Company Achieves Cool Revenue Milestone Starting with a "B" and
having Nine Zeros
VANCOUVER, British Columbia--(BUSINESS WIRE)--
lululemon athletica inc. (NASDAQ:LULU) (TSX:LLL) today announced
financial results for the fourth quarter and fiscal year ended January
29, 2012.
Christine Day, lululemon's CEO, stated: "Reaching a billion dollars in
revenue is clearly an important milestone that as a company we can all
be very proud of. But far more important than the number itself are the
beliefs, values, culture and people that achieved it. We really are so
much more than our numbers; it is the everyday actions of our dedicated
team that translates into an unparalleled guest experience and allows us
to achieve our ultimate goal of elevating the world."
For the fourth quarter ended January 29, 2012:
-- Net revenue for the quarter increased 51.4% to $371.5 million from
$245.4 million in the fourth quarter of fiscal 2010.
-- Comparable stores sales for the fourth quarter increased by 26% on a
constant dollar basis.
-- Direct to consumer revenue increased 103.6% to $50.1 million, or 13.5%
of net revenue, in the fourth quarter of fiscal 2011, from 10.0% of net
revenue in the same period last year.
-- Gross profit for the quarter increased by 45.7% to $209.0 million, and
as a percentage of net revenue gross profit decreased to 56.3% for the
quarter from 58.5% in the fourth quarter of fiscal 2010.
-- Income from operations for the quarter increased by 62.8% to $116.1
million, and as a percentage of net revenue was 31.2% compared to 29.1%
of net revenue in the fourth quarter of fiscal 2010.
-- The tax rate for the quarter was 36.5% compared to 23.5% a year ago. The
change in rate resulted from the prior year revision to managements
plans for repatriation of unremitted earnings of the Canadian operating
subsidiary.
-- Presented on a post-split basis, diluted earnings per share for the
quarter were $0.51 on net income of $73.5 million, compared to diluted
earnings per share of $0.38 on net income of $54.8 million in the fourth
quarter of fiscal 2010.
For the fiscal year ended January 29, 2012:
-- Net revenue for the fiscal year increased 40.6% to $1.0 billion from
$711.7 million in fiscal 2010.
-- Comparable stores sales for fiscal 2011 increased by 20% on a constant
dollar basis, resulting in a record $2,004 annual sales per square foot
for comp stores as at January 29, 2012.
-- Direct to consumer revenue increased 85.4% to $106.3 million, or 10.6%
of net revenue in fiscal 2011, from 8.1% of net revenue in fiscal 2010.
-- Gross profit for fiscal 2011 increased by 44.1% to $569.3 million, from
$394.9 million in fiscal 2010. As a percentage of net revenue, gross
profit increased to 56.9% compared to 55.5% in fiscal 2010.
-- Income from operations increased by 59.1% to $287.0 million, from $180.4
million in fiscal 2010. As a percentage of net revenue, income from
operations increased to 28.7% compared to 25.3% of net revenue in fiscal
2010.
-- The tax rate for fiscal 2011 was 36.1% compared to 33.3% for fiscal
2010. The change in tax rate was due to the proportional increase of
taxable income in the United States compared to taxable income in
Canada.
-- Presented on a post-split basis, diluted earnings per share in fiscal
2011 increased 49.4% to $1.27 on net income of $184.1 million, compared
to diluted earnings per share of $0.85 on net income of $121.8 million
in fiscal 2010.
The Company ended fiscal 2011 with $409.4 million in cash and cash
equivalents compared to $316.3 million at the end of fiscal 2010.
Inventory at the end of fiscal 2011 totaled $104.1 million compared to
$57.5 million at the end of fiscal 2010. The Company ended the quarter
with 174 stores in North America and Australia.
