VANCOUVER, British Columbia
--(BUSINESS WIRE)--
lululemon athletica inc. (NASDAQ:LULU) today announced financial results
for the first quarter ended
May 3, 2015
.
For the first quarter ended
May 3, 2015
:
-
Net revenue for the quarter increased 10% to
$423.5 million
from
$384.6 million
in the first quarter of fiscal 2014.
-
Total comparable sales, which includes comparable store sales and
direct to consumer, increased by 6% for the first quarter on a
constant dollar basis.
-
Comparable store sales for the first quarter decreased by 1% on a
constant dollar basis and direct to consumer revenue increased 31% on
a constant dollar basis.
-
Direct to consumer net revenue increased 27% to
$83.6 million
, or
19.7% of total Company revenue, in the first quarter of fiscal 2015,
an increase from 17.2% of total Company revenues in the first quarter
of fiscal 2014.
-
Gross profit for the quarter increased by 5% to
$205.9 million
, and as
a percentage of net revenue gross profit was 48.6% for the quarter
compared to 50.9% in the first quarter of fiscal 2014.
-
Income from operations for the quarter decreased by 3% to
$68.0
million
, and as a percentage of net revenue was 16.1% compared to
18.2% of net revenue in the first quarter of fiscal 2014.
-
The effective tax rate for the quarter was 30.3% compared to 73.4% in
the first quarter of fiscal 2014. The first quarter of fiscal 2014
included a tax expense of
$30.9 million
related to the repatriation of
foreign earnings to fund the share buyback program. The tax rate for
the first quarter of fiscal 2014 excluding the
$30.9 million
tax
expense on the repatriation of foreign earnings would have been 30.1%.
-
Diluted earnings per share for the quarter were
$0.34
on net income of
$47.8 million
, compared to diluted earnings per share of
$0.13
on net
income of
$19.0 million
in the first quarter of fiscal 2014, which
included a
$0.21
per share impact from the tax expense on the
repatriation of foreign earnings. Excluding the tax expense on the
repatriation of foreign earnings, diluted earnings per share were
$0.34
in the first quarter of fiscal 2014.
-
During the first quarter of fiscal 2015, the Company repurchased 0.3
million shares of the Company's common stock at an average cost of
$66.51
per share.
The Company ended the first quarter of fiscal 2015 with
$655.9 million
in cash and cash equivalents compared to
$752.0 million
at the end of
the first quarter of fiscal 2014. Inventory at the end of the first
quarter of fiscal 2015 totaled
$236.5 million
compared to
$180.4 million
at the end of the first quarter of fiscal 2014. The Company ended the
quarter with 316 stores.
Laurent Potdevin
, lululemon's CEO, stated: "Our team’s solid performance
resulted in another improving quarter – coming in ahead of our revenue
expectations. We drove positive trends in traffic, conversion, and brand
engagement, along with a continued acceleration of our e-commerce
business."
Mr. Potdevin
continued: "To support our long term goals, we
are intentionally striking a strategic balance between strong growth and
investments within innovation and infrastructure."
Updated Outlook
For the second quarter of fiscal 2015, we expect net revenue to be in
the range of
$440 million
to
$445 million
based on total comparable
sales in the high single digits on a constant dollar basis. Diluted
earnings per share are expected to be in the range of
$0.31
to
$0.33
for
the quarter. This guidance assumes 142.3 million diluted
weighted-average shares outstanding and a 30.2% tax rate. The guidance
does not reflect potential future repurchases of the Company's shares.
For the full fiscal 2015, we now expect net revenue to be in the range
of
$2.000 billion
to
$2.050 billion
based on total comparable sales in
the mid single digits on a constant dollar basis. Diluted earnings per
share are expected to be in the range of
$1.86
to
$1.91
for the full
year. This guidance assumes 142.4 million diluted weighted-average
shares outstanding and a 30.2% tax rate. The guidance does not reflect
potential future repurchases of the Company's shares.
