lululemon athletica inc. (LULU)

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Lululemon Athletica (LULU)

Q2 2012 Earnings Call

September 07, 2012 9:00 am ET


Therese Hayes

Christine M. Day - Chief Executive Officer, President and Director

John E. Currie - Chief Financial Officer, Principal Accounting Officer, Executive Vice President and Treasurer

Sheree Waterson - Chief Product Officer


Sharon Zackfia - William Blair & Company L.L.C., Research Division

Adrienne Tennant - Janney Montgomery Scott LLC, Research Division

Omar Saad - ISI Group Inc., Research Division

Howard Tubin - RBC Capital Markets, LLC, Research Division

Jennifer Black

Kimberly C. Greenberger - Morgan Stanley, Research Division

Dana Lauren Telsey - Telsey Advisory Group LLC

John D. Kernan - Cowen and Company, LLC, Research Division

Janet Kloppenburg

Lorraine Maikis Hutchinson - BofA Merrill Lynch, Research Division

Betty Y. Chen - Wedbush Securities Inc., Research Division

Roxanne Meyer - UBS Investment Bank, Research Division

Christian Buss - Crédit Suisse AG, Research Division

Pamela Nagler Quintiliano - Oppenheimer & Co. Inc., Research Division

John D. Morris - BMO Capital Markets U.S.

Paul Lejuez - Nomura Securities Co. Ltd., Research Division

Jim Duffy - Stifel, Nicolaus & Co., Inc., Research Division

Erika K. Maschmeyer - Robert W. Baird & Co. Incorporated, Research Division

Edward J. Yruma - KeyBanc Capital Markets Inc., Research Division



Good day, ladies and gentlemen, and welcome to the lululemon athletica Q2 2012 Results Conference Call. [Operator Instructions] As a reminder, today's conference call is being recorded. I'd now like to turn the conference over to your host, Ms. Therese Hayes, VP of Communication and Sustainability. Please go ahead.

Therese Hayes

Thank you. Good morning, everybody, and thank you for joining us this morning. A copy of today's press release is available on the Investor Relations section of lululemon's website at or furnished on Form 8-K with the SEC and available on the commission's website at Shortly after we end this morning, a recording of today's call will be available as a replay for 30 days in the Investors section of the company's website.

Hosting our call today is Christine Day, the company's CEO; and John Currie, the company's CFO. Sheree Waterson, our Chief Product Officer, will also be available during the Q&A portion of the call. We would like to remind everyone, of course, that statements contained on this 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 those 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.

[Operator Instructions] And with that, I'll turn it over to Christine Day.

Christine M. Day

Thank you, Therese. Good morning, everyone, and welcome to today's call to discuss our second quarter results. Labor Day seemed to sneak up on us faster than ever this year, likely because we were even busier than usual this summer. We enjoyed another strong quarter, coming in ahead of our expectations. John will go through the specifics on the numbers a little later in the call, so I will touch on the key events of the quarter and subsequent weeks.

I signed off last call with an invitation to all of you to join us at our inaugural SeaWheeze Half Marathon. And thanks to the wonderful team who worked so hard to put all of this together and to our many communities who participated, it was a tremendous success. As I drove to the event that sunny morning in Vancouver, it was raining colored luon as the runners headed to the check-in station. Over 7,000 people joined us for a weekend of fun, including pre-run sunrise yoga, the 13-mile tour of our wonderful hometown city, complete with Cheer Stations at every community we ran through from dragons in Chinatown, tai chi at David Lam Park and the world's largest Cheer Station at lululemon's very first store on 4th Avenue. We viewed The Street girl dancers, one of my favorites, and the drag queens in the West End. The day ended with a 1,000-person sunset yoga class on the beach, hosted by our ambassador, Mara, who many of you will remember from the morning yoga class that you participated in during our Analyst Day.

It was my first half marathon, but won't be my last. We've already announced that we will host it again next year, and I'm telling you right now that you better get your spot early as it's even likely to be more popular next year.

It is remarkable to think that a couple of back page ads in Runner's World, we could attract a sellout crowd to our first-ever run event. It is a reflection of our ongoing commitment to our communities, to the grassroots authentic relationships we have developed over time and to the deep connection and partnership that we enjoy with our guests. Our #1 priority is meeting our guests where they are at, and it was wonderful to see that they were equally willing to be excited and come celebrate with us here in Vancouver. To show how much the participants and the community enjoyed the event, for 2 hours that day, we were the top 5 of the top 10 trending topics in Vancouver, and this is while the Olympics were on.

We followed the SeaWheeze weekend with our leadership conference, which is a gathering of our store managers and some of our top educators from our North American stores. Vancouver must have thought there was a lululemon invasion as we hosted approximately 700 of our best and brightest for 3 days of learning, development and sharing.

A couple of weeks later, we continued our community-building efforts and our support of the full ecosystem of yoga by collaborating with our friends at Wanderlust to bring this well-known yoga festival to Canada for the very first time. During the 4-day festival, Whistler was host to over 12,000 yogis celebrating music and all aspects of the practice, from chanting with Janet Stone to the Baptiste yoga, a deep cleanse practice with Seane Corn, and to some very modern twist on the practice, including hula-hoop yoga, slackline yoga and stand-up paddle board yoga.

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