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8-K - FORM 8-K - lululemon athletica inc. | c14266e8vk.htm |
Exhibit 99.1
LULULEMON ATHLETICA INC. ANNOUNCES FOURTH QUARTER AND FULL YEAR
FISCAL 2010 RESULTS
Q4 Net Revenue Increases 53% to $245.4 million
Q4 Diluted EPS of $0.76 including tax adjustment
Fiscal 2010 Diluted EPS increases 106% to $1.69
FISCAL 2010 RESULTS
Q4 Net Revenue Increases 53% to $245.4 million
Q4 Diluted EPS of $0.76 including tax adjustment
Fiscal 2010 Diluted EPS increases 106% to $1.69
Vancouver, Canada March 17, 2011 lululemon athletica inc. [NASDAQ:LULU; TSX:LLL] today
announced financial results for the fourth quarter and fiscal year ended January 30, 2011.
For the fourth quarter ended January 30, 2011:
| Net revenue for the quarter increased 53% to $245.4 million from $160.6
million in the fourth quarter of fiscal 2009. |
||
| Comparable stores sales for the fourth quarter increased by 28% on a constant
dollar basis. |
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| Direct to consumer revenue increased 152% to $24.6 million, or 10% of total
Company sales, in the fourth quarter of fiscal 2010, from 6% of total revenue in
the same period last year. |
||
| Gross profit for the quarter increased by 66% to $143.5 million, and as a
percentage of net revenue gross profit increased to 58.5% for the
quarter from 53.9%
in the fourth quarter of fiscal 2009. |
||
| Income from operations for the quarter increased
by 72% to $71.3 million, and
as a percentage of net revenue was 29.1% compared to 25.8% of net revenue in the
fourth quarter of fiscal 2009. |
||
| The tax rate for the quarter
was 23.5% compared to 31.4% a year ago, after an adjustment of $8.9
million reversing deferred tax liabilities recorded in Q1 through Q3
of fiscal 2010. This adjustment resulted from a revision to
managements plans for repatriation of unremitted earnings of the
Canadian operating subsidiary. Normalized for this adjustment, the
tax rate for the quarter was 35.9%. |
||
| Diluted earnings per share for the quarter
were $0.76 on net income of $54.8
million, compared to diluted earnings per share of $0.40 on net income of $28.5
million in the fourth quarter of fiscal 2009. Normalized for the tax
adjustments, diluted earnings per share for the quarter were $0.64. |
For the fiscal year ended January 30, 2011:
| Net revenue for the fiscal year increased 57% to $711.7 million from $452.9
million in fiscal 2009. |
||
| Comparable stores sales for fiscal 2010 increased by 30% on a constant dollar
basis, resulting in a record $1,726 sales per square foot as at January 30, 2011. |
||
| Direct to consumer revenue increased 214% to $57.3 million, or 8% of total
Company sales, in fiscal 2010, from 4% of total revenue in fiscal 2009. |
||
| Gross profit for the fiscal year increased by 77% to $394.9 million from
$223.1 million in fiscal 2009. As a percentage of net revenue, gross profit
increased to 55.5% for fiscal 2010 from 49.3% in fiscal 2009. |
||
| Income from operations increased by 108%
to $180.4 million, and as a
percentage of net revenue was 25.3% compared to 19.1% of net revenue in fiscal 2009. |
||
| The tax rate for fiscal 2010
was 33.3% compared to 32.8% for fiscal 2009. |
||
| Diluted earnings per share
in fiscal 2010 increased 106% to $1.69 on net income of $121.8
million, compared to diluted earnings per share of $0.82 on net income of $58.3
million in fiscal 2009. |
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The Company ended fiscal 2010 with $316.3 million in cash and cash equivalents compared to
$159.6 million at the end of fiscal 2009. Inventory at the end of fiscal 2010 totaled $57.5
million compared to $44.1 million at the end of fiscal 2009. The Company ended the quarter with 137
stores in North America and Australia.
Christine Day,
lululemons CEO, stated: We ended one of the best years in lululemons history with
strong Q4 results that extended the consistent sales growth and margin expansion that we enjoyed
for each quarter of 2010. The exceptionally strong sell through of
our Q4 product line leaves us with short term unmet demand in the first
quarter due to a low inventory position. However, the strength of our business model and
growing guest demand for our
product give us the opportunity to accelerate our store and
e-commerce channel growth in 2011 and to establish ourselves as the
number one womens athletic wear brand. While we will see some cost pressures in 2011, we are
confident in our ability to maintain our business model through disciplined management, operating
efficiencies and leverage on higher sales.
Updated Outlook
For the first quarter of
fiscal 2011, we expect net revenue to be in the range of $175 million to
$180 million based on a comparable-store sales percentage increase in the low double
digits on a
constant-dollar basis. Diluted earnings per share are expected to be in the range of
$0.36 to $0.38
for the quarter. This assumes 72.4 million diluted weighted-average shares outstanding
and a 36%
tax rate.
