Lululemon gained as much as 15% in trading on Friday after the company reported better earnings and revenues than expected, and plans to restructure its kids' clothing line.
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Lululemon surges after beating on earnings and announcing store closures for its kids' line (LULU)
Ivivva, the activewear brand for girls, will become a primarily online-only business.
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Ivivva, the activewear brand for girls, will become a primarily online-only business as 40 of the 55 stores close, Lululemon said in its earnings statement on Thursday.
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 fiscal 2017, and anticipates $50 to $60 million in pre-tax costs during the fiscal year related to this.
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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 to $570 million trailed analysts' expectation for a range of $537 million to $587 million.
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