Lululemon athletica inc resumed its meteoric sales growth in the fourth quarter ended Jan. 31, posting comp store gains of 29%, the Canadian purveyor of yoga inspired clothing said. The company said it expected comps to grow in the 20% range in the current quarter.
The company repoted net revenue for the fourth quarter ended Jan. 31 increased 54.5% to $160.6 million from $103.9 million in the fourth quarter of fiscal 2008. Net revenue from corporate-owned stores was $137.4 million for the quarter, an increase of 52.2% from $90.3 million in the fourth quarter of fiscal 2008, and comparable-store sales increased by 29% on a constant-dollar basis.
Gross profit for the quarter increased by 67.6% to $86.6 million, and as a percentage of net revenue gross profit increased to 53.9% for the quarter from 49.7% in the fourth quarter of fiscal 2008.
Income from operations rose by 158.3% to $41.4 million, and as a percentage of net revenue was 25.8% compared to 15.4% of net revenue in quarter, which included a $4.4 million (4 cents per share) asset impairment charge related to store assets and lease exit costs.
Diluted earnings per share for the quarter was 40 cents on net income of $28.5 million, compared to diluted earnings per share of 16 cents on net income of $10.9 million in the fourth quarter of fiscal 2008. The tax rate for the quarter was 31.4% versus 32.7% a year ago.
For the fiscal year ended Jan. 31, 2010 net revenue rose 28.1% to $452.9 million from $353.5 million in fiscal 2008. Net revenue from corporate-owned stores was $393.5 million, an increase of 24.7% from $315.5 million in fiscal 2008, and comparable-store sales increased by 9% on a constant-dollar basis.
Gross profit for the fiscal year as a percentage of net revenue decreased to 49.3% from 50.7% of net revenue in fiscal 2008.
Income from operations for the fiscal year increased by 53.0% to $86.5 million, and as a percentage of net revenue was 19.1% compared to 16.0% of net revenue in the fourth quarter of fiscal 2008, which included a $4.4 million asset impairment charge related to store assets and lease exit costs.
Diluted earnings per share for the fiscal year was 82 cents on net income of $58.3 million, compared to diluted earnings per share of 55 cents on net income of $39.4 million in fiscal 2008.
The company ended fiscal 2009 with $159.6 million in cash and cash equivalents compared to $56.8 million at the end of fiscal 2008. Inventory at the end of fiscal 2009 totaled $44.1 million compared to $52.1 million at the end of fiscal 2008.
“We are very pleased with the growing sales momentum in our business which has accelerated as the economy has improved and with some of our key initiatives which have taken hold, such as expanding our running line, elevated product to give more value to our customers, and our e-commerce launch, said Christine Day, lululemon’s CEO. Our 29% comparable-store sales increase reflects the strength of the lululemon brand driven by our quality, design, product innovation and unique positioning.”
Updated Outlook
For the first quarter of fiscal 2010, we expect net revenue to be in the range of $125 million to $130 million based on a comparable-store sales increase in the upper 20% range on a constant-dollar basis. Diluted earnings per share are expected to be in the range of 18 to 20 cents for the quarter. This assumes a tax rate of 35% and 71.7 million diluted weighted-average shares outstanding.
For fiscal 2010, we expect net revenue to be in the range of $570 million to $585 million and diluted earnings per share are expected to be in the range of $1.00 to $1.05 for the full year. This assumes a tax rate of 35% and 72.5 million diluted weighted-average shares outstanding.
lululemon athletica inc.
Condensed Consolidated Statements of Operations
Expressed in thousands, except per share amounts
Thirteen Thirteen Fifty-Two Fifty-Two
Weeks Ended Weeks Ended Weeks Ended Weeks Ended
January 31, February 1, January 31, February 1,
2010 2009 2010 2009
(unaudited) (unaudited)
Net revenue $160,606 $103,921 $452,898 $353,488
Costs of goods sold 74,046 52,261 229,812 174,421
Gross profit 86,560 51,660 223,086 179,067
As a percent of net revenue 53.9% 49.7% 49.3% 50.7%
Selling, general and administrative expenses 44,929 31,214 136,161 118,098
As a percent of net revenue 28.0% 30.0% 30.1% 33.4%
Provision for impairment and lease exit costs 196 4,405 379 4,405
Income from operations 41,435 16,041 86,546 56,564
As a percent of net revenue 25.8% 15.4% 19.1% 16.02%
Other income, net 66 210 164 821
Income before income taxes 41,501 16,251 86,710 57,385
Provision for income taxes 13,050 5,313 28,429 16,884
Net income from continuing operations 28,451 10,938 58,281 40,501
Net loss from discontinued operations — — — (1,138)
Net income $28,451 $10,938 $58,281 $39,363
Basic earnings (loss) per share:
Continuing operations $0.40 $0.16 $0.83 $0.59
Discontinued operations — — — (0.02)
Net basic earnings per share $0.40 $0.16 $0.83 $0.57
Diluted earnings (loss) per share:
Continuing operations $0.40 $0.16 $0.82 $0.57
Discontinued operations — — — (0.02)
Net diluted earnings per share $0.40 $0.16 $0.82 $0.55
Weighted-average outstanding:
Basic 70,400 68,207 70,251 68,711
Diluted 71,308 68,523 70,949 70,942
