VANCOUVER, British Columbia
--(BUSINESS WIRE)--
lululemon athletica inc.
(NASDAQ:LULU) (TSX:LLL) today announced
financial results for the third quarter ended
October 28, 2012
.
For the thirteen weeks ended
October 28, 2012
:
-
Net revenue for the quarter increased 37% to
$316.5 million
from
$230.2 million
in the third quarter of fiscal 2011.
-
Comparable stores sales for the third quarter increased by 18% on a
constant dollar basis.
-
Direct to consumer revenue increased 89% to
$45.1 million
, or 14.3% of
total Company revenues, in the third quarter of fiscal 2012, an
increase from 10.4% of total Company revenues in the third quarter of
fiscal 2011.
-
Gross profit for the quarter increased 36% to
$175.3 million
, and as a
percentage of net revenue gross profit decreased to 55.4% for the
quarter from 55.8% in the third quarter of fiscal 2011.
-
Income from operations for the quarter increased 35% to
$80.6 million
,
and as a percentage of net revenue was 25.5% compared to 25.9% of net
revenue in the third quarter of fiscal 2011.
-
The tax rate for the quarter was 30.1% compared to 35.5% a year ago.
The lower effective rate reflects the ongoing impact of revised
intercompany pricing agreements.
-
Diluted earnings per share for the quarter were
$0.39
on net income of
$57.3 million
, compared to diluted earnings per share of
$0.27
on net
income of
$38.8 million
in the third quarter of fiscal 2011.
For the thirty-nine weeks ended
October 28, 2012
:
-
Net revenue for the first three quarters increased 41% to
$884.9
million
from
$629.3 million
in the same period of fiscal 2011.
-
Comparable stores sales for the first three quarters increased by 19%
on a constant dollar basis.
-
Direct to consumer revenue increased 112% to
$119.0 million
, or 13.4%
of total Company revenues, in the first three quarters of fiscal 2012,
an increase from 8.9% of total Company revenues in the first three
quarters of fiscal 2011.
-
Gross profit for the first three quarters increased 36% to
$488.3
million
, and as a percentage of net revenue gross profit decreased to
55.2% for the first three quarters from 57.3% in the same period of
fiscal 2011.
-
Income from operations for the first three quarters increased 31% to
$223.9 million
, and as a percentage of net revenue was 25.3% compared
to 27.2% of net revenue in the same period of fiscal 2011.
-
The tax rate for the first three quarters was 28.7% compared to 35.8%
a year ago. The lower effective rate reflects the ongoing impact of
revised intercompany pricing agreements.
-
Diluted earnings per share for the first three quarters were
$1.11
on
net income of
$161.2 million
, compared to diluted earnings per share
of
$0.76
on net income of
$110.5 million
in the same period of fiscal
2011.
The Company ended the third quarter of fiscal 2012 with
$439.4 million
in cash and cash equivalents compared to
$276.9 million
at the end of
the third quarter of fiscal 2011. Inventory at the end of the third
quarter of fiscal 2012 totaled
$164.7 million
compared to
$129.2 million
at the end of the third quarter of fiscal 2011. The Company ended the
quarter with 201 stores in
North America
and
Australia
.
Christine Day
, lululemon’s CEO stated: “I am very proud of the team for
achieving yet another strong quarter coming in ahead of our
expectations. Our stellar results were driven by first-rate execution,
strong community engagement, beautiful product and continued strength in
our ecommerce business.”
Updated Outlook
For the fourth quarter of fiscal 2012, we expect net revenue to be in
the range of
$475 million to $480 million
based on a comparable-store
sales percentage increase in the high single digits on a constant-dollar
basis. Diluted earnings per share are expected to be in the range of
$0.71 to $0.73
for the quarter. This assumes 145.9 million diluted
weighted-average shares outstanding and a 29.4% tax rate.
For the full fiscal 2012, we now expect net revenue to be in the range
of
$1.360 billion to $1.365 billion
and diluted earnings per share are
expected to be in the range of
$1.81 to $1.83
for the full year. This
assumes 145.8 million diluted weighted-average shares outstanding and a
tax rate of 29.0%.
Conference Call Information
A conference call to discuss third quarter results is scheduled for
today,
December 6, 2012
, at
9:00 a.m. EST
. 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 inc.
lululemon athletica
(NASDAQ:LULU; TSX:LLL) is a yoga-inspired athletic
apparel company that creates components for people to live long, healthy
and 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.