Conference Call Information
A conference call to discuss first quarter results is scheduled for
today,
June 9, 2015
, 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 inc.
lululemon athletica inc. (NASDAQ:LULU) is a yoga-inspired athletic
apparel company with products that create transformational experiences
for people to live happy, healthy, fun lives. 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 Measures
Total comparable sales in constant dollars, comparable store sales in
constant dollars, changes in direct to consumer net revenue in constant
dollars, the tax rate excluding the tax expense on the repatriation of
foreign earnings, and diluted earnings per share excluding the tax
expense on the repatriation of foreign earnings are not
United States
generally accepted accounting principle ("GAAP") performance measures.
We provide constant dollar total comparable sales, comparable store
sales, and changes in direct to consumer net revenue because we use
these measures to understand the underlying growth rate of net revenue
excluding the impact of changes in foreign exchange rates, which are not
under management's control. We believe that disclosing these measures on
a constant dollar basis is useful to investors because it enables them
to better understand the level of growth of our business.
We disclose the tax rate and diluted earnings per share excluding the
tax expense on repatriated foreign earnings because of their
comparability to our historical information as well as our diluted
earnings per share guidance, which we believe is useful to investors.
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 these non-GAAP financial measures, please see
the table captioned "Reconciliation of Non-GAAP Financial Measures"
included in the accompanying financial tables, which includes more
detail on the GAAP financial measure that is most directly comparable to
each non-GAAP financial measure, 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 and our prospects and strategies for
future growth. 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 ability to maintain the value and reputation of our brand, including
any negative publicity regarding our products or the production methods
of our suppliers or manufacturers; the acceptability of our products to
our guests, including receiving products that comply with our technical
specifications and quality standards; our reliance on and limited
control over third-party suppliers to provide fabrics for and to produce
our products; an economic downturn or economic uncertainty in our key
markets; our highly competitive market and increasing competition;
increasing product costs and decreasing selling prices; our ability to
anticipate consumer preferences and successfully develop and introduce
new, innovative and updated products; our ability to accurately forecast
customer demand for our products; our ability to safeguard against
security breaches with respect to our information technology systems;
any material disruption of our information systems; our ability to
manage our growth and the increased complexity of our business
effectively; the fluctuating costs of raw materials; our ability to
expand internationally in light of our limited operating experience and
limited brand recognition in new international markets; our ability to
deliver our products to the market and to meet customer expectations if
we have problems with our distribution system; imitation by our
competitors; our ability to protect our intellectual property rights;
our ability 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 South and
South East Asia
; our ability to
successfully open new store locations in a timely manner; our ability to
comply with trade and other regulations; the continued service of our
senior management; seasonality; fluctuations in foreign currency
exchange rates; the operations of many of our suppliers are subject to
international and other risks; our ability to source our merchandise
profitably or at all; our exposure to various types of litigation;
actions of activist stockholders; and other risks and uncertainties set
out in filings made from time to time with the
United States Securities
and Exchange Commission
and available at www.sec.gov,
including, without limitation, our most recent reports on Form 10-K and
Form 10-Q. 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 we undertake no obligation to
publicly update such forward-looking statements to reflect subsequent
events or circumstances, except as may be required by law.
lululemon athletica inc.
Condensed Consolidated Statements of Operations
Unaudited;
Expressed in thousands, except per share amounts
|
|
|
|
|
|
|
Thirteen Weeks |
|
Thirteen Weeks |
|
|
Ended |
|
Ended |
|
|
May 3, 2015
|
|
May 4, 2014
|
|
Net revenue
|
|
$
|
423,544
|
|
|
$
|
384,618
|
|
|
Costs of goods sold
|
|
217,667
|
|
|
188,874
|
|
|
Gross profit
|
|
205,877
|
|
|
195,744
|
|
| As a percent of net revenue |
|
48.6 |
% |
|
50.9 |
% |
|
Selling, general and administrative expenses
|
|
137,841
|
|
|
125,943
|
|
| As a percent of net revenue |
|
32.5 |
% |
|
32.7 |
% |
|
Income from operations
|
|
68,036
|
|
|
69,801
|
|
| As a percent of net revenue |
|
16.1 |
% |
|
18.2 |
% |
|
Other income, net
|
|
529
|
|
|
1,643
|
|
|
Income before provision for income taxes
|
|
68,565
|
|
|
71,444
|
|
|
Provision for income taxes
|
|
20,755
|
|
|
52,463
|
|
|
Net income
|
|
$
|
47,810
|
|
|
$
|
18,981
|
|
|
|
|
|
|
|
Basic earnings per share
|
|
$
|
0.34
|
|
|
$
|
0.13
|
|
|
Diluted earnings per share
|
|
$
|
0.34
|
|
|
$
|
0.13
|
|
|
Basic weighted-average shares outstanding
|
|
141,967
|
|
|
145,383
|
|
|
Diluted weighted-average shares outstanding
|
|
142,337
|
|
|
145,861
|
|
|
|
|
|
|
|
|
lululemon athletica inc.
