Second Quarter Net Revenue Increases 14% to $97.7 Million
Second Quarter Diluted EPS of $0.13
VANCOUVER--(BUSINESS WIRE)--
lululemon athletica inc. [NASDAQ: LULU; TSX: LLL] today announced
financial results for the thirteen weeks ended August 2, 2009.
For the thirteen weeks ended August 2, 2009:
-- Net revenue increased 14% to $97.7 million from $85.5 million for the
second quarter of fiscal 2008. Net revenue from corporate-owned stores
was $85.1 million, an increase of 9% from $78.3 million for the second
quarter of fiscal 2008, with a comparable-store sales decline of 2% on a
constant-dollar basis compared to the second quarter of fiscal 2008.
-- Gross profit as a percentage of net revenue decreased to 46.2% from
51.9% of net revenue in the second quarter of fiscal 2008.
-- Income from operations was $14.3 million, or 14.7% of net revenue,
compared to $15.5 million, or 18.2% of net revenue, in the second
quarter of fiscal 2008.
-- Diluted earnings per share was $0.13 on net income of $9.2 million,
compared to diluted earnings per share of $0.16 on net income of $11.1
million in the second quarter of fiscal 2008.
For the twenty-six weeks ended August 2, 2009:
-- Net revenue increased 10% to $179.4 million from $162.4 million for the
same period of fiscal 2008. Net revenue from corporate-owned stores was
$158.0 million, an increase of 7% from $147.7 million for the same
period of fiscal 2008, with a comparable-store sales decline of 5% on a
constant-dollar basis compared to the first two quarters of fiscal 2008.
-- Gross profit as a percentage of net revenue decreased to 44.7% from
52.6% of net revenue in the first two quarters of fiscal 2008.
-- Income from operations was $24.2 million, or 13.5% of net revenue,
compared to $27.5 million, or 16.9% of net revenue, in the first two
quarters of fiscal 2008.
-- Diluted earnings per share was $0.22 on net income of $15.8 million,
compared to diluted earnings per share of $0.27 on net income of $19.6
million in the first two quarters of fiscal 2008.
The Company ended the quarter with $83.8 million in cash and cash
equivalents as compared to $56.8 million at the end of fiscal 2008.
Inventory at the end of the quarter totaled $46.5 million as compared to
$52.1 million at the end of fiscal 2008.
Christine Day, lululemon's CEO stated: "At the halfway mark of 2009, we
are very pleased with the improving sales momentum in our business,
which we believe demonstrates the power of our brand as well as our
innovative product offerings, effective market strategy and strength of
our management team. Our strong community relationships and focus on
healthy lives combined with a continuous flow of well designed,
functional, high-quality merchandise is creating a justifiable purchase
even to the cautious consumer." Ms. Day continued, "We were also able to
improve our gross margin sequentially over the first quarter. This
rebound was a result of better same-store sales, our enhanced systems,
and an operating model that is allowing us to operate with leaner
inventory and therefore gain market share without resorting to
markdowns."
Updated Guidance
For the third quarter of fiscal 2009 we expect comparable-store sales to
be relatively flat on a constant-dollar basis compared to the third
quarter of fiscal 2008. We anticipate reported net revenue to be in the
range of $95 million to $100 million for the quarter, and diluted
earnings per share in the range of $0.11 to $0.13 for the quarter. This
assumes a tax rate of 35% and 70.6 million diluted weighted-average
shares outstanding.
Conference Call Information
A conference call to discuss second quarter results is scheduled for
today, September 10, 2009, at 9:00 AM Eastern Time. Investors interested
in participating in the call are invited to dial (888) 417-8516
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 U.S. 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 February 1, 2009 and in our subsequent reports on Form 10-Q
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
(Unaudited)
Thirteen Thirteen Twenty-Six Twenty-Six
Weeks Ended Weeks Ended Weeks Ended Weeks Ended
August 2, 2009 August 3, 2008 August 2, 2009 August 3, 2008
Net revenue $97,721 $85,484 $179,401 $162,424
Costs of goods 52,557 41,108 99,213 76,947
sold
Gross profit 45,164 44,376 80,188 85,477
As a percent of 46.2% 51.9% 44.7% 52.6%
net revenue
Selling, general
and 30,832 28,832 56,003 57,987
administrative
expenses
As a percent of 31.6% 33.7% 31.2% 35.7%
net revenue
Income from 14,332 15,544 24,185 27,490
operations
As a percent of 14.7% 18.2% 13.5% 16.9%
net revenue
Other income, 23 211 101 489
net
Income before 14,355 15,755 24,286 27,979
income taxes
Provision for 5,111 3,415 8,524 7,169
income taxes
Net income from
continuing $9,244 $12,340 $15,762 $20,810
operations
Net loss from
discontinued -- (1,192) -- (1,186)
operations
Net income $9,244 $11,148 $15,762 $19,624
Basic earnings
(loss) per
share:
Continuing $0.13 $0.18 $0.22 $0.31
operations
Discontinued -- (0.02) -- (0.02)
operations
Net basic
earnings per $0.13 $0.16 $0.22 $0.29
share
Diluted earnings
(loss) per
share:
Continuing $0.13 $0.18 $0.22 $0.29
operations
Discontinued -- (0.02) -- (0.02)
operations
Net diluted
earnings per $0.13 $0.16 $0.22 $0.27
share
Weighted-average
outstanding:
Basic 69,948 68,107 70,176 67,892
Diluted 70,401 70,376 70,473 70,800
lululemon athletica inc.
Condensed Consolidated Balance Sheets
Expressed in thousands
August 2, 2009 February 1, 2009
(unaudited)
ASSETS
Current assets
Cash and cash equivalents $83,797 $56,797
Inventories 46,542 52,051
Other current assets 12,393 8,140
Total current assets 142,732 116,988
Property and equipment, net 61,265 61,662
Intangible assets, net 8,525 8,160
Deferred income taxes and other assets 13,304 24,826
Total assets $225,826 $211,636
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $3,073 $5,269
Other current liabilities 32,195 37,933
Income taxes payable -- 2,133
Total current liabilities 35,268 45,335
Deferred income taxes and other non-current 13,479 11,459
liabilities
Stockholders' equity 177,079 154,842
Total liabilities and stockholders' equity $225,826 $211,636
lululemon athletica inc.
Condensed Consolidated Statements of Cash Flows
Expressed in thousands
(Unaudited)
Twenty-six Twenty-six
Weeks Ended Weeks Ended
August 2, 2009 August 3, 2008
Cash flows from operating activities
Net income from continuing operations $15,762 $20,810
Items not affecting cash 12,886 5,876
Other, including net changes in other non-cash 482 (15,544)
balances
Net cash provided by operating activities 29,130 11,142
Net cash used by investing activities (6,303) (22,081)
Net cash provided by financing activities 171 2,994
Effect of exchange rate changes on cash 4,002 (865)
Increase (decrease) in cash and cash equivalents 27,000 (8,810)
from continuing operations
Cash and cash equivalents from continuing 56,797 52,545
operations, beginning of period
Cash and cash equivalents from continuing $83,797 $43,735
operations, end of period
lululemon athletica inc.
Reconciliation of Non-GAAP Financial Measure
Constant-dollar changes
Thirteen Weeks Ended Thirteen Weeks Ended
August 2, 2009 August 3, 2008
% Change % Change
Comparable-store sales (GAAP) (10)% 18%
Increase (decrease) due to foreign 8% (5)%
exchange rate changes
Comparable-store sales in constant (2)% 13%
dollars
Source: lululemon athletica inc.