lululemon athletica inc. (LULU) has reported a 31.08 percent plunge in profit for the quarter ended Apr. 30, 2017. The company has earned $31.25 million, or $0.23 a share in the quarter, compared with $45.34 million, or $0.33 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $44.31 million, or $0.32 a share compared with $40.93 million or $0.30 a share, a year ago.

Revenue during the quarter grew 5 percent to $520.31 million from $495.52 million in the previous year period. Gross margin for the quarter expanded 111 basis points over the previous year period to 49.37 percent. Total expenses were 91.27 percent of quarterly revenues, up from 88.38 percent for the same period last year. That has resulted in a contraction of 289 basis points in operating margin to 8.73 percent.

Operating income for the quarter was $45.42 million, compared with $57.59 million in the previous year period.

However, the adjusted operating income for the quarter stood at $63.17 million compared to $57.59 million in the prior year period. At the same time, adjusted operating margin improved 52 basis points in the quarter to 12.14 percent from 11.62 percent in the last year period.

Laurent Potdevin, chief executive officer, lululemon, commented: "I'm excited to see the positive trends that materialized late in Q1 continuing into Q2. Our current outlook for the remainder of 2017 is strong, and I'm energized by the growth strategies taking shape. I'm also confident in our plans to restructure ivivva and believe they are the best means to optimize this part of the business." Mr. Potdevin added: "From our cadence of product innovation, to our enhanced digital experience, and first-ever global brand campaign, we have never felt more deeply connected to our guest or better positioned to expand our collective. We remain laser focused on owning our position as the global brand defining an active, mindful lifestyle."

For the second-quarter 2017, lululemon athletica inc. forecasts revenue to be in the range of $565 million to $570 million. The company expects diluted earnings per share to be in the range of $0.13 to $0.15. On an adjusted basis, the company expects diluted earnings per share to be in the range of $0.33 to $0.35.

For fiscal year 2017,  lululemon athletica inc. forecasts revenue to be in the range of $2,530 million to $2,580 million. The company expects diluted earnings per share to be in the range of $1.97 to $2.07 and expects diluted earnings per share to be in the range of $2.28 to $2.38 on adjusted basis.

The company has spent $19.88 million cash to meet investing activities during the quarter as against cash outgo of $26.64 million in the last year period.

The company has spent $14.49 million cash to carry out financing activities during the quarter as against cash outgo of $13.62 million in the last year period.

Cash and cash equivalents stood at $698.29 million as on Apr. 30, 2017, up 26.95 percent or $148.24 million from $550.05 million on May 01, 2016.

Working capital increases

lululemon athletica inc. has recorded an increase in the working capital over the last year. It stood at $926.71 million as at Apr. 30, 2017, up 20.55 percent or $157.94 million from $768.76 million on May 01, 2016. Current ratio was at 5.50 as on Apr. 30, 2017, up from 4.80 on May 01, 2016.

Cash conversion cycle (CCC) has decreased to 50 days for the quarter from 100 days for the last year period. Days sales outstanding were almost stable at 1 days for the quarter, when compared with the last year period.

Days inventory outstanding has decreased to 53 days for the quarter compared with 101 days for the previous year period. At the same time, days payable outstanding was almost stable at 3 days for the quarter, when compared with the previous year period.