VANCOUVER — Lululemon Athletica Inc. beat expectations as second-quarter profits slipped despite a two-per-cent increase in sales driven by a surge in online revenues.

The Vancouver-based athleisure retailer says it earned US$86.8 million or 66 cents per diluted share, down from US$125 million or 96 cents per share a year earlier.

Revenues for the period ended Aug. 2 were US$902.9 million, up from US$883.4 million in the prior year.

The company, which reports in U.S. dollars, was expected to earn 54 cents per share on $842.5 million, according to financial data firm Refinitiv.

Net revenue from company-operated stores plunged 51 per cent to $287.2 million while direct to consumer net revenue was $554.3 million, an increase of 155 per cent.

Lululemon has reopened 492 or its 506 company-operated stores, after temporarily closing stores in North America, Europe and some countries in Asia Pacific in its previous quarter because of the COVID-19 pandemic.

"As trends around the world are shifting to working and sweating from home with an increased focus on health and wellness, we believe 2020 is likely an inflection point for retail and for Lululemon," said CEO Calvin McDonald.

"We are cautiously optimistic with regard to the second half of the year as we continue to navigate the uncertain environment."

This report by The Canadian Press was first published Sept. 8, 2020.

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