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lululemon athletica inc. Announces Second Quarter Fiscal 2012 Results
For the thirteen weeks ended
-
Net revenue for the quarter increased 33% to
$282.6 million from$212.3 million in the second quarter of fiscal 2011. - Comparable stores sales for the second quarter increased by 15% on a constant dollar basis.
-
Direct to consumer revenue increased 91% to
$35.4 million , or 12.5% of total company revenues, in the second quarter of fiscal 2012, an increase from 8.8% of total company revenues in the second quarter of fiscal 2011. -
Gross profit for the quarter increased 28% to
$155.8 million , and as a percentage of net revenue gross profit was 55.1% for the quarter as compared to 57.5% in the second quarter of fiscal 2011. -
Income from operations for the quarter increased 18% to
$70.2 million , and as a percentage of net revenue was 24.8% as compared to 28.0% of net revenue in the second quarter of fiscal 2011. -
The effective tax rate for the second quarter of fiscal 2012 was 19.1%
after an adjustment of
$7.2 million , reversing taxes provided for in Q4 of fiscal 2011 through Q1 of fiscal 2012. This adjustment resulted from the finalization of management's review of the tax impact of intercompany pricing agreements entered into in Q4 of fiscal 2011. Normalized for this adjustment, the tax rate for the second quarter of fiscal 2012 was 29.2% compared to 35.7% in the second quarter of fiscal 2011. The tax rate in the second quarter of fiscal 2012 reflects the ongoing impact of the revised intercompany pricing agreements. -
Diluted earnings per share for the quarter were
$0.39 on net income of$57.2 million , compared to diluted earnings per share of$0.26 on net income of$38.4 million in the second quarter of fiscal 2011. Second quarter diluted earnings per share normalized for the tax adjustment were$0.34 and would have been$0.31 at our previously estimated effective tax rate of 36.5%.
For the twenty-six weeks ended
-
Net revenue for the first two quarters of fiscal 2012 increased 42% to
$568.3 million from$399.1 million in the same period of fiscal 2011. - Comparable stores sales for the first two quarters of fiscal 2012 increased by 20% on a constant dollar basis.
-
Direct to consumer revenue increased 128% to
$73.9 million , or 13.0% of total company revenues, in the first two quarters of fiscal 2012, an increase from 8.1% of total company revenues in the first two quarters of fiscal 2011. -
Gross profit for the first two quarters of fiscal 2012 increased 35%
to
$313.0 million , and as a percentage of net revenue gross profit was 55.1% for the first two quarters as compared to 58.1% in the same period of fiscal 2011. -
Income from operations for the first two quarters increased 29% to
$143.3 million , and as a percentage of net revenue was 25.2% as compared to 27.9% of net revenue in the same period of fiscal 2011. -
The effective tax rate for the first two quarters was 28.0% after an
adjustment of
$2.0 million , reversing taxes provided for in Q4 of fiscal 2011. This resulted from the finalization of management's review of the tax impact of intercompany pricing agreements entered into in Q4 of fiscal 2011. Normalized for this adjustment, the tax rate for the first two quarters of fiscal 2012 was 29.3% compared to 36.0% in the first two quarters of fiscal 2011. The tax rate for the first two quarters of fiscal 2012 reflects the ongoing impact of the revised intercompany pricing agreements. -
Diluted earnings per share for the first two quarters of fiscal 2012
were
$0.71 on net income of$103.9 million , compared to diluted earnings per share of$0.49 on net income of$71.8 million in the same period of fiscal 2011. First two quarters diluted earnings per share normalized for the tax adjustment were$0.70 and would have been$0.63 at our previously estimated effective tax rate of 36.5%.
The company ended the second quarter of fiscal 2012 with
Updated Outlook
For the third quarter of fiscal 2012, we expect net revenue to be in the
range of
For the full fiscal 2012, we now expect net revenue to be in the range
of
Conference Call Information
A conference call to discuss second quarter results is scheduled for
today,
About lululemon athletica inc.
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.
The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. For more information on this non-GAAP financial measure, please see the table captioned "Reconciliation of Non-GAAP Financial Measure — Constant dollar changes" included in the accompanying financial tables, which includes more detail on the GAAP financial measure that is most directly comparable to non-GAAP financial measures and the related reconciliations between these financial measures.
