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lululemon athletica inc. Announces Third Quarter Fiscal 2011 Results
Third Quarter Net Revenue Increased 31% to
Third Quarter Diluted EPS of
For the thirteen weeks ended
-
Net revenue for the quarter increased 31% to
$230.2 million from$175.8 million in the third quarter of fiscal 2010. - Comparable stores sales for the third quarter increased by 16% on a constant dollar basis.
-
Direct to consumer revenue increased 71% to
$23.9 million , or 10.4% of total Company revenues, in the third quarter of fiscal 2011, an increase from 8.0% of total Company revenues in the third quarter of fiscal 2010. -
Gross profit for the quarter increased 33% to
$128.5 million , and as a percentage of net revenue gross profit increased to 55.8% for the quarter from 55.1% in the third quarter of fiscal 2010. -
Income from operations for the quarter increased 41% to
$59.7 million , and as a percentage of net revenue was 25.9% compared to 24.1% of net revenue in the third quarter of fiscal 2010. - The tax rate for the quarter was 35.5% compared to 38.9% a year ago. The decrease resulted from a revision to management's plans for repatriation of unremitted earnings of the Canadian operating subsidiary.
-
Presented on a post-split basis, diluted earnings per share for the
quarter were
$0.27 on net income of$38.8 million , compared to diluted earnings per share of$0.18 on net income of$25.7 million in the third quarter of fiscal 2010.
For the thirty-nine weeks ended
-
Net revenue for the first three quarters increased 35% to
$629.3 million from$466.3 million in the same period of fiscal 2010. - Comparable stores sales for the first three quarters increased by 18% on a constant dollar basis.
-
Direct to consumer revenue increased 72% to
$56.2 million , or 8.9% of total Company revenues, in the first three quarters of fiscal 2011, an increase from 7.0% of total Company revenues in the first three quarters of fiscal 2010. -
Gross profit for the quarter increased 43% to
$360.3 million , and as a percentage of net revenue gross profit increased to 57.2% for the first three quarters from 53.9% in the same period of fiscal 2010. -
Income from operations for the first three quarters increased 57% to
$170.9 million , and as a percentage of net revenue was 27.2% compared to 23.4% of net revenue in the same period of fiscal 2010. - The tax rate for the first three quarters was 35.8% compared to 39.7% a year ago. The decrease resulted from a revision to management's plans for repatriation of unremitted earnings of the Canadian operating subsidiary.
-
Presented on a post-split basis, diluted earnings per share for the
first three quarters were
$0.76 on net income of$110.5 million , compared to diluted earnings per share of$0.47 on net income of$67.1 million in the same period of fiscal 2010.
The Company ended the third quarter of fiscal 2011 with
Updated Outlook
For the fourth quarter of fiscal 2011, we expect net revenue to be in
the range of
Conference Call Information
A conference call to discuss third 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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Condensed Consolidated Statements of Operations |
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Expressed in thousands, except per share amounts |
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Thirteen |
Thirteen |
Thirty-nine |
Thirty-nine |
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October 30, |
October 31, |
October 30, |
October 31, |
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Net revenue | $ | 230,216 | $ | 175,800 | $ | 629,319 | $ | 466,305 | ||||||||||||||||
Costs of goods sold | 101,720 | 78,968 | 269,067 | 214,818 | ||||||||||||||||||||
Gross profit | 128,496 | 96,832 | 360,252 | 251,487 | ||||||||||||||||||||
As a percent of net revenue |
55.8 | % | 55.1 | % | 57.2 | % | 53.9 | % | ||||||||||||||||
Selling, general and administrative | ||||||||||||||||||||||||
expenses | 68,775 | 54,456 | 189,361 | 142,394 | ||||||||||||||||||||
As a percent of net revenue | 29.9 | % | 31.0 | % | 30.1 | % | 30.5 | % | ||||||||||||||||
Income from operations |
59,721 | 42,376 | 170,891 | 109,093 | ||||||||||||||||||||
As a percent of net revenue | 25.9 | % | 24.1 | % | 27.2 | % | 23.4 | % | ||||||||||||||||
Other income (expense), net | 619 | 91 | 2,120 | 2,345 | ||||||||||||||||||||
Income before provision for income | ||||||||||||||||||||||||
taxes | 60,340 | 42,467 | 173,011 | 111,438 | ||||||||||||||||||||
Provision for income taxes | 21,399 | 16,532 | 61,935 | 44,207 | ||||||||||||||||||||
Net income | 38,941 | 25,935 | 111,076 | 67,231 | ||||||||||||||||||||
Net income attributable to non- | ||||||||||||||||||||||||
controlling interest | 147 | 234 | 531 | 150 | ||||||||||||||||||||
Net income attributable to | ||||||||||||||||||||||||
lululemon athletica inc. | $ | 38,794 | $ | 25,701 | $ | 110,545 | $ | 67,081 | ||||||||||||||||
Basic earnings per share | $ | 0.27 | $ | 0.18 | $ | 0.77 | $ | 0.48 | ||||||||||||||||