Condensed Consolidated Balance Sheets
Unaudited;
Expressed in thousands
|
|
May 3, 2015
|
|
February 1, 2015
|
| ASSETS |
|
|
|
|
|
Current assets
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
655,881
|
|
|
$
|
664,479
|
|
Inventories
|
|
236,499
|
|
|
208,116
|
|
Other current assets
|
|
80,412
|
|
|
78,417
|
|
Total current assets
|
|
972,792
|
|
|
951,012
|
|
Property and equipment, net
|
|
314,336
|
|
|
296,008
|
|
Goodwill and intangible assets, net
|
|
26,276
|
|
|
26,163
|
|
Deferred income tax assets and other non-current assets
|
|
24,312
|
|
|
23,030
|
|
Total assets
|
|
$
|
1,337,716
|
|
|
$
|
1,296,213
|
| LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
Accounts payable
|
|
$
|
5,318
|
|
|
$
|
9,339
|
|
Accrued inventory liabilities
|
|
39,008
|
|
|
22,296
|
|
Accrued compensation and related expenses
|
|
27,550
|
|
|
29,932
|
|
Income taxes payable
|
|
1,277
|
|
|
20,073
|
|
Unredeemed gift card liability
|
|
39,226
|
|
|
46,252
|
|
Other accrued liabilities
|
|
31,103
|
|
|
31,989
|
|
Total current liabilities
|
|
143,482
|
|
|
159,881
|
|
Deferred income tax liabilities
|
|
3,800
|
|
|
3,633
|
|
Other non-current liabilities
|
|
45,423
|
|
|
43,131
|
|
Stockholders' equity
|
|
1,145,011
|
|
|
1,089,568
|
|
Total liabilities and stockholders' equity
|
|
$
|
1,337,716
|
|
|
$
|
1,296,213
|
|
|
|
|
|
|
|
|
lululemon athletica inc.
Condensed Consolidated Statements of Cash Flows
Unaudited;
Expressed in thousands
|
|
|
|
|
|
|
Thirteen Weeks |
|
Thirteen Weeks |
|
|
Ended |
|
Ended |
|
|
May 3, 2015
|
|
May 4, 2014
|
|
Cash flows from operating activities
|
|
|
|
|
|
Net income
|
|
$
|
47,810
|
|
|
$
|
18,981
|
|
|
Items not affecting cash
|
|
17,955
|
|
|
45,383
|
|
|
Other, including net changes in other non-cash balances
|
|
(44,825
|
)
|
|
6,611
|
|
|
Net cash provided by operating activities
|
|
20,940
|
|
|
70,975
|
|
|
Net cash used in investing activities
|
|
(27,936
|
)
|
|
(25,447
|
)
|
|
Net cash used in financing activities
|
|
(17,041
|
)
|
|
(1,649
|
)
|
|
Effect of exchange rate changes on cash
|
|
15,439
|
|
|
9,437
|
|
|
(Decrease) increase in cash and cash equivalents
|
|
(8,598
|
)
|
|
53,316
|
|
|
Cash and cash equivalents, beginning of period
|
|
$
|
664,479
|
|
|
$
|
698,649
|
|
|
Cash and cash equivalents, end of period
|
|
$
|
655,881
|
|
|
$
|
751,965
|
|
|
|
|
|
|
|
|
|
|
lululemon athletica inc.
