lululemon athletica, inc.
Dec 9, 2009

lululemon athletica inc. Announces Third Quarter Fiscal 2009 Results

Third Quarter Net Revenue Increases 30% to $112.9 million
Third Quarter Diluted EPS of $0.20
Introduces Fourth Quarter Diluted EPS Outlook in the Range of $0.26 to $0.28

VANCOUVER, Dec 09, 2009 (BUSINESS WIRE) -- lululemon athletica inc. [NASDAQ: LULU; TSX: LLL] today announced financial results for the third quarter ended November 1, 2009.

For the third quarter of 2009:

For the first three fiscal quarters of 2009:

The Company ended the quarter with $101.8 million in cash and cash equivalents as compared to $56.8 million at the end of fiscal 2008. Inventory at the end of the quarter totaled $52.1 million as compared to $49.1 million at the end of the third quarter in fiscal 2008.

Christine Day, lululemon's CEO stated: "Sales momentum continued to build in the third quarter as consumers responded to our distinctive product, community connections and in store guest experience. Our hard work on our supply chain initiatives and strong relationships with our suppliers allowed us to meet our growing demand." Ms. Day continued, "We also made significant progress in improving our gross margin with a return to the 50% level, and are very pleased to deliver these results in a challenging retail environment."

Updated Outlook

For the fourth quarter of fiscal 2009, we expect net revenue to be in the range of $140 million to $145 million based on a comparable-store sales increase in the mid teens on a constant-dollar basis. Diluted earnings per share are expected to be in the range of $0.26 to $0.28 for the quarter. This assumes a tax rate of 35% and 71.3 million diluted weighted-average shares outstanding.

Conference Call Information

A conference call to discuss third quarter results is scheduled for today, December 9, 2009, at 4:30 PM Eastern Time. Investors interested in participating in the call are invited to dial (877) 741-4242 approximately ten minutes prior to the start of the call. The conference call will also be webcast live at www.lululemon.com. The webcast will be accessible on our website for approximately 30 days after the call.

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, visit www.lululemon.com.

Non-GAAP Financial Measure

Constant-dollar net revenue changes, which exclude the impact of changes in foreign exchange rates, is not a U.S. Generally Accepted Accounting Principle ("GAAP") performance measure. We provide constant-dollar net revenue changes because we use the measure to understand the underlying growth rate of revenue excluding the impact on a quarter by quarter basis of changes in foreign exchange rates, which are not under management's direct control. We believe that disclosing net revenue changes on a constant-dollar basis is useful to investors because it enables them to better understand the level of growth of our business.

Forward-Looking Statements:

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 or results of operations, our prospects and strategies for future growth, 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," "outlook," "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; risks that consumer spending may continue to decline and that U.S. and global macroeconomic conditions may worsen; the possibility that levels of comparable-store sales or average sales per square foot will decline; the possibility that we may not be able to successfully expand in the United States and other new markets; increased competition causing us to reduce the prices of our products or to increase significantly our marketing efforts in order to avoid losing market share; the possibility that we may not be able to continually innovate and provide our consumers with improved products; the possibility that our suppliers or manufacturers may not produce or deliver our products in a timely or cost-effective manner; and other risk factors detailed in our Annual Report on Form 10-K for the fiscal year ended February 1, 2009 and in our subsequent reports on Form 10-Q filed with the Securities and Exchange Commission and available at www.sec.gov. You are urged to consider these factors carefully in evaluating the forward-looking statements contained herein and are cautioned not to place undue reliance on such forward-looking statements, which are qualified in their entirety by these cautionary statements. 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.

Condensed Consolidated Statements of Operations

Expressed in thousands, except per share amounts

(Unaudited)

Thirteen
Weeks Ended

Thirteen
Weeks Ended

Thirty-Nine
Weeks Ended

Thirty-Nine
Weeks Ended

November 1,
2009

November 2,
2008

November 1,
2009

November 2,
2008

Net revenue $112,891 $87,047 $292,292 $249,565
Costs of goods sold 56,553 45,154 155,766 122,159
Gross profit 56,338 41,893 136,526 127,406
As a percent of net revenue49.9%48.1%46.7%51.1%
Selling, general and administrative expenses 35,412 28,838 91,415 86,886
As a percent of net revenue31.4%33.1%31.3%34.8%
Income from operations 20,926 13,055 45,111 40,520
As a percent of net revenue18.5%15.0%15.4%16.2%
Other income (expense), net (3) 145 98 612
Income before income taxes 20,923 13,200 45,209 41,132
Provision for income taxes 6,855 4,370 15,379 11,571
Net income from continuing operations $14,068 $8,830 $29,830 $29,561
Net income (loss) from discontinued operations -- 4 -- (1,136)
Net income $14,068 $8,834 $29,830 $28,425
Basic earnings (loss) per share:
Continuing operations $0.20 $0.13 $0.42 $0.44
Discontinued operations -- -- -- (0.02)
Net basic earnings per share $0.20 $0.13 $0.42 $0.42
Diluted earnings (loss) per share:
Continuing operations $0.20 $0.13 $0.42 $0.42
Discontinued operations -- -- -- (0.02)
Net diluted earnings per share $0.20 $0.13 $0.42 $0.40
Weighted-average outstanding:
Basic 70,279 69,162 70,205 68,316
Diluted 71,100 70,609 70,759 71,008

lululemon athletica inc.

Condensed Consolidated Balance Sheets

Expressed in thousands

November 1, 2009February 1, 2009
(unaudited)
ASSETS
Current assets
Cash and cash equivalents $101,832 $56,797
Inventories 52,103 52,051
Other current assets 12,133 8,140
Total current assets 166,068 116,988
Property and equipment, net 59,900 61,662
Intangible assets, net 8,257 8,160
Deferred income taxes and other assets 12,543 24,826
Total assets $246,768 $211,636
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $5,866 $5,269
Other current liabilities 33,581 37,933
Income taxes payable -- 2,133
Total current liabilities 39,447 45,335
Deferred income taxes and other non-current liabilities 14,722 11,459
Stockholders' equity 192,599 154,842
Total liabilities and stockholders' equity $246,768 $211,636

lululemon athletica inc.

Condensed Consolidated Statements of Cash Flows

Expressed in thousands

(Unaudited)

Thirty-Nine
Weeks Ended
November 1, 2009

Thirty-Nine
Weeks Ended
November 2, 2008

Cash flows from operating activities
Net income from continuing operations $29,830 $29,561
Items not affecting cash 20,829 3,146
Other, including net changes in other non-cash
balances 834 (3,503)
Net cash provided by operating activities 51,493 29,204
Net cash used in investing activities (10,214) (35,639)
Net cash provided by financing activities 252 11,125
Effect of exchange rate changes on cash 3,504 (5,196)
Increase (decrease) in cash and cash equivalents from
continuing operations 45,035 (506)
Cash and cash equivalents from continuing operations,
beginning of period 56,797 52,545
Cash and cash equivalents from continuing operations,
end of period $101,832 $52,039

lululemon athletica inc.

Reconciliation of Non-GAAP Financial Measure

Constant-dollar changes

Thirteen Weeks EndedThirteen Weeks Ended
November 1, 2009November 2, 2008
% Change% Change
Comparable-store sales (GAAP) 11% (2)%
Increase (decrease) due to foreign
exchange rate changes (1)% 6%
Comparable-store sales in constant
dollars 10% 4%

SOURCE: lululemon athletica inc.

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or
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