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 laws related to our human resources
policies or other procedures; 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
Weeks Ended
|
|
Thirteen
Weeks Ended
|
|
Thirty-nine
Weeks Ended
|
|
Thirty-nine
Weeks Ended
|
|
October 28,
2012
(unaudited)
|
October 30,
2011
(unaudited)
|
|
October 28,
2012
(unaudited)
|
|
October 30,
2011
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
Net revenue
|
|
$316,537
|
|
$230,216
|
|
$884,869
|
|
$629,319
|
|
|
|
|
|
|
|
|
|
|
Costs of goods sold
|
|
141,237
|
|
101,703
|
|
396,550
|
|
269,013
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
175,300
|
|
128,513
|
|
488,319
|
|
360,306
|
| As a percent of net revenue |
|
55.4% |
|
55.8% |
|
55.2% |
|
57.3% |
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expenses
|
|
94,689
|
|
68,792
|
|
264,455
|
|
189,415
|
| As a percent of net revenue |
|
29.9% |
|
29.9% |
|
29.9% |
|
30.1% |
|
Income from operations
|
|
80,611
|
|
59,721
|
|
223,864
|
|
170,891
|
| As a percent of net revenue |
|
25.5% |
|
25.9% |
|
25.3% |
|
27.2% |
|
|
|
|
|
|
|
|
|
|
Other income (expense), net
|
|
1,424
|
|
619
|
|
3,500
|
|
2,120
|
|
|
|
|
|
|
|
|
|
|
Income before provision for income taxes
|
|
82,035
|
|
60,340
|
|
227,364
|
|
173,011
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes
|
|
24,655
|
|
21,399
|
|
65,308
|
|
61,935
|
|
Net income
|
|
57,380
|
|
38,941
|
|
162,056
|
|
111,076
|
|
Net income attributable to non-controlling interest
|
|
64
|
|
147
|
|
875
|
|
531
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to lululemon athletica inc.
|
|
$57,316
|
|
$38,794
|
|
$161,181
|
|
$110,545
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share
|
|
$0.40
|
|
$0.27
|
|
$1.12
|
|
$0.77
|
|
Diluted earnings per share
|
|
$0.39
|
|
$0.27
|
|
$1.11
|
|
$0.76
|
|
|
|
|
|
|
|
|
|
|
Basic weighted-average shares outstanding
|
|
144,057
|
|
143,370
|
|
143,903
|
|
143,096
|
|
Diluted weighted-average shares outstanding
|
|
145,748
|
|
145,349
|
|
145,750
|
|
145,230
|
| lululemon athletica inc. |
Condensed Consolidated Balance Sheets |
Expressed in thousands |
|
|
|
|
|
|
|
October 28, 2012
|
|
January 29, 2012
|
|
|
(unaudited)
|
|
(audited)
|
| ASSETS |
|
|
|
|
|
Current assets
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
439,423
|
|
|
$
|
409,437
|
|
|
Inventories
|
|
|
164,726
|
|
|
|
104,097
|
|
|
Other current assets
|
|
|
36,935
|
|
|
|
13,559
|
|
|
|
|
|
|
|
|
|
|
|
Total current assets
|
|
|
641,084
|
|
|
|
527,093
|
|
|
|
|
|
|
|
Property and equipment, net
|
|
|
204,052
|
|
|
|
162,941
|
|
|
|
|
|
|
|
Goodwill and intangible assets, net
|
|
|
30,530
|
|
|
|
31,872
|
|
|
|
|
|
|
|
Deferred income taxes and other assets
|
|
|
13,115
|
|
|
|
12,728
|
|
|
Total assets
|
|
$
|
888,781
|
|
|
$
|
734,634
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
Accounts payable
|
|
$
|
6,569
|
|
|
$
|
14,536
|
|
|
Other current liabilities
|
|
|
77,790
|
|
|
|
80,183
|
|
|
Income taxes payable
|
|
|
6,831
|
|
|
|
8,720
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
91,190
|
|
|
|
103,439
|
|
|
|
|
|
|
|
Non-current liabilities
|
|
|
29,770
|
|
|
|
25,014
|
|
|
|
|
|
|
|
Stockholders’ equity
|
|
|
767,821
|
|
|
|
606,181
