Lululemon Earnings Call Summary: Great Earnings, Weak Guidance

Lululemon Athletica LULU on Thursday held a conference call covering the apparel store's first-quarter results.

Despite posting better-than-expected results, management shared a weak second-quarter forecast which has been driving the stock down 14 percent. Alongside CFO John E. Currie announcing his retirement, management discussed current store operations, guidance for the upcoming quarters and future operations.

Current Store Operations

• Opened up a first store in London that posted an impressive $7 million revenue.
• Have opened up a total of 263 stores, which is 145 more stores from the 118 stores that were opened last year.
• Announced a repurchase of $140 million in shares to help finance operations.
• Opened up 30 new stores in U.S., two in Canada and Australia, and one in the U.K.

Guidance

• Expects Q2 net earnings of $0.28/share to $0.30/share on net revenue of $375 million. Down from analysts estimates of $0.36/shares on sales of $387.1 million.
• Projected adjusted earnings are expected to be $1.71/share to $1.76/share on net revenue of $1.77 billion to $1.80 billion for the full fiscal year of 2014.
• Despite weak guidance for the upcoming quarter, management was confident the firm would return to margins in the mid-50s.

Future Operations

• Making transition to a more interactive e-commerce platform to draw online sales.
• Opening more stores around the world, and opening pop-up stores to increase demand where there aren't already any stores.
• In-store consumer interactive technology was announced and would help customers become more interactive with the products in store.
• Management will conduct a comprehensive search for a new CFO.
• Planning to drive more depth to female apparel and make the brand more expansive.

Read further coverage of Lululemon's earnings HERE

Lululemon shares were last trading down 16.2 percent to $37.30.