Fourth Quarter Net Revenue Increases 55% to $160.6 million
Fourth Quarter Diluted EPS of $0.40
Full Year Diluted EPS increases 49% to $0.82
VANCOUVER--(BUSINESS WIRE)--
lululemon athletica inc. [NASDAQ: LULU; TSX: LLL] today announced
financial results for the fourth quarter and fiscal year ended January
31, 2010.
For the fourth quarter ended January 31, 2010:
-- Net revenue for the quarter increased 54.5% to $160.6 million from
$103.9 million in the fourth quarter of fiscal 2008. Net revenue from
corporate-owned stores was $137.4 million for the quarter, an increase
of 52.2% from $90.3 million in the fourth quarter of fiscal 2008, and
comparable-store sales increased by 29% on a constant-dollar basis.
-- Gross profit for the quarter increased by 67.6% to $86.6 million, and as
a percentage of net revenue gross profit increased to 53.9% for the
quarter from 49.7% in the fourth quarter of fiscal 2008.
-- Income from operations for the quarter increased by 158.3% to $41.4
million, and as a percentage of net revenue was 25.8% compared to 15.4%
of net revenue in the fourth quarter of fiscal 2008, which included a
$4.4 million ($0.04 per share) asset impairment charge related to store
assets and lease exit costs.
-- Diluted earnings per share for the quarter was $0.40 on net income of
$28.5 million, compared to diluted earnings per share of $0.16 on net
income of $10.9 million in the fourth quarter of fiscal 2008. The tax
rate for the quarter was 31.4% versus 32.7% a year ago.
For the fiscal year ended January 31, 2010:
-- Net revenue for the fiscal year increased 28.1% to $452.9 million from
$353.5 million in fiscal 2008. Net revenue from corporate-owned stores
was $393.5 million, an increase of 24.7% from $315.5 million in fiscal
2008, and comparable-store sales increased by 9% on a constant-dollar
basis.
-- Gross profit for the fiscal year as a percentage of net revenue
decreased to 49.3% from 50.7% of net revenue in fiscal 2008.
-- Income from operations for the fiscal year increased by 53.0% to $86.5
million, and as a percentage of net revenue was 19.1% compared to 16.0%
of net revenue in the fourth quarter of fiscal 2008, which included a
$4.4 million asset impairment charge related to store assets and lease
exit costs.
-- Diluted earnings per share for the fiscal year was $0.82 on net income
of $58.3 million, compared to diluted earnings per share of $0.55 on net
income of $39.4 million in fiscal 2008.
The Company ended fiscal 2009 with $159.6 million in cash and cash
equivalents compared to $56.8 million at the end of fiscal 2008.
Inventory at the end of fiscal 2009 totaled $44.1 million compared to
$52.1 million at the end of fiscal 2008.
Christine Day, lululemon's CEO stated: "We are very pleased with
the growing sales momentum in our business which has accelerated as the
economy has improved and with some of our key initiatives which have
taken hold, such as expanding our running line, elevated product to give
more value to our customers, and our e-commerce launch. Our 29%
comparable-store sales increase reflects the strength of the lululemon
brand driven by our quality, design, product innovation and unique
positioning."
Updated Outlook
For the first quarter of fiscal 2010, we expect net revenue to be in
the range of $125 million to $130 million based on a comparable-store
sales increase in the upper 20% range on a constant-dollar basis.
Diluted earnings per share are expected to be in the range of $0.18 to
$0.20 for the quarter. This assumes a tax rate of 35% and 71.7 million
diluted weighted-average shares outstanding.
For fiscal 2010, we expect net revenue to be in the range of $570
million to $585 million and diluted earnings per share are expected to
be in the range of $1.00 to $1.05 for the full year. This assumes a tax
rate of 35% and 72.5 million diluted weighted-average shares outstanding.
Conference Call Information
A conference call to discuss fourth quarter results is scheduled for
today, March 25, 2010, at 9:00 AM Eastern Time. Those interested in
participating in the call are invited to dial (877) 312-8622
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 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.
