lululemon athletica, inc.
Mar 25, 2010

lululemon athletica inc. Announces Fourth Quarter and Full Year Fiscal 2009 Results

Fourth Quarter Net Revenue Increases 55% to $160.6 million
Fourth Quarter Diluted EPS of $0.40
Full Year Diluted EPS increases 49% to $0.82

VANCOUVER, Mar 25, 2010 (BUSINESS WIRE) -- lululemon athletica inc. [NASDAQ: LULU; TSX: LLL] today announced financial results for the fourth quarter and fiscal year ended January 31, 2010.

For the fourth quarter ended January 31, 2010:

For the fiscal year ended January 31, 2010:

The Company ended fiscal 2009 with $159.6 million in cash and cash equivalents compared to $56.8 million at the end of fiscal 2008. Inventory at the end of fiscal 2009 totaled $44.1 million compared to $52.1 million at the end of fiscal 2008.

Christine Day, lululemon's CEO stated: "We are very pleased with the growing sales momentum in our business which has accelerated as the economy has improved and with some of our key initiatives which have taken hold, such as expanding our running line, elevated product to give more value to our customers, and our e-commerce launch. Our 29% comparable-store sales increase reflects the strength of the lululemon brand driven by our quality, design, product innovation and unique positioning."

Updated Outlook

For the first quarter of fiscal 2010, we expect net revenue to be in the range of $125 million to $130 million based on a comparable-store sales increase in the upper 20% range on a constant-dollar basis. Diluted earnings per share are expected to be in the range of $0.18 to $0.20 for the quarter. This assumes a tax rate of 35% and 71.7 million diluted weighted-average shares outstanding.

For fiscal 2010, we expect net revenue to be in the range of $570 million to $585 million and diluted earnings per share are expected to be in the range of $1.00 to $1.05 for the full year. This assumes a tax rate of 35% and 72.5 million diluted weighted-average shares outstanding.

Conference Call Information

A conference call to discuss fourth quarter results is scheduled for today, March 25, 2010, at 9:00 AM Eastern Time. Those interested in participating in the call are invited to dial (877) 312-8622 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 United States 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 January 31, 2010 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

Thirteen
Weeks Ended

Thirteen
Weeks Ended

Fifty-Two
Weeks Ended

Fifty-Two
Weeks Ended

January 31,
2010
(unaudited)

February 1,
2009
(unaudited)

January 31,
2010

February 1,
2009

Net revenue $160,606 $103,921 $452,898 $353,488
Costs of goods sold 74,046 52,261 229,812 174,421
Gross profit 86,560 51,660 223,086 179,067
As a percent of net revenue 53.9% 49.7% 49.3% 50.7%
Selling, general and administrative expenses 44,929 31,214 136,161 118,098
As a percent of net revenue 28.0% 30.0% 30.1% 33.4%
Provision for impairment and lease exit costs 196 4,405 379 4,405
Income from operations 41,435 16,041 86,546 56,564
As a percent of net revenue 25.8% 15.4% 19.1% 16.02%
Other income, net 66 210 164 821
Income before income taxes 41,501 16,251 86,710 57,385
Provision for income taxes 13,050 5,313 28,429 16,884
Net income from continuing operations 28,451 10,938 58,281 40,501
Net loss from discontinued operations -- -- -- (1,138)
Net income $28,451 $10,938 $58,281 $39,363
Basic earnings (loss) per share:
Continuing operations $0.40 $0.16 $0.83 $0.59
Discontinued operations -- -- -- (0.02)
Net basic earnings per share $0.40 $0.16 $0.83 $0.57
Diluted earnings (loss) per share:
Continuing operations $0.40 $0.16 $0.82 $0.57
Discontinued operations -- -- -- (0.02)
Net diluted earnings per share $0.40 $0.16 $0.82 $0.55
Weighted-average outstanding:
Basic 70,400 68,207 70,251 68,711
Diluted 71,308 68,523 70,949 70,942

lululemon athletica inc.

Condensed Consolidated Balance Sheets

Expressed in thousands

January 31, 2010 February 1, 2009
ASSETS
Current assets
Cash and cash equivalents $159,573 $56,797
Inventories 44,070 52,051
Other current assets 12,767 8,140
Total current assets 216,410 116,988
Property and equipment, net 61,591 61,662
Intangible assets, net 8,050 8,160
Deferred income taxes and other assets 21,207 24,826
Total assets $307,258 $211,636
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $11,028 $5,269
Other current liabilities 39,908 37,933
Income taxes payable 7,742 2,133
Total current liabilities 58,678 45,335
Deferred income taxes and other non-current liabilities 15,472 11,459
Stockholders' equity 233,108 154,842
Total liabilities and stockholders' equity $307,258 $211,636
lululemon athletica inc.

Condensed Consolidated Statements of Cash Flows

Expressed in thousands

Fifty-Two Weeks Ended Fifty-Two Weeks Ended
January 31, 2010 February 1, 2009
Cash flows from operating activities
Net income from continuing operations $58,281 $40,501
Items not affecting cash 28,889 9,300
Other, including net changes in other non-cash balances 30,790 (3,363)
Net cash provided by operating activities 117,960 46,438
Net cash used in investing activities (16,307) (46,795)
Net cash (used in) provided by financing activities (2,649) 13,460
Effect of exchange rate changes on cash 3,772 (8,851)
Increase in cash and cash equivalents from continuing operations 102,776 4,252
Cash and cash equivalents from continuing operations, beginning of period 56,797 52,545
Cash and cash equivalents from continuing operations, end of period $159,573 $56,797
lululemon athletica inc.

Reconciliation of Non-GAAP Financial Measure

Constant-dollar changes

Thirteen Weeks Ended Thirteen Weeks Ended
January 31, 2010 February 1, 2009
% Change % Change
Comparable-store sales (GAAP) 42% (22)%
Increase (decrease) due to foreign exchange rate changes (13)% 14%
Comparable-store sales in constant dollars 29% (8)%

SOURCE: lululemon athletica inc.

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