VANCOUVER, British Columbia
--(BUSINESS WIRE)--
lululemon athletica inc.
(NASDAQ:LULU) (TSX:LLL) today announced
financial results for the fourth quarter and fiscal year ended
February
3, 2013
.
For the fourth quarter ended
February 3, 2013
:
-
Net revenue for the quarter increased 31% to
$485.5 million
from
$371.5 million
in the fourth quarter of fiscal 2011. The fourth
quarter of fiscal 2012 consisted of 14 weeks while the fourth quarter
of fiscal 2011 consisted of 13 weeks. Net sales for the quarter
include an additional week; however comparable stores sales
calculations exclude the 14th week.
-
Comparable stores sales for the fourth quarter increased by 10% on a
constant dollar basis. This increase excludes corporate store sales of
$18.7 million
for the 14th week of the quarter.
-
Direct to consumer revenue increased 56% to
$78.3 million
, or 16.1% of
net revenue, in the fourth quarter of fiscal 2012, from 13.5% of net
revenue in the same period last year. This increase includes
$4.2
million
of net revenue from the 14th week of the quarter.
-
Gross profit for the quarter increased by 31% to
$274.5 million
, and
as a percentage of net revenue gross profit increased to 56.5% for the
quarter from 56.3% in the fourth quarter of fiscal 2011.
-
Income from operations for the quarter increased by 31% to
$152.6
million
, and as a percentage of net revenue was 31.4% compared to
31.2% of net revenue in the fourth quarter of fiscal 2011.
-
The tax rate for the quarter was 29.0% compared to 36.5% a year ago.
The lower effective rate reflects the ongoing impact of revised
intercompany pricing agreements.
-
Diluted earnings per share for the quarter were
$0.75
on net income of
$109.4 million
, compared to diluted earnings per share of
$0.51
on net
income of
$73.5 million
in the fourth quarter of fiscal 2011.
For the fiscal year ended
February 3, 2013
:
-
Net revenue for the fiscal year increased 37% to
$1.4 billion
from
$1.0 billion
in fiscal 2011. Fiscal 2012 consisted of 53 weeks while
fiscal 2011 consisted of 52 weeks. Net sales for the year include an
additional week; however, comparable stores sales and sales per square
foot calculations exclude the 53rd week.
-
Comparable stores sales for fiscal 2012 increased by 16% on a constant
dollar basis, resulting in
$2,058
annual sales per square foot for
comparable stores for fiscal 2012.
-
Direct to consumer revenue increased 86% to
$197.3 million
, or 14.4%
of net revenue in fiscal 2012, from 10.6% of net revenue in fiscal
2011.
-
Gross profit for fiscal 2012 increased by 34% to
$762.8 million
, from
$569.4 million
in fiscal 2011. As a percentage of net revenue, gross
profit decreased to 55.7% compared to 56.9% in fiscal 2011.
-
Income from operations increased by 31% to
$376.4 million
, from
$287.0
million
in fiscal 2011. As a percentage of net revenue, income from
operations decreased to 27.5% compared to 28.7% of net revenue in
fiscal 2011.
-
The tax rate for fiscal 2012 was 28.8% compared to 36.1% for fiscal
2011. The lower effective rate reflects the ongoing impact of revised
intercompany pricing agreements.
-
Diluted earnings per share in fiscal 2012 increased 46% to
$1.85
on
net income of
$270.6 million
, compared to diluted earnings per share
of
$1.27
on net income of
$184.1 million
in fiscal 2011.
The Company ended fiscal 2012 with
$590.2 million
in cash and cash
equivalents compared to
$409.4 million
at the end of fiscal 2011.
Inventory at the end of fiscal 2012 was
$155.2 million
compared to
$104.1 million
at the end of fiscal 2011. The Company ended the quarter
with 211 stores in
North America
and
Australia
.
Christine Day
, lululemon’s CEO, stated: “The fundamentals of our
business are strong, we delivered excellent results in 2012, and we plan
to continue to earn the loyalty of our customers and shareholders every
day going forward. As previously announced on
March 18
th, we
pulled a selection of our black Luon pants from our stores. Delivering
the top quality our guests expect is a critical factor in our
differentiation in the market place. Our proprietary fabric, black Luon,
is a very technical and sensitive product to manufacture. We have a long
history with our manufacturers and as we have in the past, we are
working closely with them to resolve the current issues. We have a team
on site collaborating with them to identify the root cause. We have
recently added strong leadership in Quality Control, our Liason
Office and our commercialization and development teams, and expect these
people and other investments to solidify our quality consistency and our
delivery capabilities.”
