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Diluted earnings per share were $0.07 on net income of $5.1 million (compared to $0.03 on net income of $1.9 million in Q2 2006). Net revenue increased 80% to $58.7 million (from $32.5 million in 2006 Q2).

Income from operations increased 202% to $9.8 million, or 17% of revenues (compared to $3.2 million, or 10% of revenues, in Q2 2006).  Net revenue from corporate-owned stores also increased 98% to $53.1 million compared to $26.8 million for the second quarter of fiscal 2006, with comparable store sales growth of 30%.  Gross profit as a percentage of revenue rose 430 basis points to approximately 53% of net revenue from 49% in Q2 2006.

Unfortunately, these estimates are hard to compare.  The coverage universe from the underwriters just opened up last week, as you saw in our analyst initiations of LULU.  Shares closed up 2.1% at $36.66 in normal trading, about 6% off of its post-IPO highs.  But in after-hours activity, shares are trading down over 7% to under $34.00 in the initial reaction.  These fresh companies are often hard to cover with estimates and using real targets right out of the chute. 

Apparently these are not being deemed as enough above what the street wanted, but the real indications will come from the trading levels in pre-market trading tomorrow.  It makes you wonder if Cramer will still think of this as "The Next Under Armour" that he discussed last month.

Jon C. Ogg
September 10, 2007

Jon Ogg produces the 24/7 Wall St. SPECIAL SITUATION INVESTING NEWSLETTER; he does not own securities in the companies he covers.