lululemon athletica inc. Announces Second Quarter Fiscal 2008 Results
VANCOUVER, Canada, Sep 11, 2008 (BUSINESS WIRE) -- lululemon athletica inc. [NASDAQ: LULU; TSX: LLL] today announced financial results for the thirteen weeks ended August 3, 2008.
For the thirteen weeks ended August 3, 2008:
-- Net revenue increased 48% to $85.5 million from $57.9 million for the second quarter of fiscal 2007. Net revenue from corporate-owned stores was $78.3 million, an increase of 50% from $52.3 million for the second quarter of fiscal 2007, with comparable-store sales increasing 13% on a constant-dollar basis compared to the second quarter of fiscal 2007, or 18% including the impact of currency.
-- Income from operations increased 52% to $15.5 million, or 18.2% of net revenue, compared to $10.2 million, or 17.7% of net revenue, in the second quarter of fiscal 2007.
-- Diluted earnings per share from continuing operations were $0.18 on net income of $12.3 million, compared to diluted earnings per share of $0.08 on net income of $5.5 million in the second quarter of fiscal 2007. Diluted earnings per share were $0.16 after deducting a loss of $0.02 per share for discontinued operations resulting from the Company's closure of its stores in Japan.
For the twenty six weeks ended August 3, 2008:
-- Net revenue increased 59% to $162.4 million compared to $102.0 million for the same period in fiscal 2007. Net revenue from corporate-owned stores increased 65% to $147.7 million compared to $89.7 million for the same period in fiscal 2007, with comparable store sales growth of 14% on a constant dollar basis or 22% including the impact of currency.
-- Income from operations increased 58% to $27.5 million, or 16.9% of net revenue, compared to $17.4 million, or 17.0% of net revenue, in the first six months of fiscal 2007.
-- Diluted earnings per share from continuing operations were $0.29 on net income of $20.8 million, compared to diluted earnings per share of $0.13 on net income of $9.3 million for the same period in fiscal 2007. Diluted earnings per share were $0.27 for the first twenty six weeks of fiscal 2008, after deducting a loss of $0.02 per share for discontinued operations.
Christine Day, lululemon's CEO stated: "We have a lot of accomplishments to celebrate this quarter. We are pleased with our financial performance, particularly in light of the current retail environment, and have made notable progress on various initiatives in real estate, systems and people that will support our long term growth objectives. Looking ahead, we are excited by our continued sales momentum and the tremendous opportunity for the lululemon brand as we expand our store base and develop our e-commerce business."
Based on the results year to date and our outlook for the balance of the year, the Company maintains its guidance for fiscal 2008 diluted earnings per share in the range of $0.68-$0.71.
The Company continues to expect revenue between $380 million and $385 million based on anticipated comparable store sales growth of high single digits on a constant dollar basis and 35 planned new store openings in North America.
Although the Company benefited from a lower than expected tax rate in the second quarter due to the timing of certain tax deductions, we continue to expect an average effective tax rate in the low 30% range for the full year and anticipate diluted weighted average shares outstanding of approximately 71 million for 2008. Fiscal 2008 earnings guidance includes a $0.02 charge per share recorded in the second quarter resulting from the Company's closure of its four stores that operated in Japan.
The Company's long-term growth targets continue to be net revenue growth of approximately 25% and diluted EPS growth in excess of 25%.
Conference Call Information
A conference call to discuss second quarter results is scheduled for today, September 11, 2008, at 9:00 AM Eastern Time. Investors interested in participating in the call are invited to dial (877) 548-7912 approximately ten minutes prior to the start of the call. The conference call will also be webcast live at www.lululemon.com.
About lululemon athletica inc.
lululemon athletica (NASDAQ: LULU; TSX: LLL) is a yoga-inspired athletic apparel company that creates components for people to live longer, healthier and more fun lives. By producing products that help keep people active and stress free, lululemon believes that the world will be a better place. Setting the bar in technical fabrics and functional designs, lululemon works with yogis and athletes in local communities for continuous research and product feedback. For more information, http://www.lululemon.com.