For fiscal 2011, we expect
net revenue to be in the range of $885 million to $900 million and
diluted earnings per share are expected to be in the range of $1.90 to $2.00 for the full year.
This assumes a tax rate of 36% and 72.6 million diluted weighted-average shares outstanding.
Conference Call Information
A conference call to discuss fiscal 2010 results is scheduled for today, March 17, 2011, at 9:00 am
Eastern Time. Those interested in participating in the call are invited to dial (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 longer, healthier and more 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 managements 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.
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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, our prospects and strategies for future growth, the development and
introduction of new products, and the implementation of our marketing and branding strategies. 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 managements 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: the possibility that we may not be able to manage operations at our
current size or manage growth effectively; risks that consumer spending may continue to decline
and that U.S. and global macroeconomic conditions may worsen; risks that the cost of raw materials
could increase our cost of goods sold and that we will not be successful in our efforts to protect
our business from the volatility of the market price for cotton and other raw materials; risks
that increasing labor costs and other factors associated with the manufacture of our products in
China could increase our costs to produce our products; risks that we may not be able to obtain
quality products on a timely basis or in sufficient quantity from our third-party suppliers to
meet the demand for our products; the possibility that levels of
comparable-store sales or average sales per square foot will decline; the possibility that we may
not be able to successfully expand in the United States and other new markets; increased
competition causing us to reduce the prices of our products or to increase significantly our
marketing efforts in order to avoid losing market share; the possibility that we may not be able
to continually innovate and provide our consumers with improved products; the possibility that our
suppliers or manufacturers may not produce or deliver our products in a timely or cost-effective
manner; and other risk factors detailed in our Annual Report on Form 10-K for the fiscal year ended
January 30, 2011 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.
Contacts:
Investor
Contact:
Joseph Teklits/Jean Fontana
ICR, Inc.
203-682-8200
ICR, Inc.
203-682-8200
Media Contact:
Alecia Pulman
ICR, Inc.
203-682-8224
ICR, Inc.
203-682-8224
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lululemon athletica inc.
Condensed Consolidated Statements of Operations
Expressed in thousands, except per share amounts
Condensed Consolidated Statements of Operations
Expressed in thousands, except per share amounts
Thirteen | Thirteen | |||||||||||||||
Weeks | Weeks | Fifty-Two | Fifty-Two | |||||||||||||
Ended | Ended | Weeks | Weeks | |||||||||||||
January 30, | January 31, | Ended | Ended | |||||||||||||
2011 | 2010 | January 30, | January 31, | |||||||||||||
(unaudited) | (unaudited) | 2011 | 2010 | |||||||||||||
Net revenue |
$ | 245,399 | $ | 160,606 | $ | 711,704 | $ | 452,898 | ||||||||
Costs of goods sold |
101,939 | 74,046 | 316,757 | 229,812 | ||||||||||||
Gross profit |
143,460 | 86,560 | 394,947 | 223,086 | ||||||||||||
As a percent of net revenue |
58.5 | % | 53.9 | % | 55.5 | % | 49.3 | % | ||||||||
Selling, general and
administrative expenses |
71,483 | 44,929 | 212,784 | 136,161 | ||||||||||||
As a percent of net revenue |
29.1 | % | 28.0 | % | 29.9 | % | 30.1 | % | ||||||||
Provision for impairment and
lease exit costs |
679 | 196 | 1,772 | 379 | ||||||||||||
Income from operations |
71,298 | 41,435 | 180,391 | 86,546 | ||||||||||||
As a percent of net revenue |
29.1 | % | 25.8 | % | 25.3 | % | 19.1 | % | ||||||||
Other income (expense), net |
542 | 66 | 2,886 | 164 | ||||||||||||
Income before provision for
income taxes |
71,840 | 41,501 | 183,277 | 86,710 | ||||||||||||
Provision for income taxes |
16,873 | 13,050 | 61,080 | 28,429 | ||||||||||||
Net Income |
54,967 | 28,451 | 122,197 | 58,281 | ||||||||||||
Net income attributable to
non-controlling interest |
201 | | 350 | | ||||||||||||
Net income attributable to
lululemon athletica inc. |
$ | 54,766 | $ | 28,451 | $ | 121,847 | $ | 58,281 | ||||||||
Basic earnings per share |
$ | 0.77 | $ | 0.40 | $ | 1.72 | $ | 0.83 | ||||||||
Diluted earnings per share |
$ | 0.76 | $ | 0.40 | $ | 1.69 | $ | 0.82 | ||||||||
Basic weighted-average shares
outstanding |
71,087 | 70,400 | 70,860 | 70,251 | ||||||||||||
Diluted weighted-average
shares outstanding |
72,181 | 71,308 | 71,929 | 70,949 |
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lululemon athletica inc.
