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8-K - FORM 8-K - lululemon athletica inc. | c25309e8vk.htm |
Exhibit 99.1
LULULEMON ATHLETICA INC. ANNOUNCES THIRD QUARTER FISCAL 2011 RESULTS
Third Quarter Net Revenue Increased 31% to $230.2 million
Third Quarter Diluted EPS of $0.27
Third Quarter Net Revenue Increased 31% to $230.2 million
Third Quarter Diluted EPS of $0.27
Vancouver, Canada December 1, 2011 lululemon athletica inc. [NASDAQ:LULU; TSX:LLL] today
announced financial results for the third quarter ended October 30, 2011.
For the thirteen weeks ended October 30, 2011:
| Net revenue for the quarter increased 31% to $230.2 million from $175.8
million in the third quarter of fiscal 2010. |
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| Comparable stores sales for
the third quarter increased by 16% on a
constant dollar basis. |
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| Direct to consumer revenue increased 71% to $23.9 million, or 10.4% of
total Company revenues, in the third quarter of fiscal 2011, an increase from
8.0% of total Company revenues in the third quarter of fiscal 2010. |
||
| Gross profit for the quarter increased 33% to $128.5 million, and as a
percentage of net revenue gross profit increased to 55.8% for the quarter from
55.1% in the third quarter of fiscal 2010. |
||
| Income from operations for the quarter increased 41% to $59.7 million,
and as a percentage of net revenue was 25.9% compared to 24.1% of net revenue in
the third quarter of fiscal 2010. |
||
| The tax rate for the quarter was 35.5% compared to 38.9% a year ago. The
decrease resulted from a revision to managements plans for repatriation of
unremitted earnings of the Canadian operating subsidiary. |
||
| Presented on a post-split basis, diluted earnings per share for the
quarter were $0.27 on net income of $38.8 million, compared to diluted earnings
per share of $0.18 on net income of $25.7 million in the third quarter of fiscal
2010. |
For the thirty-nine weeks ended October 30, 2011:
| Net revenue for the first three quarters increased 35% to $629.3 million
from $466.3 million in the same period of fiscal 2010. |
||
| Comparable stores sales for the first three quarters increased by 18% on
a constant dollar basis. |
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| Direct to consumer revenue increased 72% to $56.2 million, or 8.9% of
total Company revenues, in the first three quarters of fiscal 2011, an increase
from 7.0% of total Company revenues in the first three quarters of fiscal 2010. |
||
| Gross profit for the quarter increased 43% to $360.3 million, and as a
percentage of net revenue gross profit increased to 57.2% for the first three
quarters from 53.9% in the same period of fiscal 2010.
|
||
| Income from operations for the first three quarters increased 57% to
$170.9 million, and as a percentage of net revenue was 27.2% compared to 23.4% of
net revenue in the same period of fiscal 2010. |
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| The tax rate for the first three quarters was 35.8% compared to 39.7% a
year ago. The decrease resulted from a revision to managements plans for
repatriation of unremitted earnings of the Canadian operating subsidiary. |
||
| Presented on a post-split basis, diluted earnings per share for the first
three quarters were $0.76 on net income of $110.5 million, compared to diluted
earnings per share of $0.47 on net income of $67.1 million in the same period of
fiscal 2010. |
The Company ended the third quarter of fiscal 2011 with $276.9 million in cash and cash equivalents
compared to $224.8 million at the end of the third quarter of fiscal 2010. Inventory at the end of
the third quarter of fiscal 2011 totaled $129.2 million compared to $73.0 million at the end of the
third quarter of fiscal 2010. The Company ended the quarter with 165 stores in North America and
Australia.
Christine Day, lululemons CEO stated: We are proud to have produced another very healthy quarter of financial results. In the third quarter we achieved year
over year revenue growth of 31%, EPS growth of 50% and comparable sales per square foot of $1,880. We are set to finish
2011 with a stronger brand, a stronger organization and we remain focused on our strategic growth opportunities.
Updated Outlook
For
the fourth quarter of fiscal 2011, we expect net revenue to be in the
range of $327 million to
$332 million based on a comparable-store sales percentage
increase in the low to mid-teens on a
constant-dollar basis. Diluted earnings per share are expected to be in the range of $0.40 to $0.42
for the quarter. This assumes 145.3 million diluted weighted-average shares outstanding and a 36%
tax rate.