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: an economic
downturn or economic uncertainty in our key markets; increasing product
costs and decreasing selling prices; our inability to anticipate
consumer preferences and successfully develop and introduce new,
innovative and updated products; our inability to accurately forecast
customer demand for our products; our inability to manage our growth and
the increased complexity of our business effectively; the fluctuating
costs of raw materials; our reliance on and limited control over
third-party suppliers to provide fabrics for and to produce our
products; our highly competitive market and increasing competition; an
unforeseen disruption of our information systems; our inability to
deliver our products to the market and to meet customer expectations due
to problems with our distribution system; our inability to cancel store
leases if an existing or new store is not profitable; increasing labor
costs and other factors associated with the production of our products
in
lululemon athletica inc. |
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Thirteen |
Thirteen |
Twenty-Six |
Twenty-Six |
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Net revenue | $ | 282,634 | $ | 212,323 | $ | 568,333 | $ | 399,103 | ||||||||
Costs of goods sold | 126,879 | 90,256 | 255,314 | 167,310 | ||||||||||||
Gross profit | 155,755 | 122,067 | 313,019 | 231,793 | ||||||||||||
As a percent of net revenue | 55.1 | % | 57.5 | % | 55.1 | % | 58.1 | % | ||||||||
Selling, general and administrative expenses | 85,567 | 62,584 | 169,766 | 120,623 | ||||||||||||
As a percent of net revenue | 30.3 | % | 29.5 | % | 29.9 | % | 30.2 | % | ||||||||
Income from operations |
70,188 | 59,483 | 143,253 | 111,170 | ||||||||||||
As a percent of net revenue | 24.8 | % | 28.0 | % | 25.2 | % | 27.9 | % | ||||||||
Other income (expense), net | 1,166 | 597 | 2,076 | 1,501 | ||||||||||||
Income before provision for income taxes | 71,354 | 60,080 | 145,329 | 112,671 | ||||||||||||
Provision for income taxes | 13,652 | 21,462 | 40,653 | 40,537 | ||||||||||||
Net income | 57,702 | 38,618 | 104,676 | 72,134 | ||||||||||||
Net income attributable to non-controlling interest |
480 | 239 | 811 | 383 | ||||||||||||
Net income attributable to lululemon athletica inc. | $ | 57,222 | $ | 38,379 | $ | 103,865 | $ | 71,751 | ||||||||
Basic earnings per share | $ | 0.40 | $ | 0.27 | $ | 0.72 | $ | 0.50 | ||||||||
Diluted earnings per share | $ | 0.39 | $ | 0.26 | $ | 0.71 | $ | 0.49 | ||||||||
Basic weighted-average shares outstanding | 143,972 | 143,163 | 143,826 | 142,961 | ||||||||||||
Diluted weighted-average shares outstanding | 145,678 | 145,228 | 145,698 | 145,108 |
lululemon athletica inc. |
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(unaudited) | (audited) | ||||||||||
ASSETS | |||||||||||
Current assets | |||||||||||
Cash and cash equivalents | $ |
444,286 |
|
$ |
409,437 |
|
|||||
Inventories | 125,378 | 104,097 | |||||||||
Other current assets | 33,861 | 13,559 | |||||||||
Total current assets | 603,525 | 527,093 | |||||||||
Property and equipment, net | 181,122 | 162,941 | |||||||||
Goodwill and intangible assets, net | 30,893 | 31,872 | |||||||||
Deferred income taxes and other assets | 13,598 | 12,728 | |||||||||
Total assets | $ | 829,138 | $ | 734,634 | |||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||
Current liabilities | |||||||||||
Accounts payable | $ | 6,953 | $ | 14,536 | |||||||
Other current liabilities | 62,586 | 80,183 | |||||||||
Income taxes payable | 5,437 | 8,720 | |||||||||
Total current liabilities | 74,976 | 103,439 | |||||||||
Non-current liabilities | 27,817 | 25,014 | |||||||||
Stockholders' equity | 726,345 | 606,181 | |||||||||
Total liabilities and stockholders' equity | $ | 829,138 | $ | 734,634 |
lululemon athletica inc. |
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Twenty-Six Weeks Ended
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Twenty-Six Weeks Ended
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(unaudited) | (unaudited) | ||||||||||
Cash flows from operating activities | |||||||||||
Net income | $ | 104,676 | $ | 72,134 | |||||||
Items not affecting cash | 22,483 | 3,749 | |||||||||
Other, including net changes in other non-cash balances | (63,639 | ) | (56,354 | ) | |||||||
Net cash provided by operating activities | 63,520 | 19,529 | |||||||||
Net cash used in investing activities | (39,046 | ) | (87,324 | ) | |||||||
Net cash provided by financing activities | 10,470 | 12,095 | |||||||||
Effect of exchange rate changes on cash | (95 | ) | 4,142 | ||||||||
Increase (decrease) in cash and cash equivalents | 34,849 | (51,558 | ) | ||||||||
Cash and cash equivalents, beginning of period | $ | 409,437 | $ | 316,286 | |||||||
Cash and cash equivalents, end of period | $ | 444,286 | $ | 264,728 |
lululemon athletica inc. |
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Thirteen Weeks Ended |
Thirteen Weeks Ended |
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% Change | % Change | |||
Comparable-store sales (GAAP) | 13% | 25% | ||
Adjustments due to changes in foreign exchange rates | 2% | (5)% | ||
Comparable-store sales in constant dollars | 15% | 20% |
lululemon athletica inc. |
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Number of |
Number of |
Number of |
Number of |
|||||
1st Quarter | 174 | 6 | 0 | 180 | ||||
2nd Quarter | 180 | 9 | 0 | 189 | ||||
Total Gross |
|
|
Total Gross |
|||||
1st Quarter | 494 | 14 | 0 | 508 | ||||
2nd Quarter | 508 | 30 | 0 | 538 | ||||
1 Store count and square footage summary includes corporate-owned stores which are branded lululemon athletica and ivivva athletica.
2 Number of stores opened during the quarters which are branded lululemon athletica and ivivva athletica.
3 Gross square feet added/lost during the quarters includes net square foot additions for corporate-owned stores which have been renovated or relocated in the quarter.
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Source: lululemon athletica inc.
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