the estimate for $513.69 million.

However, the company’s net revenue projection of $565 million-$570 million trailed analysts’ expectation for a range of $537 million to $587 million.

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Markets Insider