VANCOUVER, British Columbia--(BUSINESS WIRE)--
lululemon athletica inc. (NASDAQ: LULU; TSX: LLL) today announced
financial results for the three and nine months ended October 31,
2007.
For the three months ended October 31, 2007:
-- Net revenue increased 84% to $66.2 million from $36.0 million
for the third quarter of fiscal 2006. Net revenue from
corporate-owned stores was $59.9 million, an increase of 106%
from $29.1 million for the third quarter of fiscal 2006, with
comparable-store sales increasing 36% or 26% on a constant
dollar basis.
-- Gross profit as a percentage of net revenue increased 210
basis points to 54.2% of net revenue from 52.1% of net revenue
in the third quarter of fiscal 2006.
-- Income from operations was $11.8 million, or 17.9% of net
revenue, compared to $4.7 million, or 13.1% of net revenue, in
the third quarter of fiscal 2006.
-- Diluted earnings per share were $0.11 on net income of $7.6
million, compared to diluted earnings per share of $0.02 on
net income of $1.7 million in the third quarter of fiscal
2006.
For the nine months ended October 31, 2007:
-- Net revenue increased 75% to $169.6 million from $96.7 million
in the first nine months of fiscal 2006. Net revenue from
corporate-owned stores was $151.0 million, an increase of 93%
from $78.1 million for the same period in fiscal 2006, with
comparable-store sales increasing 30% or 24% on a constant
dollar basis.
-- Gross profit as a percentage of net revenue increased 210
basis points to 53.0% of net revenue from 50.9% of net revenue
in the first nine months of fiscal 2006.
-- Income from operations was $28.4 million, or 16.8% of net
revenue, compared to $14.0 million, or 14.5% of net revenue,
in the first nine months of fiscal 2006.
-- Diluted earnings per share were $0.23 on net income of $16.2
million, compared to diluted earnings per share of $0.10 on
net income of $6.8 million the first nine months of fiscal
2006.
Robert Meers, lululemon's CEO stated: "We are very pleased to have
delivered another quarter of strong sales and earnings growth. We
believe that our performance during the third quarter further
demonstrates that our innovative product offering, unique culture and
distinct community-based marketing approach creates brand loyalty and
continues to attract healthy and active-minded individuals to the
lululemon brand. Based on the strong results in both our comp stores
as well as our new stores, we are extremely excited about our future
growth prospects. "
Updated Guidance
For fiscal 2007, lululemon plans to open 27 new stores in North
America, including the 17 new stores opened in the first three
quarters. The Company expects to open the remaining 10 stores in the
fourth quarter of fiscal 2007 and continues to expect 30 to 35 new
store openings in fiscal 2008.
Based on results in the first nine months, and continued momentum
in the fourth quarter, the Company is raising its guidance for fiscal
2007 diluted EPS in the range of $0.40 to $0.42 from previous guidance
of $0.30 to $0.33. The new earnings guidance assumes comparable store
sales growth in the high 20's for the fiscal year, or in the low 20's
on a constant dollar basis. Diluted weighted average shares
outstanding are expected to be approximately 70.3 million for fiscal
2007. The Company's long-term annual financial targets include
comparable store sales growth in the high-single digit range, net
revenue growth of approximately 25% and diluted EPS growth in excess
of 25%. Commencing in 2008, we anticipate a normalized statutory tax
rate of approximately 34%.
Beginning with the current fiscal year, lululemon has changed its
fiscal year from the 12 months ending on January 31st of each year to
a 52/53 week fiscal year ending on the first Sunday following January
30th of each year. As a result, lululemon's 2007 fiscal year will end
of February 3, 2008 instead of January 31, 2008 and lululemon's fourth
quarter for fiscal 2007 will have three additional days. lululemon's
2008 fiscal year will begin on February 4, 2008 and end on February 1,
2009.
Conference Call Information
A conference call to discuss third quarter results is scheduled
for today, November 29, 2007, at 9:00 AM Eastern Time. Investors
interested in participating in the call are invited to dial
877-397-0298 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 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.
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," "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 locate 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
and other new markets; the possibility that we may not be able to
finance our growth and maintain sufficient levels of cash flow;
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
effectively market and maintain a positive brand image; the
possibility that we may not be able to maintain recent levels of
comparable store sales or average sales per square foot; the
possibility that we may not be able to continually innovate and
provide our consumers with improved products; and 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 filings with the Securities and Exchange Commission ("the
SEC"), including Risk Factors contained in our final prospectus
relating to our initial public offering filed included in our
Registration Statement on Form S-1 (file no. 333-142477) 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 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
Three Months Ended Nine Months Ended
October 31, October 31,
------------------------- --------------------------
2007 2006 2007 2006
------------ ------------ ------------- ------------
Net revenue $66,150,280 $35,967,615 $169,620,680 $96,668,633
Cost of goods
sold (including
stock-based
compensation of
$202,936,
$76,530,
$564,975 and
$240,589) 30,269,860 17,227,413 79,682,472 47,505,884
------------ ------------ ------------- ------------
Gross profit 35,880,420 18,740,202 89,938,208 49,162,749
54.2% 52.1% 53.0% 50.9%
Selling, general
and
administrative
expenses
(including
stock-based
compensation of
$1,643,161,
$530,310,
$4,249,647 and
$1,512,616) 24,050,692 14,045,858 61,490,822 35,118,960
------------ ------------ ------------- ------------
Income from
operations 11,829,728 4,694,344 28,447,386 14,043,789
Other expense
(income), net (418,938) (43,219) (596,401) (87,642)
------------ ------------ ------------- ------------
Income before
income taxes 12,248,666 4,737,563 29,043,787 14,131,431
Provision for
income tax 4,763,446 3,131,794 13,010,405 7,404,892
Non-controlling
interest (84,157) (58,138) (200,058) (58,138)
------------ ------------ ------------- ------------
Net income $ 7,569,377 $ 1,663,907 $ 16,233,440 $ 6,784,677
============ ============ ============= ============
Basic earnings
per share $ 0.11 $ 0.03 $ 0.25 $ 0.10
Diluted earnings
per share $ 0.11 $ 0.02 $ 0.23 $ 0.10
Basic weighted
average number
of shares
outstanding 67,476,972 65,225,819 65,981,081 65,168,542
============ ============ ============= ============
Diluted weighted
average number
of shares
outstanding 71,683,523 67,878,508 69,896,384 67,821,231
============ ============ ============= ============
lululemon athletica inc.
Condensed Consolidated Balance Sheets
Expressed in thousands of dollars
October 31, 2007 January 31, 2007
------------------------------------ ---------------- ----------------
(unaudited)
ASSETS
Current assets
Cash and cash equivalents $ 36,325 $ 16,029
Inventories 49,694 26,628
Other current assets 6,360 5,836
---------------- ----------------
Total current assets 92,379 48,493
Property and equipment, net 36,377 18,176
Intangible assets, net 7,774 2,140
Other assets 4,646 3,484
---------------- ----------------
Total assets $ 141,176 $ 72,293
================ ================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $ 12,605 $ 4,935
Other current liabilities 20,853 17,171
Income taxes payable 2,483 9,178
---------------- ----------------
Total current liabilities 35,941 31,284
Other liabilities 7,649 3,630
Stockholders' equity 97,586 37,379
---------------- ----------------
Total liabilities and stockholders'
equity $ 141,176 $ 72,293
================ ================
Source: lululemon athletica inc.