Updated Outlook
For the first quarter of fiscal 2013, we expect net revenue to be in the
range of
$333 million to $343 million
based on a comparable-store sales
percentage increase between 5% and 8% on a constant-dollar basis.
Diluted earnings per share are expected to be in the range of
$0.28
to
$0.30
for the quarter. This outlook reflects our current expectations of
the impact from the black Luon issue, including lost revenue in the
range of
$12 million to $17 million
, additional costs expected to be
incurred and the write down of affected product on hand and expected to
be received during the first half of 2013, resulting in a negative
impact on EPS of
$0.11 to $0.12
. This guidance also assumes 146 million
diluted weighted-average shares outstanding and a 30% tax rate.
For fiscal 2013, we expect net revenue to be in the range of
$1.615
billion to $1.640 billion
and diluted earnings per share to be in the
range of
$1.95 to $1.99
for the full year. This outlook reflects our
current expectations of the impact from the black Luon issue, including
lost revenue in the range of
$57 million to $67 million
, additional
costs expected to be incurred and the write down of affected product on
hand and expected to be received during the first half of 2013,
resulting in a negative impact on EPS of
$0.25 to $0.27
. This guidance
also assumes a tax rate of 30% and 146.6 million diluted
weighted-average shares outstanding.
Conference Call Information
A conference call to discuss fiscal 2012 results is scheduled for today,
March 21, 2013
, at
9:00 a.m. EDT
. 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 the effect of shipments of
products that fail to comply with our technical specifications or that
fail to conform to our quality control standards, the duration of any
shortage of products available for sale in our stores or for delivery to
guests or our ability to obtain replacement products in a timely manner,
any expected loss of net revenue resulting from the inability to sell
those products and related increased administrative and shipping costs,
and our future financial condition or results of operations. 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: our reliance on
and limited control over third-party suppliers to provide fabrics for
and to produce our products; negative publicity regarding any of our
products or our the production methods of any of our suppliers or
manufacturers; the effects of shipments of products that fail to comply
with our technical specifications or that fail to conform to our quality
standards; the effects of a shortage of products available for sale in
our stores or for delivery to guests; 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 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 risks and
uncertainties detailed in our Annual Report on Form 10-K for the fiscal
year ended
February 3, 2013
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 |
|
|
|
|
|
|
|
|
|
|
|
Fourteen
Weeks
Ended
February
3,
2013
(unaudited)
|
|
Thirteen
Weeks
Ended
January
29,
2012
(unaudited)
|
|
Fifty-Three
Weeks
Ended
February
3,
2013
|
|
Fifty-Two
Weeks
Ended
January
29,
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenue
|
|
$485,489
|
|
$371,520
|
|
$1,370,358
|
|
$1,000,839
|
|
|
|
|
|
|
|
|
|
|
Costs of goods sold
|
|
210,982
|
|
162,476
|
|
607,532
|
|
431,488
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
274,507
|
|
209,044
|
|
762,826
|
|
569,351
|
| As a percent of net revenue |
|
56.5% |
|
56.3% |
|
55.7% |
|
56.9% |
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expenses
|
|
121,932
|
|
92,977
|
|
386,387
|
|
282,393
|
| As a percent of net revenue |
|
25.1% |
|
25.1% |
|
28.2% |
|
28.2% |
|
Income from operations
|
|
152,575
|
|
116,067
|
|
376,439
|
|
286,958
|
| As a percent of net revenue |
|
31.4% |
|
31.2% |
|
27.5% |
|
28.7% |
|
|
|
|
|
|
|
|
|
|
Other income (expense), net
|
|
1,457
|
|
380
|
|
4,957
|
|
2,500
|
|
|
|
|
|
|
|
|
|
|
Income before provision for income taxes
|
|
154,032
|
|
116,447
|
|
381,396
|
|
289,458
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes
|
|
44,657
|
|
42,558
|
|
109,965
|
|
104,494
|
|
Net Income
|
|
109,375
|
|
73,889
|
|
271,431
|
|
184,964
|
|
Net income attributable to non-controlling interest
|
|
-
|
|
371
|
|
875
|
|
901
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to lululemon athletica inc.
