Lululemon athletica inc. reported net revenueincreased 37 percent 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 percent on a constant dollar basis.
Direct-to-consumer revenue increased 89 percent to $45.1 million, or 14.3 percent of total company revenues, in the third quarter ended Oct. 28 2012, an increase from 10.4 percent of total company revenues in the third quarter of fiscal 2011.
Gross profit for the quarter increased 36 percent to $175.3 million, and as a percentage of net revenue gross profit decreased to 55.4 percent for the quarter from 55.8 percent in the third quarter of fiscal 2011.
Income from operations for the quarter increased 35 percent to $80.6 million, and as a percentage of net revenue was 25.5 percent compared to 25.9 percent of net revenue in the third quarter of fiscal 2011.
The tax rate for the quarter was 30.1 percent compared to 35.5 percent 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.
Results for first three quarter
For the nine months ended Oct. 28, 2012 net revenue increased 41 percent 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 percent on a constant dollar basis.
Direct to consumer revenue increased 112 percent to $119.0 million, or 13.4 percent of total company revenues, in the first three quarters of fiscal 2012, an increase from 8.9 percent of total company revenues in the first three quarters of fiscal 2011.
Gross profit for the first three quarters increased 36 percent to $488.3 million, and as a percentage of net revenue gross profit decreased to 55.2 percent for the first three quarters from 57.3 percent in the same period of fiscal 2011.
Income from operations for the first three quarters increased 31 percent to $223.9 million, and as a percentage of net revenue was 25.3 percent compared to 27.2 percent of net revenue in the same period of fiscal 2011.
The tax rate for the first three quarters was 28.7 percent compared to 35.8 percent 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 percent tax rate.
For the full fiscal 2012, we now expect net revenue to be in the range of $1.36 billion to $1.37 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 percent.
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 | ||||
