VANCOUVER, British Columbia--(BUSINESS WIRE)--
lululemon athletica inc. (NASDAQ: LULU; TSX: LLL) today announced
financial results for the quarter and fiscal year ended February 3,
2008.
For the quarter ended February 3, 2008:
-- Net revenue increased 101% to $105.1 million from $52.2
million for the fourth quarter of fiscal 2006. Net revenue
from corporate-owned stores was $92.5 million, an increase of
117% from $42.6 million for the fourth quarter of fiscal 2006,
with comparable-store sales increasing 41%, or 24% on a
constant dollar basis.
-- Gross profit as a percentage of net revenue increased 270
basis points to 54.1% of net revenue from 51.4% of net revenue
in the fourth quarter of fiscal 2006.
-- Income from operations was $21.7 million, or 20.6% of
revenues, compared to $2.2 million, or 4.2% of revenues, in
the fourth quarter of fiscal 2006.
-- Diluted earnings per share was $0.21 on net income of $14.6
million, compared to diluted earnings per share of $0.01 on
net income of $0.9 million in the fourth quarter of fiscal
2006. Excluding a one-time legal settlement expense, diluted
earnings per share for the fourth quarter of fiscal 2006 were
$0.05.
For the fiscal year ended February 3, 2008:
-- Net revenue increased 84% to $274.7 million from $148.9
million for the same period in fiscal 2006. Net revenue from
corporate-owned stores was $243.6 million, an increase of 102%
from $120.7 million for the same period in fiscal 2006, with
comparable-store sales increasing 34%, or 24% on a constant
dollar basis.
-- Gross profit as a percentage of net revenue increased 230
basis points to 53.3% of net revenue from 51.0% of net revenue
in the twelve months of fiscal 2006.
-- Income from operations was $50.1 million, or 18.2% of
revenues, compared to $16.2 million, or 10.9% of revenues, in
the twelve months of fiscal 2006.
-- Diluted earnings per share was $0.45 on net income of $30.8
million, compared to diluted earnings per share of $0.11 on
net income of $7.7 million for the same period in fiscal 2006.
Excluding a one-time charge for the settlement of a lawsuit,
diluted earnings per share for fiscal 2006 was $0.18.
Robert Meers, lululemon's CEO stated: "We are extremely pleased
with the accelerated growth of our fourth quarter results. We believe
that the strong momentum generated in 2007 puts us in great standing
for 2008. The Company will continue to deliver innovative performance
apparel, a distinctive store experience, and a community-based
marketing approach, focusing on U.S. expansion." Mr. Meers continued:
"While the current overall consumer environment may be challenging,
the increasing loyalty of our guests and our unique positioning in the
historically resilient active and healthy-lifestyle market, are
providing for continued acceptance of our brand."
Discontinuing Operations in Japan
The Company also announced today that it will be discontinuing its
operations in Japan. lululemon athletica opened its first store in
Japan in 2005 and has operated in Japan through a joint venture known
as lululemon Japan Inc. with Japanese apparel company, Descente, Ltd.,
since 2006. lululemon Japan Inc. currently has four stores.
Robert Meers, CEO of lululemon athletica commented, "Japan
represents less than 1.5% of our revenues but has been taking a
disproportionate amount of management time and attention over this
past year. After re-evaluating our operating performance in Japan and
our priorities, we have concluded our time, attention, and capital
resources are best spent focused on our top priorities which are
growth in the United States, where we plan to open 35 stores in 2008,
and the development of an e-commerce business."
lululemon athletica and Descente are working together to wind down
the store operations as soon as possible, with expected completion in
Q2 of 2008.
Fiscal Year 2008 Guidance
The Company has previously stated its long-term growth targets of
net revenue growth of approximately 25% and diluted EPS growth in
excess of 25%. The Company believes 2008 net revenues and diluted EPS
growth will exceed these long-term targets.
For fiscal 2008, diluted earnings per share are expected to be in
the range of $0.70 to $0.72. This guidance is based on anticipated
comparable store sales growth of low teens; or high single digits on a
constant dollar basis, and 35 planned new store openings in North
America. The Company expects an effective tax rate of approximately
33% for the full year and anticipates diluted weighted average shares
outstanding of approximately 71.0 million for 2008. This fiscal 2008
earnings guidance includes a charge of approximately $0.02 per share
resulting from the Company's planned closure of its four stores
currently operating in Japan.
In a separate news release, lululemon also today announced the
appointment of Christine Day, currently Executive Vice President of
Retail Operations, to the offices of President and COO and to the role
of CEO Designate. Ms. Day will be appointed CEO upon the retirement of
Bob Meers on June 30, 2008.
Conference Call Information
A conference call to discuss fourth quarter results is scheduled
for today, April 2, 2008, at 9:00 AM Eastern Time. Investors
interested in participating in the call are invited to dial (877)
397-0300 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 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, http://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, both in North America and
internationally, 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 identify 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 or in other markets,
or expand into new markets; the possibility that we may not be able to
finance our growth and maintain sufficient levels of cash flow;
increasing competition, which may cause us to reduce the prices of our
products or to increase significantly our marketing efforts 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 continually innovate and
provide our consumers with improved products; and other risk factors
detailed in our filings with the Securities and Exchange Commission,
including risk factors contained in our final prospectus relating to
our initial public offering included in our Registration Statement on
Form S-1 (file no. 333-142477) filed with the SEC and other filings we
make with the SEC. Our filings with the SEC are available at
www.sec.govhttp://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.