This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 that involve risks, uncertainties and assumptions, such as statements regarding our future financial condition, financial results or results of operations, our prospects and strategies for future growth, both in North America and internationally, the development and introduction of new products, and the implementation of our marketing and branding strategies. In many cases, you can identify forward-looking statements by terms such as "may," "will," "should," "expects," "plans," "anticipates," "believes," "intends," "estimates," "predicts," "potential" or the negative of these terms or other comparable terminology. These forward-looking statements are based on management's current expectations but they involve a number of risks and uncertainties. Actual results and the timing of events could differ materially from those anticipated in the forward-looking statements as a result of risks and uncertainties, which include, without limitation: the possibility that we may not be able to manage operations at our current size or manage growth effectively; the possibility that we may not be able to identify suitable locations to open new stores or attract customers to our stores; the possibility that we may not be able to successfully expand in the United States or in other markets, or expand into new markets; the possibility that we may not be able to finance our growth and maintain sufficient levels of cash flow; the possibility that a general economic slowdown could adversely affect our results of operations and growth plans; increasing competition, which may cause us to reduce the prices of our products or to increase significantly our marketing efforts to avoid losing market share; the possibility that we may not be able to effectively market and maintain a positive brand image; the possibility that we may not be able to continually innovate and provide our consumers with improved products; and other risk factors detailed in our filings with the Securities and Exchange Commission, including the risk factors contained in our fiscal 2007 Annual Report on Form 10-K filed with the SEC and other filings we make with the SEC. Our filings with the SEC are available at http://www.sec.gov. You are urged to consider these factors carefully in evaluating the forward-looking statements herein and are cautioned not to place undue reliance on such forward-looking statements, which are qualified in their entirety by this cautionary statement. The forward-looking statements made herein speak only as of the date of this press release and the Company undertakes no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.
lululemon athletica inc. Consolidated Statements of Operations (unaudited) Expressed in thousands of dollars except per share amounts Thirteen Weeks Ended Three Months Ended Twenty Six Weeks Ended Six Months Ended August 3, 2008 July 31, 2007 August 3, 2008 July 31, 2007 Net revenue $ 85,484 $ 57,900 $ 162,424 $ 102,039 Costs of goods sold 41,108 27,167 76,948 48,901 Gross profit 44,376 30,733 85,476 53,138 As a percent of revenues 51.9% 53.1% 52.6% 52.1% Selling, general and administrative expenses 28,833 20,490 57,987 35,783 As a percent of revenues 33.7% 35.4% 35.7% 35.1% Income from operations 15,543 10,243 27,489 17,355 As a percent of revenues 18.2% 17.7% 16.9% 17.0% Other expense (income), net (211) (71) (489) (178) Income before provision for income taxes 15,754 10,314 27,978 17,533 Provision for income taxes 3,415 4,798 7,169 8,247 Net income from continuing operations $ 12,339 $ 5,516 $ 20,810 $ 9,286 Net loss from discontinued operations (1,192) (394) (1,186) (623) Net income $ 11,147 $ 5,122 $ 19,624 $ 8,663 Basic earnings / (loss) per share: Continuing operations $ 0.18 $ 0.08 $ 0.31 $ 0.14 Discontinued operations (0.02) (0.01) (0.02) (0.01) Net basic earnings per share $ 0.16 $ 0.07 $ 0.29 $ 0.13 Diluted earnings / (loss) per share: Continuing operations $ 0.18 $ 0.08 $ 0.29 $ 0.13 Discontinued operations (0.02) (0.01) (0.02) (0.01) Net diluted earnings per share $ 0.16 $ 0.07 $ 0.27 $ 0.12 Weighted average outstanding: Basic 68,106,601 65,225,819 67,892,456 65,225,819 Diluted 70,375,980 68,891,237 70,799,684 68,878,832
lululemon athletica inc. Condensed Consolidated Balance Sheets Expressed in thousands of dollars August 3, 2008 February 3, 2008 (unaudited) ASSETS Current assets Cash and cash equivalents $ 43,735 $ 52,545 Inventories 43,433 37,932 Other current assets 11,023 8,384 Total current assets 98,191 98,861 Property and equipment, net 55,473 43,605 Intangible assets, net 7,374 8,124 Deferred income taxes and other assets 13,431 4,502 Total assets $ 174,469 $ 155,092 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable $ 1,322 $ 5,159 Other current liabilities 26,894 25,261 Income taxes payable --- 5,720 Total current liabilities 28,216 36,140 Deferred income taxes and other non-current liabilities 9,745 6,918 Stockholders' equity 136,508 112,034 Total liabilities and stockholders' equity $ 174,469 $ 155,092
SOURCE: lululemon athletica inc.
Investors ICR Joseph Teklits, 203-682-8258 or Media FD Evan Goetz, Diane Zappas, 212-850-5600
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