Updated Outlook
For the first quarter of fiscal 2012, we expect net revenue to be in the
range of $265 million to $270 million based on a comparable-store sales
percentage increase in the low 20s on a constant-dollar basis. Diluted
earnings per share are expected to be in the range of $0.28 to $0.29 for
the quarter. This assumes 145.4 million diluted weighted-average shares
outstanding and a 36.5% tax rate.
For fiscal 2012, we expect net revenue to be in the range of $1.3
billion to $1.325 billion and diluted earnings per share are expected to
be in the range of $1.50 to $1.57 for the full year. This assumes a tax
rate of 36.5% and 145.6 million diluted weighted-average shares
outstanding.
Conference Call Information
A conference call to discuss fiscal 2011 results is scheduled for today,
March 22, 2012, at 9:00 a.m. Eastern time. Those interested in
participating in the call are invited to dial 1-877-303-3203
approximately 10 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
lululemon athletica (NASDAQ:LULU; TSX:LLL) is a yoga-inspired athletic
apparel company that creates components for people to live a long,
healthy and fun life. 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.
The presentation of this financial information is not intended to be
considered in isolation or as a substitute for, or superior to, the
financial information prepared and presented in accordance with GAAP.
For more information on this non-GAAP financial measure, please see the
table captioned "Reconciliation of Non-GAAP Financial Measure -- Constant
dollar changes" included in the accompanying financial tables, which
includes more detail on the GAAP financial measure that is most directly
comparable to non-GAAP financial measures and the related
reconciliations between these financial measures.
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: an economic
downturn or economic uncertainty in our key markets; increasing product
costs and decreasing selling prices; our inability to anticipate
consumer preferences and successfully develop and introduce new,
innovative and updated products; our inability to accurately forecast
customer demand for our products; our inability to manage our growth and
the increased complexity of our business effectively; the fluctuating
costs of raw materials; our reliance on and limited control over
third-party suppliers to provide fabrics for and to produce our
products; our highly competitive market and increasing competition; an
unforeseen disruption of our information systems; our inability to
deliver our products to the market and to meet customer expectations due
to problems with our distribution system; our inability to cancel store
leases if an existing or new store is not profitable; increasing labor
costs and other factors associated with the production of our products
in China; our inability to successfully open new store locations in a
timely manner; our failure to maintain the value and reputation of our
brand; our failure to comply with trade and other regulations; our
competitors manufacturing and selling products based on our fabrics and
manufacturing technology at lower prices than we can; our failure to
protect our intellectual property rights; and other risk factors
detailed in our Annual Report on Form 10-K for the fiscal year ended
January 29, 2012, 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 Weeks Weeks Weeks
Ended Ended Ended Ended
January 29, January 30, January 29, January 30,
2012 2011 2012 2011
(unaudited) (unaudited)
Net revenue $371,520$245,399$1,000,839$711,704
Costs of goods sold 162,502 101,939 431,569 316,757
----------- ----------- ----------- -----------
Gross profit 209,018 143,460 569,270 394,947
As a percent of net revenue 56.3% 58.5% 56.9% 55.5%
Selling, general and administrative expenses 92,951 71,483 282,312 212,784
As a percent of net revenue 25.0% 29.1% 28.2% 29.9%
Provision for impairment and lease exit costs – 679 – 1,772
----------- ----------- ----------- -----------
Income from operations 116,067 71,298 286,958 180,391
As a percent of net revenue 31.2% 29.1% 28.7% 25.3%
Other income (expense), net 380 542 2,500 2,886
----------- ----------- ----------- -----------
Income before provision for income taxes 116,447 71,840 289,458 183,277
Provision for income taxes 42,558 16,873 104,494 61,080
----------- ----------- ----------- -----------
Net Income 73,889 54,967 184,964 122,197
Net income attributable to non-controlling interest 371 201 901 350
----------- ----------- ----------- -----------
Net income attributable to lululemon athletica inc. $73,518$54,766$184,063$121,847
----------- ----------- ----------- -----------
Net Basic earnings per share $0.51$0.39$1.29$0.86
Net Diluted earnings per share $0.51$0.38$1.27$0.85
Basic weighted-average shares outstanding 143,501 142,174 143,196 141,720
Diluted weighted-average shares outstanding 145,344 144,362 145,278 143,858
lululemon athletica inc.