Conference Call Information
A conference call to discuss third quarter results is scheduled for today, December 1, 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.
The presentation of this financial information is not intended to be considered in isolation or as
a substitute for, or superior to, the financial information prepared and presented in accordance
with GAAP. For more information on this non-GAAP financial measure, please see the table captioned
Reconciliation of Non-GAAP Financial Measure Constant dollar changes included in the
accompanying financial tables, which includes more detail on the GAAP financial measure that is
most directly comparable to non-GAAP financial measures and the related reconciliations between
these financial measures.
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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: an economic downturn or economic uncertainty in our key markets;
increasing product costs and decreasing selling prices; our inability to anticipate consumer
preferences and successfully develop and introduce new, innovative and updated products; our
inability to accurately forecast customer demand for our products; our inability to manage our
growth and the increased complexity of our business effectively; the fluctuating costs of raw
materials; our reliance on and limited control over third-party suppliers to provide fabrics for
and to produce our products; our highly competitive market and increasing competition; an
unforeseen disruption of our information systems; our inability to deliver our products to the
market and to meet customer expectations due to problems with our distribution system; our
inability to cancel store leases if an existing or new store is not profitable; increasing labor
costs and other factors associated with the production of our products in China; our inability to
successfully open new store locations in a timely manner; our failure to maintain the value and
reputation of our brand; our failure to comply with trade and other regulations; our competitors
manufacturing and selling products based on our fabrics and manufacturing technology at lower
prices than we can; our failure to protect our intellectual property rights; and other risk factors
detailed in our Annual Report on Form 10-K for the fiscal year ended January 30, 2011 and our
Quarterly Reports on Form 10-Q for fiscal 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.
ICR, Inc.
203-682-8200
Media Contact:
Alecia Pulman
ICR, Inc.
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 | Thirty-nine | Thirty-nine | |||||||||||||
Weeks Ended | Weeks Ended | Weeks Ended | Weeks Ended | |||||||||||||
October 30, | October 31, | October 30, | October 31, | |||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||
Net revenue |
$ | 230,216 | $ | 175,800 | $ | 629,319 | $ | 466,305 | ||||||||
Costs of goods sold |
101,720 | 78,968 | 269,067 | 214,818 | ||||||||||||
Gross profit |
128,496 | 96,832 | 360,252 | 251,487 | ||||||||||||
As a percent of net revenue |
55.8 | % | 55.1 | % | 57.2 | % | 53.9 | % | ||||||||
Selling, general and
administrative expenses |
68,775 | 54,456 | 189,361 | 142,394 | ||||||||||||
As a percent of net revenue |
29.9 | % | 31.0 | % | 30.1 | % | 30.5 | % | ||||||||
Income from operations |
59,721 | 42,376 | 170,891 | 109,093 | ||||||||||||
As a percent of net revenue |
25.9 | % | 24.1 | % | 27.2 | % | 23.4 | % | ||||||||
Other income (expense), net |
619 | 91 | 2,120 | 2,345 | ||||||||||||
Income before provision for
income taxes |
60,340 | 42,467 | 173,011 | 111,438 | ||||||||||||
Provision for income taxes |
21,399 | 16,532 | 61,935 | 44,207 | ||||||||||||
Net income |
38,941 | 25,935 | 111,076 | 67,231 | ||||||||||||
Net income attributable to
non-controlling interest |
147 | 234 | 531 | 150 | ||||||||||||
Net income attributable to
lululemon athletica inc. |
$ | 38,794 | $ | 25,701 | $ | 110,545 | $ | 67,081 | ||||||||
Basic earnings per share |
$ | 0.27 | $ | 0.18 | $ | 0.77 | $ | 0.48 | ||||||||
Diluted earnings per share |
$ | 0.27 | $ | 0.18 | $ | 0.76 | $ | 0.47 | ||||||||
Basic weighted-average shares
outstanding |
143,370 | 141,876 | 143,096 | 141,572 | ||||||||||||
Diluted weighted-average
shares outstanding |
145,349 | 143,670 | 145,230 | 143,564 |
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lululemon athletica inc.