Diluted earnings per share | $ | 0.27 | $ | 0.18 | $ | 0.76 | $ | 0.47 | ||||||||||||||||
Basic weighted-average shares | ||||||||||||||||||||||||
outstanding | 143,370 | 141,876 | 143,096 | 141,572 | ||||||||||||||||||||
Diluted weighted-average shares | ||||||||||||||||||||||||
outstanding | 145,349 | 143,670 | 145,230 | 143,564 | ||||||||||||||||||||
lululemon athletica inc. |
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Condensed Consolidated Balance Sheets |
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Expressed in thousands |
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(unaudited) | (audited) | |||||||||
ASSETS | ||||||||||
Current assets | ||||||||||
Cash and cash equivalents | $ | 276,946 | $ | 316,286 | ||||||
Inventories | 129,169 | 57,469 | ||||||||
Other current assets | 21,701 | 15,524 | ||||||||
Total current assets | 427,816 | 389,279 | ||||||||
Property and equipment, net | 153,119 | 70,954 | ||||||||
Goodwill and intangible assets, net | 32,351 | 27,112 | ||||||||
Deferred income taxes and other assets | 22,784 | 11,957 | ||||||||
Total assets | $ | 636,070 | $ | 499,302 | ||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||
Current liabilities | ||||||||||
Accounts payable | $ | 6,040 | $ | 6,659 | ||||||
Other current liabilities | 76,474 | 60,306 | ||||||||
Income taxes payable | - | 18,399 | ||||||||
Total current liabilities | 82,514 | 85,364 | ||||||||
Non-current liabilities | 24,466 | 19,645 | ||||||||
Stockholders' equity | 529,090 | 394,293 | ||||||||
Total liabilities and stockholders' equity | $ | 636,070 | $ | 499,302 |
lululemon athletica inc. | ||||||||||||
Condensed Consolidated Statements of Cash Flows |
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Expressed in thousands |
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Thirty-nine Weeks Ended | Thirty-nine Weeks Ended | |||||||||||
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(unaudited) | (unaudited) | |||||||||||
Cash flows from operating activities | ||||||||||||
Net income | $ | 111,076 | $ | 67,231 | ||||||||
Items not affecting cash | 12,564 | 36,201 | ||||||||||
Other, including net changes in other non-cash balances | (70,120 | ) | (15,515 | ) | ||||||||
Net cash provided by operating activities | 53,520 | 87,917 | ||||||||||
Net cash used in investing activities | (106,344 | ) | (34,433 | ) | ||||||||
Net cash provided by financing activities | 14,474 | 7,945 | ||||||||||
Effect of exchange rate changes on cash | (990 | ) | 3,773 | |||||||||
Increase (decrease) in cash and cash equivalents | (39,340 | ) | 65,202 | |||||||||
Cash and cash equivalents, beginning of period | $ | 316,286 | $ | 159,573 | ||||||||
Cash and cash equivalents, end of period | $ | 276,946 | $ | 224,775 | ||||||||
lululemon athletica inc. |
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Reconciliation of Non-GAAP Financial Measure |
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Constant-dollar changes |
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Thirteen Weeks Ended | Thirteen Weeks Ended | |||||||
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% Change | % Change | |||||||
Comparable-store sales (GAAP) | 18% | 32% | ||||||
Adjustments due to changes in foreign | ||||||||
exchange rates | (2)% | (3)% | ||||||
Comparable-store sales in constant dollars | 16% | 29% | ||||||
lululemon athletica inc. | ||||||||||||||||
Store Count and Square Footage1 |
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Quarter ended |
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Square Footage Expressed in Thousands |
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Number of | ||||||||||||||||
Number of | Stores | Number of | ||||||||||||||
Stores Open | Opened / | Stores | Number of | |||||||||||||
at the | Acquired | Closed | Stores Open | |||||||||||||
Beginning of | During the | During the | at the End | |||||||||||||
the Quarter | Quarter | Quarter | of the | |||||||||||||
Quarter | ||||||||||||||||
1st Quarter | 133 | 5 | 0 | 138 | ||||||||||||
2nd Quarter | 138 | 9 | 0 | 147 | ||||||||||||
3rd Quarter | 147 | 18 | 0 | 165 | ||||||||||||
Total Gross | ||||||||||||||||
Square Feet |
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Total Gross | |||||||||||||
at the | Feet Added | Feet Lost | Square Feet | |||||||||||||
Beginning of | During the | During the | at the End of | |||||||||||||
the Quarter |
Quarter2 |
Quarter2 |
the Quarter | |||||||||||||
1st Quarter | 374 | 12 | 0 | 386 | ||||||||||||
2nd Quarter | 386 | 31 | 1 | 416 | ||||||||||||
3rd Quarter | 416 | 56 | 2 | 470 | ||||||||||||
1 Store count and square footage summary includes corporate-owned stores which are branded lululemon athletica and ivivva athletica.
2 Gross square feet added/lost during the quarter includes net square foot additions for corporate-owned stores which have been renovated or relocated in the quarter.
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