Exhibit (1)
lululemon athletica inc.
Condensed Consolidated Statements of Operations
Expressed in thousands of dollars except per share amounts
Three Three Twelve Twelve
Months Months Months Months
Ended Ended Ended Ended
January 31, February 3, January 31, February 3,
2007 2008 2007 2008
Net revenue $ 52,216 $ 105,093 $ 148,885 $ 274,713
Costs of goods
sold 25,395 48,273 72,903 128,411
------------ ------------ ------------ ------------
Gross Profit 26,821 56,820 75,982 146,302
As a percent of
revenues 51.4% 54.1% 51.0% 53.3%
Selling, general
and
administrative
expenses 24,656 35,143 59,767 96,177
As a percent of
revenues 47.2% 33.4% 40.1% 35.0%
------------ ------------ ------------ ------------
Income from
operations 2,165 21,676 16,213 50,125
As a percent of
revenues 4.2% 20.6% 10.9% 18.2%
Interest expense
(income), net (17) (258) (94) (854)
------------ ------------ ------------ ------------
Income before
income tax 2,182 21,935 16,307 50,979
Provision for
income taxes 1,349 7,460 8,753 20,471
Non-controlling
interest (54) (134) (112) (334)
------------ ------------ ------------ ------------
Net income $ 887 $ 14,609 $ 7,666 $ 30,842
============ ============ ============ ============
Earnings per
share:
Basic $ 0.01 $ 0.22 $ 0.12 $ 0.46
Diluted $ 0.01 $ 0.21 $ 0.11 $ 0.45
Weighted average
outstanding:
Basic 65,087,431 67,527,381 65,156,625 66,430,022
Diluted 65,087,431 70,629,927 69,728,162 69,297,878
Exhibit (2)
lululemon athletica inc.
Condensed Consolidated Balance Sheets
Expressed in thousands of dollars
January 31, 2007 February 3, 2008
----------------------------------- ---------------- ----------------
ASSETS
Current assets
Cash and cash equivalents $ 16,029 $ 53,339
Inventories 26,628 39,092
Other current assets 5,836 5,475
---------------- ----------------
Total current assets 48,493 97,906
Property and equipment, net 18,176 44,039
Goodwill and intangible assets, net 2,952 8,124
Other assets 2,672 5,023
---------------- ----------------
Total assets $ 72,293 $ 155,092
================ ================
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities
Accounts payable $ 4,935 $ 5,200
Other current liabilities 17,826 24,902
Income taxes payable 9,178 5,720
---------------- ----------------
Total current liabilities 31,939 35,822
Other non-current liabilities 2,975 7,236
Stockholders' equity 37,379 112,034
---------------- ----------------
Total liabilities and stockholders'
equity $ 72,293 $ 155,092
================ ================
Exhibit (3)
lululemon athletica inc.
Condensed Consolidated Cash Flow Statements
Expressed in thousands of dollars
Three Months Three Months Twelve Months Twelve Months
Ended Ended Ended Ended
January 31, February 3, January 31, February 3,
2007 2008 2007 2008
Cash flow from
operating
activities
Net income for
the year $ 887 $ 14,609 $ 7,666 $ 30,842
Items not
affecting cash:
Depreciation
and
amortization 1,666 2,847 4,619 8,341
Deferred
income tax (669) (195) (3,077) 1,799
Loss on
property &
equipment - - 230 -
Non-cash
compensation 886 1,132 2,830 5,947
Non-
controlling
interest (54) (134) (112) (334)
Changes in
non-cash
working
capital items 15,063 9,372 13,293 (8,504)
------------ ------------ ------------- -------------
17,779 27,631 25,449 38,091
Cash flows from
investing
activities
Purchase of
property and
equipment (3,711) (10,937) (12,838) (29,676)
Acquisition of
franchises - - (512) (5,559)
------------ ------------ ------------- -------------
(3,711) (10,937) (13,350) (35,235)
Cash flow from
financing
activities
Cash received on
exercise of
stock options - 54 - 54
Amounts received
from principal
stockholder
loan - - 222 -
Amounts received
from joint
venture partner - - - 564
Capital stock
issued for cash - - 446 38,350
IPO Costs - - - (6,992)
------------ ----------------------------------------
- 54 669 31,976
Effect of
exchange rate
changes on cash (1,522) 266 (616) 2,478
Increase in cash
and cash
equivalents 12,546 17,014 12,152 37,310
Cash and cash
equivalents,
beginning of
year 3,483 36,325 3,877 16,029
------------ ------------ ------------- -------------
Cash and cash
equivalents,
end of year $ 16,029 $ 53,339 $ 16,029 $ 53,339
------------ ------------ ------------- -------------
Source: lululemon athletica inc.