|
|
|
Total liabilities and stockholders’ equity
|
|
$
|
888,781
|
|
|
$
|
734,634
|
|
| lululemon athletica inc. |
Condensed Consolidated Statements of Cash Flows |
Expressed in thousands |
|
|
|
|
|
|
|
|
|
|
|
Thirty-nine Weeks Ended
October 28, 2012
|
|
Thirty-nine Weeks Ended
October 30, 2011
|
|
|
|
|
(unaudited)
|
|
(unaudited)
|
|
Cash flows from operating activities
|
|
|
|
|
|
|
|
Net income
|
|
|
|
$
|
162,056
|
|
|
$
|
111,076
|
|
|
Items not affecting cash
|
|
|
|
|
35,271
|
|
|
|
12,564
|
|
|
Other, including net changes in other non-cash balances
|
|
|
|
|
(84,087
|
)
|
|
|
(70,120
|
)
|
|
Net cash provided by operating activities
|
|
|
|
|
113,240
|
|
|
|
53,520
|
|
|
Net cash used in investing activities
|
|
|
|
|
(72,041
|
)
|
|
|
(106,344
|
)
|
|
|
|
|
|
|
|
|
Net cash (used in) provided by financing activities
|
|
|
|
|
(11,863
|
)
|
|
|
14,474
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash
|
|
|
|
|
650
|
|
|
|
(990
|
)
|
|
|
|
|
|
|
|
|
Increase (decrease) in cash and cash equivalents
|
|
|
|
|
29,986
|
|
|
|
(39,340
|
)
|
|
Cash and cash equivalents, beginning of period
|
|
|
|
$
|
409,437
|
|
|
$
|
316,286
|
|
|
Cash and cash equivalents, end of period
|
|
|
|
$
|
439,423
|
|
|
$
|
276,946
|
|
| lululemon athletica inc. |
Reconciliation of Non-GAAP Financial Measure |
Constant-dollar changes |
|
|
|
|
|
|
|
Thirteen Weeks Ended
October 28, 2012
|
|
Thirteen Weeks Ended
October 30, 2011
|
|
|
% Change |
|
% Change |
|
Comparable-store sales (GAAP)
|
|
18%
|
|
18%
|
|
|
|
|
|
|
Adjustments due to changes in foreign exchange rates
|
|
0%
|
|
(2)%
|
|
|
|
|
|
|
Comparable-store sales in constant dollars
|
|
18%
|
|
16%
|
| lululemon athletica inc. |
Store Count and Square Footage1 |
Thirty-Nine Weeks Ended October 28, 2012 |
Square Footage Expressed in Thousands |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
Stores Open
at the
Beginning
of
the Quarter
|
|
|
Number of
Stores
Opened /
Acquired
During
the
Quarter2
|
|
|
Number of
Stores
Closed
During
the
Quarter
|
|
|
Number of
Stores Open
at the End of
the
Quarter
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1st Quarter
|
|
|
|
174
|
|
|
6
|
|
|
0
|
|
|
180
|
|
2nd Quarter
|
|
|
|
180
|
|
|
9
|
|
|
0
|
|
|
189
|
|
3rd Quarter
|
|
|
|
189
|
|
|
12
|
|
|
0
|
|
|
201
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Gross
Square Feet
at the
Beginning
of
the Quarter
|
|
|
Gross Square
Feet Added
During the
Quarter2,3
|
|
|
Gross Square
Feet Lost
During the
Quarter2,3
|
|
|
Total Gross
Square Feet
at the End of
the
Quarter
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1st Quarter
|
|
|
|
494
|
|
|
14
|
|
|
0
|
|
|
508
|
|
2nd Quarter
|
|
|
|
508
|
|
|
30
|
|
|
0
|
|
|
538
|
|
3rd Quarter
|
|
|
|
538
|
|
|
35
|
|
|
0
|
|
|
573
|
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 the quarters which are
branded lululemon athletica and ivivva athletica.
3 Gross square feet added/lost during the quarters includes
net square foot additions for corporate-owned stores which have been
renovated or relocated in the quarter.
Investor Contact:
ICR, Inc.
Joseph Teklits
/
Jean
Fontana
, 203-682-8200
or
Media Contact:
ICR, Inc.
Alecia
Pulman
, 203-682-8224
Source: lululemon athletica inc.