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8-K - 8-K - lululemon athletica inc. | c18593e8vk.htm |
Exhibit 99.1
LULULEMON ATHLETICA INC. ANNOUNCES FIRST QUARTER FISCAL 2011 RESULTS
First Quarter Net Revenue Increased 35% to $186.8 million
First Quarter Diluted EPS of $0.46
First Quarter Net Revenue Increased 35% to $186.8 million
First Quarter Diluted EPS of $0.46
Vancouver, Canada June 10, 2011 lululemon athletica inc. [NASDAQ:LULU; TSX:LLL] today
announced financial results for the first quarter ended May 1, 2011.
For the first quarter ended May 1, 2011:
| Net revenue for the quarter increased 35% to $186.8 million from $138.3
million in the first quarter of fiscal 2010. |
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| Comparable stores sales for the first quarter increased by 16% on a constant
dollar basis. |
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| Direct to consumer revenue increased 51% to $13.8 million, or 7.4% of total
Company sales, in the first quarter of fiscal 2011, an increase from 6.6% of
total Company sales in the first quarter of fiscal 2010. |
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| Gross profit for the quarter increased by 48% to $109.7 million, and as a
percentage of net revenue gross profit increased to 58.7% for the quarter from
53.8% in the first quarter of fiscal 2010. The increase included 140 basis points
from the non-recurring adjustment for the recognition of input tax credits in the
first quarter of fiscal 2011. |
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| Income from operations for the quarter increased by 59% to $51.7 million, and
as a percentage of net revenue was 27.7% compared to 23.5% of net revenue in the
first quarter of fiscal 2010. |
||
| The tax rate for the quarter was 36.3% compared to 40.0% a year ago. The
decrease resulted from a revision to managements plans for repatriation of
unremitted earnings of the Canadian operating subsidiary. |
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| Diluted earnings per share for the quarter were $0.46 on net income of $33.4
million, compared to diluted earnings per share of $0.27 on net income of $19.6
million in the first quarter of fiscal 2010. The increase included $0.02 in
diluted earnings per share from the non-recurring adjustment for the recognition
of input tax credits in the first quarter of fiscal 2011. |
The Company ended the first quarter of fiscal 2011 with $260.9 million in cash and cash equivalents
compared to $173.6 million at the end of the first quarter of fiscal 2010. Inventory at the end of
the first quarter of fiscal 2011 totaled $64.4 million compared to $50.8 million at the end of the
first quarter of fiscal 2010. The Company ended the quarter with 142 stores in North America and
Australia.
Christine Day, lululemons CEO stated: Weve had a great start to the year and a very successful
first quarter considering our lean inventory levels. We were able to generate strong sales
and earnings growth while also focusing on a successful transition of
our e-Commerce platform in-house. While catious about the
macro-environment, we remain confident that our business momentum
will continue through fiscal 2011.
Updated Outlook
For the second quarter of fiscal 2011, we expect net revenue to be in the range of $200 million to
$205 million based on a comparable-store sales percentage increase in the mid-to-upper teens on a
constant-dollar basis. Diluted earnings per share are expected to be in the range of $0.42 to $0.44
for the quarter. This assumes 72.6 million diluted weighted-average shares outstanding and a 36%
tax rate.
Creating components for people to live a long, healthy and fun life
For the full fiscal 2011, we now expect net revenue to be in the range of $915 million to $930
million and diluted earnings per share are expected to be in the range of $2.10 to $2.16 for the
full year. This assumes a tax rate of 36% and 72.8 million diluted weighted-average shares
outstanding.
Conference Call Information
A conference call to discuss first quarter results is scheduled for today, June 10, 2011, at 9:00
a.m. EST. 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 (NASDAQ:LULU; TSX:LLL) is a yoga-inspired athletic apparel company that creates
components for people to live a long, healthy and fun life. 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; the risk that increasing costs of raw
materials could increase our cost of goods sold and cause our results of operations and financial
condition to suffer; increasing labor costs and other factors associated with the production of our
products in China, which could increase the costs to produce 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
Joseph Teklits / Jean Fontana
ICR, Inc.
203-682-8200
Media Contact:
Alecia Pulman
ICR, Inc.
