http://www.morningstar.com/earnings/30335119-lululemon-athletica-inc-lulu-q2-2011.aspx

Lululemon Athletica Inc LULU
Q2 2011 Earnings Call Transcript

Transcript Call Date 09/09/2011

Operator: Good day, ladies and gentlemen and thank you for standing by. Welcome to lululemon athletica Second Quarter 2011 Results Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. As a reminder, this conference may be recorded.

I would now like to introduce your host for today Mr. Joe Teklits with ICR. Sir, please go ahead.

Joseph Teklits - ICR: Okay, good morning. Thanks for joining us today for lululemon's second quarter 2011 results conference call. A copy of today's press release is available on the Investor Relations section of the Company's website at www.lululemon.com or furnished on Form 8-K with the SEC and available on the Commission's website at www.sec.gov. Also available in the Investor Relations section of the Company's website will be a recording of today's call which will be available for 30-days as a replay shortly after we end.

Hosting the call today is Christine Day, the Company's CEO; and John Currie, the Company's CFO. We would like to remind everyone of course that statements contained in this conference call which are not historical facts may be deemed to constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results might differ materially from these projected in such statements due to a number of risks and uncertainties, all of which are described in the Company's filings with the SEC.

With that, we'll turn the call over to Christine Day.

Christine Day - CEO: Thank you, Joe. Good morning, everyone and thank you for joining us to discuss our second quarter results. With me today is John Currie our CFO. Following my opening remarks I will turn the call over to John to review the financial details for the quarter and outlook for the third quarter and full year.

Our business remained very healthy through the second quarter and in the first half of 2011 we have achieved milestones for our company in sales productivity and operating margin, while growing pre-tax income by more than 60%, and more importantly our success continues to be based on running a healthy, brand focused business that consistently delivers product quality and innovation along with the great guest experience, attributes that we are passionate about that has enabled us to build the brand recognition and win the loyalty of our existing customers.

So, not only are we growing nicely, including revenue growth of almost 40% in the second quarter, we also continue to invest in the strong foundation for building long-term success and we believe that we are well positioned to continue our growth initiatives despite any potential recessionary retail environment and product inflation headwinds. Adding to a major initiative earlier this year, which was transitioning our e-commerce platform in health, we also continue to advance on a number of fronts.

First, we took the next step with ivivva with the launch of our new ivivva e-commerce site in Canada, with the U.S. to follow late fall, ivivva is all about dance, movement and fun, and we are excited to bring this to life for Canadian girls nationwide with our new online store that captures the vibrant colors and technical features of the product assortments as well as other cool features on the new site. Also for ivivva, we are developing a new line in partnership with Disney consumer products for spring 2012 providing girls with dance-inspired athletic wear that fits their active lifestyles and ties back to the Disney Channel dance comedy series 'Shake It Up'.

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