Condensed Consolidated Balance Sheets
Expressed in thousands
January 29, January 30,
2012 2011
----------- -----------
ASSETS
Current assets
Cash and cash equivalents $409,437$316,286
Inventories 104,097 57,469
Other current assets 13,559 15,524
----------- -----------
Total current assets 527,093 389,279
Property and equipment, net 162,941 70,954
Goodwill and intangible assets, net 31,872 27,112
Deferred income taxes and other assets 12,728 11,957
----------- -----------
Total assets $734,634$499,302
----------- -----------
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable $14,536$6,659
Other current liabilities 80,183 60,306
Income taxes payable 8,720 18,399
----------- -----------
Total current liabilities 103,439 85,364
Non-current liabilities 25,014 19,645
Stockholders’ equity 606,181 394,293
----------- -----------
Total liabilities and stockholders’ equity $734,634$499,302
----------- -----------
lululemon athletica inc.
Condensed Consolidated Statements of Cash Flows
Expressed in thousands
Fifty-Two Weeks Ended Fifty-Two Weeks Ended
January 29, 2012 January 30, 2011
--------------------- ---------------------
Cash flows from operating activities
Net income $184,964$122,197
Items not affecting cash 32,381 33,832
Other, including net changes in other non-cash balances (13,730) 23,966
--------------------- ---------------------
Net cash provided by operating activities 203,615 179,995
Net cash used in investing activities (122,311) (42,839)
Net cash provided by financing activities 15,364 13,699
Effect of exchange rate changes on cash (3,517) 5,858
--------------------- ---------------------
Increase in cash and cash equivalents 93,151 156,713
Cash and cash equivalents, beginning of year $316,286$159,573
--------------------- ---------------------
Cash and cash equivalents, end of year $409,437$316,286
--------------------- ---------------------
lululemon athletica inc.
Reconciliation of Non-GAAP Financial Measure
Constant-dollar changes
(unaudited)
Thirteen Weeks Thirteen Weeks
Ended Ended
January 29, 2012 January 30, 2011
---------------- ----------------
% Change % Change
---------------- ----------------
Comparable-store sales (GAAP) 25% 32%
Increase (decrease) due to foreign exchange rate changes 1% (4)%
---------------- ----------------
Comparable-store sales in constant dollars 26% 28%
lululemon athletica inc.
Store Count and Square Footage1
Year ended January 29, 2012
Square Footage Expressed in Thousands
Number of
Number of Stores Number of
Stores Open Opened / Stores Number of
at the Acquired Closed Stores Open
Beginning of During the During the at the End of
the Quarter Quarter2 Quarter the Quarter
------------ ------------ ------------ -------------
1st Quarter 133 5 0 138
2nd Quarter 138 9 0 147
3rd Quarter 147 18 0 165
4th Quarter 165 9 0 174
Total Gross
Square Feet Gross Square Gross Square Total Gross
at the Feet Added Feet Lost Square Feet
Beginning of During the During the at the End of
the Quarter Quarter2,3 Quarter2,3 the Quarter
------------ ------------ ------------ -------------
1st Quarter 374 12 0 386
2nd Quarter 386 31 1 416
3rd Quarter 416 56 2 470
4th Quarter 470 24 0 494
1 Store count and square footage summary includes
corporate-owned stores which are branded lululemon athletica and ivivva
athletica.
2 Number of stores opened during fiscal 2011 are branded
lululemon athletica and ivivva athletica and include four reacquired
franchise stores in the United States, in the third quarter.
3 Gross square feet added/lost during the quarter includes
net square foot additions for corporate-owned stores which have been
renovated or relocated in the quarter.
Source: lululemon athletica inc.