Reconciliation of Non-GAAP Financial Measures
Constant dollar total comparable sales (unaudited)
|
|
|
|
|
|
|
Thirteen Weeks |
|
Thirteen Weeks |
|
|
Ended |
|
Ended |
|
|
May 3, 2015
|
|
May 4, 2014
|
|
Total comparable sales1
|
|
2
|
%
|
|
(2
|
)%
|
|
Adjustments due to foreign exchange rate changes
|
|
4
|
|
|
3
|
|
|
Total comparable sales in constant dollars1
|
|
6
|
%
|
|
1
|
%
|
|
|
|
|
|
|
|
__________
1Total comparable sales includes comparable store sales and
direct to consumer sales. Comparable store sales reflects net revenue at
company-operated stores that have been open for at least 12 months.
Constant dollar comparable store sales (unaudited)
|
|
|
|
|
|
|
Thirteen Weeks |
|
Thirteen Weeks |
|
|
Ended |
|
Ended |
|
|
May 3, 2015
|
|
May 4, 2014
|
|
Comparable store sales1
|
|
(5
|
)%
|
|
(7
|
)%
|
|
Adjustments due to foreign exchange rate changes
|
|
4
|
|
|
3
|
|
|
Comparable store sales in constant dollars1
|
|
(1
|
)%
|
|
(4
|
)%
|
|
|
|
|
|
|
|
__________
1Comparable store sales reflects net revenue at
company-operated stores that have been open for at least 12 months.
Constant dollar changes in direct to consumer revenue (unaudited)
|
|
|
|
|
|
|
Thirteen Weeks |
|
Thirteen Weeks |
|
|
Ended |
|
Ended |
|
|
May 3, 2015
|
|
May 4, 2014
|
|
Change in direct to consumer revenue
|
|
27
|
%
|
|
22
|
%
|
|
Adjustments due to foreign exchange rate changes
|
|
4
|
|
|
3
|
|
|
Change in direct to consumer revenue in constant dollars
|
|
31
|
%
|
|
25
|
%
|
|
|
|
|
|
|
|
Tax rate, excluding the tax expense on repatriated foreign earnings
(unaudited)
|
|
|
|
|
|
|
Thirteen Weeks |
|
Thirteen Weeks |
|
|
Ended |
|
Ended |
|
|
May 3, 2015
|
|
May 4, 2014
|
|
Tax rate
|
|
30.3
|
%
|
|
73.4
|
%
|
|
Tax expense on repatriated foreign earnings
|
|
—
|
|
|
(43.3
|
)
|
|
Tax rate, excluding the tax expense on repatriated foreign earnings
|
|
30.3
|
%
|
|
30.1
|
%
|
|
|
|
|
|
|
|
Diluted earnings per share, excluding the tax expense on repatriated
foreign earnings (unaudited)
|
|
|
|
|
|
|
Thirteen Weeks |
|
Thirteen Weeks |
|
|
Ended |
|
Ended |
|
|
May 3, 2015
|
|
May 4, 2014
|
|
Diluted earnings per share
|
|
$
|
0.34
|
|
|
$
|
0.13
|
|
Tax expense on repatriated foreign earnings
|
|
—
|
|
|
0.21
|
|
Diluted earnings per share, excluding the tax expense on repatriated
foreign earnings
|
|
$
|
0.34
|
|
|
$
|
0.34
|
|
|
|
|
|
|
|
|
lululemon athletica inc.
Store Count and Square Footage1
Thirteen
Weeks Ended
May 3, 2015
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
Quarter2
|
|
Number of
Stores Open
at the End of
the
Quarter
|
|
1st Quarter
|
|
302
|
|
|
14
|
|
|
—
|
|
|
316
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
894
|
|
|
37
|
|
|
—
|
|
|
931
|
|
|
|
|
|
|
|
|
|
|
|
|
__________
1Store count and square footage summary includes
company-operated stores which are branded lululemon athletica or ivivva
athletica.
2Number of stores opened/closed during the quarter that are
branded lululemon athletica or ivivva athletica.
3Gross square feet added/lost during the quarter includes net
square foot additions for company-operated stores which have been
renovated or relocated in the quarter.
View source version on businesswire.com: http://www.businesswire.com/news/home/20150609005687/en/
Investors:
ICR, Inc.
Joseph Teklits
/
Jean Fontana
,
203-682-8200
or
Media:
ICR, Inc.
Alecia
Pulman
, 203-682-8224
Source: lululemon athletica inc.