lululemon athletica inc. Announces First Quarter Fiscal 2008 Results

Business Wire,  June 2, 2008  

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First Quarter Net Revenue Increases 75% to $78.2 million

First Quarter Diluted EPS of $0.12

Updates Guidance for Fiscal 2008

VANCOUVER, British Columbia -- lululemon athletica inc. (NASDAQ: LULU; TSX: LLL) today announced financial results for the thirteen weeks ended May 4, 2008.

For the thirteen weeks ended May 4, 2008:

* Net revenue increased 75% to $78.2 million from $44.8 million for the first quarter of fiscal 2007. Net revenue from corporate-owned stores was $70.6 million, an increase of 86% from $38.0 million for the first quarter of fiscal 2007, with comparable-store sales increasing 28% compared to the first quarter of fiscal 2007, or 15% on a constant-dollar basis.

* Gross profit as a percentage of net revenue increased 260 basis points to 53.1% of net revenue from 50.5% of net revenue in the first quarter of fiscal 2007.

* Income from operations was $11.7 million, or 15.0% of net revenue, compared to $6.8 million, or 15.3% of net revenue, in the first quarter of fiscal 2007.

* Diluted earnings per share were $0.12 on net income of $8.5 million, compared to diluted earnings per share of $0.05 on net income of $3.5 million in the first quarter of fiscal 2007.

Robert Meers, lululemon's CEO stated: "We are pleased with the continued momentum of our business through the first quarter despite the overall consumer environment. The investments into our systems and people position us well to gain market share as we continue to expand our store base in the United States and migrate into ecommerce next year." Mr. Meers continued: "For me, it is gratifying to know that an extremely strong foundation is in place at lululemon, and a talented new CEO will be leading the organization into the future starting this second quarter."

Christine Day, lululemon's CEO designate stated: "Along with our strong results in the first quarter, we were able to make some important senior level management hires and successfully implement the first phase of our systems upgrade. We also plan to make additional strategic investments in our long term growth that will result in a slightly reduced EPS outlook for fiscal 2008. That said, we will continue to strive to deliver exceptional results, attracting new guests to our brand through our unique culture, store experience and distinctive community-based approach to retail. I am extremely encouraged about our long term growth and future."

Updated Guidance

Based on the results from our first fiscal quarter and our outlook for the balance of the year, the Company now expects diluted earnings per share for fiscal 2008 to be $0.68-$0.71 versus previous guidance of $0.70-$0.72.

This guidance continues to be based on anticipated comparable store sales growth of low teens; or high single digits on a constant dollar basis, and 35 planned new store openings in North America. Due to strong sales at new stores not in the comp base, coupled with an earlier than anticipated new store opening calendar for this year, we are raising revenue guidance to between $380 million and $385 million versus previous guidance of $370 million to $375 million. The lower earnings outlook is primarily a result of incremental hires and other strategic initiatives.

The Company expects an effective tax rate in the low 30% range for the full year and anticipates diluted weighted average shares outstanding of 71.7 million for 2008. Fiscal 2008 earnings guidance includes a charge of approximately $0.02 per share resulting from the Company's planned closure of its four stores currently operating in Japan.

The Company's long-term growth targets continue to be net revenue growth of approximately 25% and diluted EPS growth in excess of 25%.

Conference Call Information

A conference call to discuss first quarter results is scheduled for today, June 2, 2008, at 4:30 PM Eastern Time. Investors interested in participating in the call are invited to dial (877) 440-5788 approximately ten minutes prior to the start of the call. The conference call will also be webcast live at www.investor.lululemon.com/events.cfm.

About lululemon athletica inc.

lululemon athletica (NASDAQ: LULU; TSX: LLL) is a yoga-inspired athletic apparel company that creates components for people to live longer, healthier and more fun lives. By producing products that help keep people active and stress free, lululemon believes that the world will be a better place. Setting the bar in technical fabrics and functional designs, lululemon works with yogis and athletes in local communities for continuous research and product feedback. For more information, http://www.lululemon.com.

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