First Quarter Net Revenue Increases 69% to $138.3 million
First Quarter Diluted EPS of $0.27
VANCOUVER, Canada--(BUSINESS WIRE)--
lululemon athletica inc. (NASDAQ:LULU; TSX:LLL) today announced
financial results for the first quarter ended May 2, 2010.
For the first quarter ended May 2, 2010:
-- Net revenue for the quarter increased 69.3% to $138.3 million from $81.7
million in the first quarter of fiscal 2009. Net revenue from
corporate-owned stores was $115.6 million for the quarter, an increase
of 58.5% from $72.9 million in the first quarter of fiscal 2009, and
comparable-store sales increased by 35% on a constant-dollar basis.
-- Gross profit for the quarter increased by 112.3% to $74.4 million, and
as a percentage of net revenue gross profit increased to 53.8% for the
quarter from 42.9% in the first quarter of fiscal 2009.
-- Income from operations for the quarter increased by 229.6% to $32.5
million, and as a percentage of net revenue was 23.5% compared to 12.1%
of net revenue in the first quarter of fiscal 2009.
-- Diluted earnings per share for the quarter was $0.27 on net income of
$19.6 million, compared to diluted earnings per share of $0.09 on net
income of $6.5 million in the first quarter of fiscal 2009.
-- The tax rate for the quarter was 40.0% versus 34.4% a year ago. The tax
rate has been increased to take into account the additional future
income tax liability which could arise on repatriation of excess
unremitted earnings of the Canadian operating subsidiary.
The Company ended the first quarter of fiscal 2010 with $173.6 million
in cash and cash equivalents compared to $59.3 million at the end of the
first quarter of fiscal 2009. Inventory at the end of the first quarter
of fiscal 2010 totaled $50.8 million compared to $44.6 million at the
end of the first quarter of fiscal 2009.
Christine Day, lululemon's CEO stated: "This was our company's best-ever
first quarter as we were able to generate very strong same store sales
growth in both the U.S. and Canada. In the first quarter, we saw our
trailing 12 month average sales per square foot reach $1,428, an
improvement from last quarter's $1,318."
Updated Outlook
The previous outlook had reflected a tax rate of 35%. Consistent with
the adjustment to the tax rate in the first quarter of fiscal 2010 the
updated outlook assumes a tax rate of 40% for fiscal 2010.
For the second quarter of fiscal 2010, we expect net revenue to be in
the range of $140 million to $145 million based on a comparable-store
sales percentage increase in the mid 20s on a constant-dollar basis.
Diluted earnings per share are expected to be in the range of $0.21 to
$0.23 for the quarter. This assumes 72.1 million diluted
weighted-average shares outstanding.
For the full fiscal 2010, we now expect net revenue to be in the range
of $620 million to $635 million and diluted earnings per share are
expected to be in the range of $1.05 to $1.10 for the full year. This
assumes 72.2 million diluted weighted-average shares outstanding.
Conference Call Information
A conference call to discuss first quarter results is scheduled for
today, June 10, 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 Weeks Ended Thirteen Weeks Ended
May 2, 2010 May 3, 2009
(unaudited) (unaudited)
Net revenue $ 138,297 $ 81,680
Costs of goods sold 63,940 46,656
Gross profit 74,357 35,024
As a percent of net revenue 53.8 % 42.9 %
Selling, general and administrative 41,883 25,171
expenses
As a percent of net revenue 30.3 % 30.8 %
Income from operations 32,474 9,853
As a percent of net revenue 23.5 % 12.1 %
Other income (expense), net 161 78
Income before provision for income 32,635 9,931
taxes
Provision for income taxes 13,047 3,413
Net income $ 19,588 $ 6,518
Basic earnings per share $ 0.28 $ 0.09
Diluted earnings per share $ 0.27 $ 0.09
Basic weighted-average shares 70,599 70,131
outstanding
Diluted weighted-average shares 71,582 70,331
outstanding
lululemon athletica inc.
Condensed Consolidated Balance Sheets
Expressed in thousands
May 2, 2010 May 3, 2009
ASSETS
Current assets
Cash and cash equivalents $ 173,640 $ 59,271
Inventories 50,750 44,635
Other current assets 15,053 10,003
Total current assets 239,443 113,909
Property and equipment, net 63,844 60,960
Intangible assets, net 8,096 8,166
Deferred income taxes and other assets 21,707 24,751
Total assets $ 333,090 $ 207,786
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $ 8,019 $ 5,218
Other current liabilities 36,817 22,157
Income taxes payable 1,961 --
Total current liabilities 46,797 27,375
Deferred income taxes and other non-current 18,504 12,141
liabilities
Stockholders' equity 267,796 168,270
Total liabilities and stockholders' equity $ 333,090 $ 207,786
lululemon athletica inc.
Condensed Consolidated Statements of Cash Flows
Expressed in thousands
Thirteen Weeks Ended Thirteen Weeks Ended
May 2, 2010 May 3, 2009
Cash flows from operating activities
Net income $ 19,588 $ 6,518
Items not affecting cash 9,026 5,963
Other, including net changes in (16,042 ) (9,662 )
other non-cash balances
Net cash provided by operating 12,572 2,819
activities
Net cash used in investing (6,157 ) (2,555 )
activities
Net cash provided by financing 4,982 350
activities
Effect of exchange rate changes on 2,670 1,860
cash
Increase in cash and cash 14,067 2,474
equivalents
Cash and cash equivalents, beginning $ 159,573 $ 56,797
of period
Cash and cash equivalents, end of $ 173,640 $ 59,271
period
lululemon athletica inc.
Reconciliation of Non-GAAP Financial Measure
Constant-dollar changes
Thirteen Weeks Ended Thirteen Weeks Ended
May 2, 2010 May 3, 2009
% Change % Change
Comparable-store sales (GAAP) 51 % (21 )%
Increase (decrease) due to foreign (16 )% 13 %
exchange rate changes
Comparable-store sales in constant 35 % (8 )%
dollars
Source: lululemon athletica inc.