|
|
$109,375
|
|
$73,518
|
|
$270,556
|
|
$184,063
|
|
|
|
|
|
|
|
|
|
|
Net Basic earnings per share
|
|
$0.76
|
|
$0.51
|
|
$1.88
|
|
$1.29
|
|
Net Diluted earnings per share
|
|
$0.75
|
|
$0.51
|
|
$1.85
|
|
$1.27
|
|
|
|
|
|
|
|
|
|
|
Basic weighted-average shares outstanding
|
|
144,285
|
|
143,501
|
|
144,000
|
|
143,196
|
|
Diluted weighted-average shares outstanding
|
|
145,846
|
|
145,344
|
|
145,806
|
|
145,278
|
| lululemon athletica inc. |
Condensed Consolidated Balance Sheets |
Expressed in thousands |
|
|
|
|
|
|
|
|
|
|
February 3,
2013
|
|
|
January 29,
2012
|
|
|
|
|
|
|
|
| ASSETS |
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$590,179
|
|
|
$409,437
|
|
Inventories
|
|
|
155,222
|
|
|
104,097
|
|
Other current assets
|
|
|
41,652
|
|
|
13,559
|
|
Total current assets
|
|
|
787,053
|
|
|
527,093
|
|
Property and equipment, net
|
|
|
214,639
|
|
|
162,941
|
|
Goodwill and intangible assets, net
|
|
|
30,201
|
|
|
31,872
|
|
Deferred income taxes and other assets
|
|
|
19,185
|
|
|
12,728
|
|
Total assets
|
|
|
$1,051,078
|
|
|
$734,634
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
$1,045
|
|
|
$14,536
|
|
Other current liabilities
|
|
|
92,675
|
|
|
80,183
|
|
Income taxes payable
|
|
|
39,637
|
|
|
8,720
|
|
Total current liabilities
|
|
|
133,357
|
|
|
103,439
|
|
Non-current liabilities
|
|
|
30,422
|
|
|
25,014
|
|
Stockholders’ equity
|
|
|
887,299
|
|
|
606,181
|
|
Total liabilities and stockholders’ equity
|
|
|
$1,051,078
|
|
|
$734,634
|
| lululemon athletica inc. |
Condensed Consolidated Statements of Cash Flows |
Expressed in thousands |
|
|
|
|
|
|
|
|
|
|
Fifty-Three Weeks Ended
February 3, 2013
|
|
|
Fifty-Two Weeks Ended
January 29, 2012
|
|
|
|
|
|
|
|
|
Cash flows from operating activities
|
|
|
|
|
|
|
|
Net income
|
|
|
$271,431
|
|
|
$184,964
|
|
Items not affecting cash
|
|
|
40,940
|
|
|
32,381
|
|
Other, including net changes in other non-cash balances
|
|
|
(32,258)
|
|
|
(13,730)
|
|
Net cash provided by operating activities
|
|
|
280,113
|
|
|
203,615
|
|
Net cash used in investing activities
|
|
|
(93,229)
|
|
|
(122,311)
|
|
|
|
|
|
|
|
|
Net cash (used in) provided by financing activities
|
|
|
(5,491)
|
|
|
15,364
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash
|
|
|
(651)
|
|
|
(3,517)
|
|
|
|
|
|
|
|
|
Increase in cash and cash equivalents
|
|
|
180,742
|
|
|
93,151
|
|
Cash and cash equivalents, beginning of year
|
|
|
$409,437
|
|
|
$316,286
|
|
Cash and cash equivalents, end of year
|
|
|
$590,179
|
|
|
$409,437
|
| lululemon athletica inc. |
Reconciliation of Non-GAAP Financial Measure |
Constant-dollar changes
(unaudited) |
|
|
|
|
|
|
|
|
|
|
Thirteen Weeks
Ended
January 27,
20131
|
|
|
Thirteen Weeks
Ended
January 29, 2012
|
|
|
|
% Change |
|
|
% Change |
|
Comparable-store sales (GAAP)
|
|
|
11%
|
|
|
25%
|
|
|
|
|
|
|
|
|
Adjustments due to changes in foreign exchange rates
|
|
|
(1)%
|
|
|
1%
|
|
|
|
|
|
|
|
|
Comparable-store sales in constant dollars
|
|
|
10%
|
|
|
26%
|
1 The fourteenth week’s sales of the fourth quarter of fiscal
2012 are not included in the calculation of the comparable-store sales
changes.
| lululemon athletica inc. |
Store Count and Square Footage1 |
Fifty-Three Weeks Ended February 3, 2013 |
Square Footage Expressed in Thousands |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
Stores Open
at the
Beginning
of
the Quarter
|
|
|
Number of
Stores
Opened
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
|
|
4th Quarter
|
|
|
|
201
|
|
|
10
|
|
|
0
|
|
|
211
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Gross
Square Feet
at the
Beginning
of
the Quarter
|
|
|
Gross Square
Feet Added
During the
Quarter2,3
|
|
|
Gross Square
Feet Lost
During the
Quarter3
|
|
|
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
|
|
4th Quarter
|
|
|
|
573
|
|
|
29
|
|
|
0
|
|
|
602
|
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.