203-682-8224
Alecia Pulman
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 Weeks Ended | Thirteen Weeks Ended | |||||||
May 1, 2011 | May 2, 2010 | |||||||
(unaudited) | (unaudited) | |||||||
Net revenue |
$ | 186,780 | $ | 138,297 | ||||
Costs of goods sold |
77,096 | 63,940 | ||||||
Gross profit |
109,684 | 74,357 | ||||||
As a percent of net revenue |
58.7 | % | 53.8 | % | ||||
Selling, general and administrative expenses |
57,997 | 41,883 | ||||||
As a percent of net revenue |
31.1 | % | 30.3 | % | ||||
Income from operations |
51,687 | 32,474 | ||||||
As a percent of net revenue |
27.7 | % | 23.5 | % | ||||
Other income (expense), net |
904 | 161 | ||||||
Income before provision for income taxes |
52,591 | 32,635 | ||||||
Provision for income taxes |
19,075 | 13,047 | ||||||
Net income |
33,516 | 19,588 | ||||||
Net income attributable to non-controlling
interest |
144 | | ||||||
Net income attributable to lululemon
athletica inc. |
$ | 33,372 | $ | 19,588 | ||||
Basic earnings per share |
$ | 0.47 | $ | 0.28 | ||||
Diluted earnings per share |
$ | 0.46 | $ | 0.27 | ||||
Basic weighted-average shares outstanding |
71,380 | 70,599 | ||||||
Diluted weighted-average shares outstanding |
72,455 | 71,582 |
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lululemon athletica inc.
Condensed Consolidated Balance Sheets
Expressed in thousands
Condensed Consolidated Balance Sheets
Expressed in thousands
May 1, 2011 | January 30, 2011 | |||||||
(unaudited) | (audited) | |||||||
ASSETS |
||||||||
Current assets |
||||||||
Cash and cash equivalents |
$ | 260,871 | $ | 316,286 | ||||
Inventories |
64,423 | 57,469 | ||||||
Other current assets |
24,694 | 15,524 | ||||||
Total current assets |
349,988 | 389,279 | ||||||
Property and equipment, net |
144,917 | 70,954 | ||||||
Goodwill and intangible assets, net |
28,769 | 27,112 | ||||||
Deferred income taxes and other assets |
12,786 | 11,957 | ||||||
Total assets |
$ | 536,460 | $ | 499,302 | ||||
LIABILITIES AND STOCKHOLDERS EQUITY |
||||||||
Current liabilities |
||||||||
Accounts payable |
$ | 3,409 | $ | 6,659 | ||||
Other current liabilities |
55,581 | 60,306 | ||||||
Income taxes payable |
| 18,399 | ||||||
Total current liabilities |
58,990 | 85,364 | ||||||
Non-current liabilities |
21,609 | 19,645 | ||||||
Stockholders equity |
455,861 | 394,293 | ||||||
Total liabilities and stockholders equity |
$ | 536,460 | $ | 499,302 | ||||
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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
Thirteen Weeks Ended | Thirteen Weeks Ended | |||||||
May 1, 2011 | May 2, 2010 | |||||||
(unaudited) | (unaudited) | |||||||
Cash flows from operating activities |
||||||||
Net income |
$ | 33,516 | $ | 19,588 | ||||
Items not affecting cash |
6,277 | 9,026 | ||||||
Other, including net changes in other
non-cash balances |
(34,138 | ) | (16,042 | ) | ||||
Net cash provided by operating activities |
5,655 | 12,572 | ||||||
Net cash used in investing activities |
(74,831 | ) | (6,157 | ) | ||||
Net cash provided by financing activities |
8,158 | 4,982 | ||||||
Effect of exchange rate changes on cash |
5,603 | 2,670 | ||||||
Increase (decrease) in cash and cash equivalents |
(55,415 | ) | 14,067 | |||||
Cash and cash equivalents, beginning of period |
$ | 316,286 | $ | 159,573 | ||||
Cash and cash equivalents, end of period |
$ | 260,871 | $ | 173,640 | ||||
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lululemon athletica inc.
Reconciliation of Non-GAAP Financial Measure
Constant-dollar changes
Reconciliation of Non-GAAP Financial Measure
Constant-dollar changes
Thirteen Weeks Ended | Thirteen Weeks Ended | |||||||
May 1, 2011 | May 2, 2010 | |||||||
% Change | % Change | |||||||
Comparable-store sales (GAAP) |
19 | % | 51 | % | ||||
Decrease due to foreign exchange rate
changes |
(3 | )% | (16 | )% | ||||
Comparable-store sales in constant dollars |
16 | % | 35 | % |
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