Condensed Consolidated Balance Sheets
Expressed in thousands
Condensed Consolidated Balance Sheets
Expressed in thousands
January 30, | January 31, | |||||||
2011 | 2010 | |||||||
ASSETS |
||||||||
Current assets |
||||||||
Cash and cash equivalents |
$ | 316,286 | $ | 159,573 | ||||
Inventories |
57,469 | 44,070 | ||||||
Other current assets |
15,524 | 12,767 | ||||||
Total current assets |
389,279 | 216,410 | ||||||
Property and equipment, net |
70,954 | 61,591 | ||||||
Intangible assets, net |
27,112 | 8,050 | ||||||
Deferred income taxes and other assets |
11,957 | 21,207 | ||||||
Total assets |
$ | 499,302 | $ | 307,258 | ||||
LIABILITIES AND STOCKHOLDERS EQUITY |
||||||||
Current liabilities |
||||||||
Accounts payable |
$ | 6,659 | $ | 11,028 | ||||
Other current liabilities |
60,306 | 39,908 | ||||||
Income taxes payable |
18,399 | 7,742 | ||||||
Total current liabilities |
85,364 | 58,678 | ||||||
Deferred income taxes and other non-current liabilities |
19,645 | 15,472 | ||||||
Stockholders equity |
394,293 | 233,108 | ||||||
Total liabilities and stockholders equity |
$ | 499,302 | $ | 307,258 | ||||
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lululemon athletica inc.
Condensed Consolidated Statements of Cash Flows
Expressed in thousands
Condensed Consolidated Statements of Cash Flows
Expressed in thousands
Fifty-Two Weeks Ended | Fifty-Two Weeks Ended | |||||||
January 30, 2011 | January 31, 2010 | |||||||
Cash flows from operating activities |
||||||||
Net income |
$ | 122,197 | $ | 58,281 | ||||
Items not affecting cash |
33,832 | 28,889 | ||||||
Other, including net changes in other
non-cash balances |
23,966 | 30,790 | ||||||
Net cash provided by operating activities |
179,995 | 117,960 | ||||||
Net cash used in investing activities |
(42,839 | ) | (16,307 | ) | ||||
Net cash provided by financing activities |
13,699 | (2,649 | ) | |||||
Effect of exchange rate changes on cash |
5,858 | 3,772 | ||||||
Increase in cash and cash equivalents |
156,713 | 102,776 | ||||||
Cash and cash equivalents, beginning of period |
$ | 159,573 | $ | 56,797 | ||||
Cash and cash equivalents, end of period |
$ | 316,286 | $ | 159,573 | ||||
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lululemon athletica inc.
Store Count and Square Footage1
Year ended January 30, 2011
Square Footage Expressed in Thousands
Store Count and Square Footage1
Year ended January 30, 2011
Square Footage Expressed in Thousands
Number of | ||||||||||||||||
Number of | Stores | Number of | ||||||||||||||
Stores Open | Opened / | Stores | Number of | |||||||||||||
at the | Acquired | Closed | Stores Open | |||||||||||||
Beginning of | During the | During the | at the End of | |||||||||||||
the Quarter | Quarter2 | Quarter | the Quarter | |||||||||||||
1st Quarter |
110 | 4 | 0 | 114 | ||||||||||||
2nd Quarter |
114 | 12 | 0 | 126 | ||||||||||||
3rd Quarter |
126 | 4 | 0 | 130 | ||||||||||||
4th Quarter |
130 | 5 | 2 | 133 |
Gross Square | ||||||||||||||||
Total Gross | Feet Lost | |||||||||||||||
Square Feet | Gross Square | due to Store | Total Gross | |||||||||||||
at the | Feet Added | Closures | Square Feet | |||||||||||||
Beginning of | During the | During the | at the End of | |||||||||||||
the Quarter | Quarter2,3 | Quarter | the Quarter | |||||||||||||
1st Quarter |
316 | 9 | 0 | 325 | ||||||||||||
2nd Quarter |
325 | 25 | 0 | 350 | ||||||||||||
3rd Quarter |
350 | 14 | 0 | 364 | ||||||||||||
4th Quarter |
364 | 13 | (3 | ) | 374 |
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 fiscal 2010 are branded lululemon athletica and include
nine locations repurchased from our Australian franchise operator and one reacquired franchise in
Canada, in the second quarter. |
|
3 | Gross square feet added during the quarter includes net square foot additions for
corporate-owned stores which have been renovated or relocated in the quarter. |
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lululemon athletica inc.
Reconciliation of Non-GAAP Financial Measure
Constant-dollar changes
(unaudited)
Reconciliation of Non-GAAP Financial Measure
Constant-dollar changes
(unaudited)
Thirteen Weeks | Thirteen Weeks | |||||||
Ended | Ended | |||||||
January 30, 2011 | January 31, 2010 | |||||||
% Change | % Change | |||||||
Comparable-store sales (GAAP) |
32 | % | 42 | % | ||||
Increase (decrease) due to foreign
exchange rate changes |
(4 | )% | (13 | )% | ||||
Comparable-store sales in constant dollars |
28 | % | 29 | % |
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