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 January 31, 2010 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
Thirteen Thirteen Fifty-Two Fifty-Two
Weeks Ended Weeks Ended Weeks Ended Weeks Ended
January 31, February 1, January 31, February 1,
2010 2009 2010 2009
(unaudited) (unaudited)
Net revenue $160,606 $103,921 $452,898 $353,488
Costs of goods sold 74,046 52,261 229,812 174,421
Gross profit 86,560 51,660 223,086 179,067
As a percent of net revenue 53.9% 49.7% 49.3% 50.7%
Selling, general and 44,929 31,214 136,161 118,098
administrative expenses
As a percent of net revenue 28.0% 30.0% 30.1% 33.4%
Provision for impairment and 196 4,405 379 4,405
lease exit costs
Income from operations 41,435 16,041 86,546 56,564
As a percent of net revenue 25.8% 15.4% 19.1% 16.02%
Other income, net 66 210 164 821
Income before income taxes 41,501 16,251 86,710 57,385
Provision for income taxes 13,050 5,313 28,429 16,884
Net income from continuing 28,451 10,938 58,281 40,501
operations
Net loss from discontinued -- -- -- (1,138)
operations
Net income $28,451 $10,938 $58,281 $39,363
Basic earnings (loss) per
share:
Continuing operations $0.40 $0.16 $0.83 $0.59
Discontinued operations -- -- -- (0.02)
Net basic earnings per share $0.40 $0.16 $0.83 $0.57
Diluted earnings (loss) per
share:
Continuing operations $0.40 $0.16 $0.82 $0.57
Discontinued operations -- -- -- (0.02)
Net diluted earnings per $0.40 $0.16 $0.82 $0.55
share
Weighted-average
outstanding:
Basic 70,400 68,207 70,251 68,711
Diluted 71,308 68,523 70,949 70,942
lululemon athletica inc.
Condensed Consolidated Balance Sheets
Expressed in thousands
January 31, 2010 February 1, 2009
ASSETS
Current assets
Cash and cash equivalents $159,573 $56,797
Inventories 44,070 52,051
Other current assets 12,767 8,140
Total current assets 216,410 116,988
Property and equipment, net 61,591 61,662
Intangible assets, net 8,050 8,160
Deferred income taxes and other assets 21,207 24,826
Total assets $307,258 $211,636
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $11,028 $5,269
Other current liabilities 39,908 37,933
Income taxes payable 7,742 2,133
Total current liabilities 58,678 45,335
Deferred income taxes and other non-current 15,472 11,459
liabilities
Stockholders' equity 233,108 154,842
Total liabilities and stockholders' equity $307,258 $211,636
lululemon athletica inc.
Condensed Consolidated Statements of Cash Flows
Expressed in thousands
Fifty-Two Weeks Ended Fifty-Two Weeks Ended
January 31, 2010 February 1, 2009
Cash flows from operating
activities
Net income from continuing $58,281 $40,501
operations
Items not affecting cash 28,889 9,300
Other, including net changes in 30,790 (3,363)
other non-cash balances
Net cash provided by operating 117,960 46,438
activities
Net cash used in investing (16,307) (46,795)
activities
Net cash (used in) provided by (2,649) 13,460
financing activities
Effect of exchange rate changes on 3,772 (8,851)
cash
Increase in cash and cash
equivalents from continuing 102,776 4,252
operations
Cash and cash equivalents from
continuing operations, beginning 56,797 52,545
of period
Cash and cash equivalents from
continuing operations, end of $159,573 $56,797
period
lululemon athletica inc.
Reconciliation of Non-GAAP Financial Measure
Constant-dollar changes
Thirteen Weeks Ended Thirteen Weeks Ended
January 31, 2010 February 1, 2009
% Change % Change
Comparable-store sales (GAAP) 42% (22)%
Increase (decrease) due to foreign (13)% 14%
exchange rate changes
Comparable-store sales in constant 29% (8)%
dollars
Source: lululemon athletica inc.