Lululemon Athletica Inc. (NASDAQ: LULU) reported first-quarter 2016 results before markets opened Wednesday. The yoga gear maker posted adjusted diluted earnings per share (EPS) of $0.30 on revenues of $495.5 million, compared with EPS of $0.34 on revenues of $423.5 million in the same period a year ago. The consensus estimates called for EPS of $0.31 on revenues of $487.67 million.

On a GAAP basis, EPS came in at $0.33, compared with $0.34 in the year-ago quarter. Adjusted EPS excluded tax and related interest benefits of three cents per share in the first quarter.

Total comparable sales for the quarter, including direct sales to consumers, increased by 8% year over year on a constant dollar basis. Same-store sales rose 5% and direct-to-consumer sales rose 18%, also on a constant dollar basis.

Gross profit slipped from 48.6% in the year-ago quarter to 48.3%, although the dollar value rose by 16%.

Income from operations dropped 15% year over year and as a percentage of revenue fell from 16.1% in the first quarter of last year to 11.6%. Cost of goods sold rose by nearly $40 million, and SG&A expenses as a percentage of revenue rose from 32.5% a year ago to 36.6%.

The company guided second-quarter diluted EPS in the range of $0.36 to $0.38 on revenues of $505 million to $515 million. Consensus estimates called for EPS of $0.39 on revenues of $513.9 million. In the year-ago quarter Lululemon posted EPS of $0.34 on sales of $453.01 million.

Lululemon raised its outlook for fiscal year revenue from a prior range of $2.285 billion to $2.335 billion to a new range of $2.305 billion to $2.345 billion. The company also raised EPS guidance from a prior range of $2.05 to $2.15 to a new range of $2.08 to $2.18. Analysts have estimated EPS of $2.16 and revenues of $2.34 billion.

During the first quarter, the company repurchased 200,000 shares of common stock at an average cost of $65.01 per share. The company’s CEO, Laurent Potdevin, said:

We are pleased with our first quarter performance, delivering strong sales results and gross margin that exceeded expectations. We finished the quarter with our inventory levels rebalanced and on track to achieve our goals for the year.

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The company’s second-quarter EPS guidance is below expectations and that will weigh on the shares in Wednesday’s trading. The full-year guidance has been increased and that will ameliorate the second-quarter forecast somewhat.

Lululemon’s shares traded down about 0.9% in Wednesday’s premarket session, at $67.50 in a 52-week range of $43.14 to $69.73. The consensus price target before the report was $69.45, and the highest posted target was $85.00.

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