Condensed Consolidated Balance Sheets
Expressed in thousands
Condensed Consolidated Balance Sheets
Expressed in thousands
October 30, 2011 | January 30, 2011 | |||||||
(unaudited) | (audited) | |||||||
ASSETS |
||||||||
Current assets |
||||||||
Cash and cash equivalents |
$ | 276,946 | $ | 316,286 | ||||
Inventories |
129,169 | 57,469 | ||||||
Other current assets |
21,701 | 15,524 | ||||||
Total current assets |
427,816 | 389,279 | ||||||
Property and equipment, net |
153,119 | 70,954 | ||||||
Goodwill and intangible assets, net |
32,351 | 27,112 | ||||||
Deferred income taxes and other assets |
22,784 | 11,957 | ||||||
Total assets |
$ | 636,070 | $ | 499,302 | ||||
LIABILITIES AND STOCKHOLDERS EQUITY |
||||||||
Current liabilities |
||||||||
Accounts payable |
$ | 6,040 | $ | 6,659 | ||||
Other current liabilities |
76,474 | 60,306 | ||||||
Income taxes payable |
| 18,399 | ||||||
Total current liabilities |
82,514 | 85,364 | ||||||
Non-current liabilities |
24,466 | 19,645 | ||||||
Stockholders equity |
529,090 | 394,293 | ||||||
Total liabilities and stockholders equity |
$ | 636,070 | $ | 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
Thirty-nine Weeks Ended | Thirty-nine Weeks Ended | |||||||
October 30, 2011 | October 31, 2010 | |||||||
(unaudited) | (unaudited) | |||||||
Cash flows from operating activities |
||||||||
Net income |
$ | 111,076 | $ | 67,231 | ||||
Items not affecting cash |
12,564 | 36,201 | ||||||
Other, including net changes in other
non-cash balances |
(70,120 | ) | (15,515 | ) | ||||
Net cash provided by operating activities |
53,520 | 87,917 | ||||||
Net cash used in investing activities |
(106,344 | ) | (34,433 | ) | ||||
Net cash provided by financing activities |
14,474 | 7,945 | ||||||
Effect of exchange rate changes on cash |
(990 | ) | 3,773 | |||||
Increase (decrease) in cash and cash equivalents |
(39,340 | ) | 65,202 | |||||
Cash and cash equivalents, beginning of period |
$ | 316,286 | $ | 159,573 | ||||
Cash and cash equivalents, end of period |
$ | 276,946 | $ | 224,775 | ||||
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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 | |||||||
October 30, 2011 | October 31, 2010 | |||||||
% Change | % Change | |||||||
Comparable-store sales (GAAP) |
18 | % | 32 | % | ||||
Adjustments due to changes in foreign
exchange rates |
(2 | )% | (3 | )% | ||||
Comparable-store sales in constant dollars |
16 | % | 29 | % |
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lululemon athletica inc.
Store Count and Square Footage1
Quarter ended October 30, 2011
Square Footage Expressed in Thousands
Store Count and Square Footage1
Quarter ended October 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 | Quarter | Quarter | the Quarter | |||||||||||||
1st Quarter |
133 | 5 | 0 | 138 | ||||||||||||
2nd Quarter |
138 | 9 | 0 | 147 | ||||||||||||
3rd Quarter |
147 | 18 | 0 | 165 |
Total Gross | ||||||||||||||||
Square Feet | Gross Square | Gross Square | Total Gross | |||||||||||||
at the | Feet Added | Feet Lost | Square Feet | |||||||||||||
Beginning of | During the | During the | at the End of | |||||||||||||
the Quarter | Quarter2 | Quarter2 | the Quarter | |||||||||||||
1st Quarter |
374 | 12 | 0 | 386 | ||||||||||||
2nd Quarter |
386 | 31 | 1 | 416 | ||||||||||||
3rd Quarter |
416 | 56 | 2 | 470 |
1 | Store count and square footage summary includes corporate-owned stores which are
branded lululemon athletica and ivivva athletica. |
|
2 | Gross square feet added/lost 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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