Lululemon Athletica Inc. reported revenue for the quarter increased 69.3% to $138.3 million from $81.7 million in the first quarter of fiscal 2009. Net revenue from corporate-owned stores was $115.6 million for the quarter, an increase of 58.5% from $72.9 million in the first quarter of fiscal 2009, and comparable-store sales increased by 35% on a constant-dollar basis.

Other highlights in the quarter:

  • Gross profit for the quarter increased by 112.3% to $74.4 million, and as a percentage of net revenue gross profit increased to 53.8% for the quarter from 42.9% in the first quarter of fiscal 2009.
  • Income from operations for the quarter increased by 229.6% to $32.5 million, and as a percentage of net revenue was 23.5% compared to 12.1% of net revenue in the first quarter of fiscal 2009.
  • Diluted earnings per share for the quarter was $0.27 on net income of $19.6 million, compared to diluted earnings per share of $0.09 on net income of $6.5 million in the first quarter of fiscal 2009.
  • The tax rate for the quarter was 40.0% versus 34.4% a year ago. The tax rate has been increased to take into account the additional future income tax liability which could arise on repatriation of excess unremitted earnings of the Canadian operating subsidiary.

The company ended the first quarter of fiscal 2010 with $173.6 million in cash and cash equivalents compared to $59.3 million at the end of the first quarter of fiscal 2009. Inventory at the end of the first quarter of fiscal 2010 totaled $50.8 million compared to $44.6 million at the end of the first quarter of fiscal 2009.

Christine Day, lululemon’s CEO stated: “This was our company's best-ever first quarter as we were able to generate very strong same store sales growth in both the U.S. and Canada. In the first quarter, we saw our trailing 12 month average sales per square foot reach $1,428, an improvement from last quarter’s $1,318.”

Updated Outlook

The previous outlook had reflected a tax rate of 35%. Consistent with the adjustment to the tax rate in the first quarter of fiscal 2010 the updated outlook assumes a tax rate of 40% for fiscal 2010.

For the second quarter of fiscal 2010, we expect net revenue to be in the range of $140 million to $145 million based on a comparable-store sales percentage increase in the mid 20s on a constant-dollar basis. Diluted earnings per share are expected to be in the range of $0.21 to $0.23 for the quarter. This assumes 72.1 million diluted weighted-average shares outstanding.

For the full fiscal 2010, we now expect net revenue to be in the range of $620 million to $635 million and diluted earnings per share are expected to be in the range of $1.05 to $1.10 for the full year. This assumes 72.2 million diluted weighted-average shares outstanding.

lululemon athletica inc.

Condensed Consolidated Statements of Operations

Expressed in thousands, except per share amounts



 

 




Thirteen Weeks Ended


Thirteen Weeks Ended

May 2, 2010

(unaudited)

May 3, 2009

(unaudited)






 

Net revenue

$
138,297


$
81,680






 

Costs of goods sold

 
63,940
 

 
46,656
 





 

Gross profit


74,357



35,024

As a percent of net revenue


53.8
%


42.9
%






 

Selling, general and administrative expenses


41,883



25,171

As a percent of net revenue

 
30.3
%

 
30.8
%


Income from operations


32,474



9,853

As a percent of net revenue


23.5
%


12.1
%






 

Other income (expense), net

 
161
 

 
78
 






 

Income before provision for income taxes


32,635



9,931






 

Provision for income taxes

 
13,047
 

 
3,413
 





 

Net income

$
19,588
 

$
6,518
 






 

Basic earnings per share

$
0.28


$
0.09

Diluted earnings per share

$
0.27


$
0.09






 

Basic weighted-average shares outstanding


70,599



70,131

Diluted weighted-average shares outstanding


71,582



70,331