Lululemon rises as retailer outpaces Q1 analyst expectations

VANCOUVER, British Columbia–(BUSINESS WIRE)–Jun. 12, 2019– lululemon athletica inc. (NASDAQ:LULU) today announced financial results for the first quarter of fiscal 2019.

For the first quarter ended May 5, 2019:

  • Net revenue was $782.3 million, an increase of 20% compared to the first quarter of fiscal 2018. On a constant dollar basis, net revenue increased 22%.
  • Based on a shifted calendar, total comparable sales increased 14%, or increased 16% on a constant dollar basis.
    • Comparable store sales increased 6%, or increased 8% on a constant dollar basis.
    • Direct to consumer net revenue increased 33%, or increased 35% on a constant dollar basis.
  • Direct to consumer net revenue represented 26.8% of total net revenue compared to 24.3% for the first quarter of fiscal 2018.
  • Gross profit was $421.7 million, an increase of 22% compared to the first quarter of fiscal 2018.
  • Gross margin was 53.9%, an increase of 80 basis points compared to the first quarter of fiscal 2018.
  • Income from operations was $128.8 million, an increase of 23% compared to the first quarter of fiscal 2018.
  • Operating margin was 16.5%, an increase of 40 basis points compared to the first quarter of fiscal 2018.
  • Income tax expense was $34.6 million compared to $32.1 million in the first quarter of fiscal 2018 and the effective tax rate was 26.4% compared to 29.9%.
  • Diluted earnings per share were $0.74 compared to $0.55 in the first quarter of fiscal 2018.

The Company ended the first quarter of fiscal 2019 with $576.2 million in cash and cash equivalents compared to $966.6 million at the end of the first quarter of fiscal 2018. Inventories at the end of the first quarter of fiscal 2019 increased 19% to $443.0 million compared to $373.4 million at the end of the first quarter of fiscal 2018. The Company ended the quarter with 455 stores.

Calvin McDonald, Chief Executive Officer, commented: “lululemon continues to see strong momentum across the entire business. I’m inspired by our teams who are executing at high levels, and I want to thank everyone across the globe for their passion and dedication to the brand. I look forward to the opportunities ahead of us, and delivering on our Power of Three five-year vision.”

Updated Outlook

For the second quarter of fiscal 2019, we expect net revenue to be in the range of $825 million to $835 million based on a total comparable sales increase in the low double digits on a constant dollar basis. Diluted earnings per share are expected to be in the range of $0.86 to $0.88 for the quarter. This guidance assumes 131 million diluted weighted-average shares outstanding and a 28% tax rate. The guidance does not reflect potential future repurchases of the Company’s shares.

For the full fiscal 2019, we now expect net revenue to be in the range of $3.730 billion to $3.770 billion based on a total comparable sales increase in the low double digits on a constant dollar basis. Diluted earnings per share are expected to be in the range of $4.51 to $4.58 for the full year, based on a 28% effective tax rate. The guidance assumes 131 million diluted weighted-average shares outstanding. The guidance does not reflect potential future repurchases of the Company’s shares.

The guidance and outlook forward-looking statements made in this press release are based on management’s expectations as of the date of this press release and the Company undertakes no duty to update or to continue to provide information with respect to any forward-looking statements or risk factors, whether as a result of new information or future events or circumstances or otherwise. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of risks and uncertainties, including those stated below.

Source: BNN & Lululemon

 

2019-06-13T15:25:59-04:00 June 13th, 2019|