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Lululemon Athletica Inc. Announces Third Quarter Fiscal 2012 Results

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.

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 management’s 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 laws related to our human resources policies or other procedures; 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 29, 2012, 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.

       
 

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
 
Basic weighted-average shares outstanding 144,057 143,370 143,903 143,096
Diluted weighted-average shares outstanding 145,748 145,349 145,750 145,230
   
 

lululemon athletica inc. Condensed Consolidated Balance Sheets Expressed in thousands

 

October 28, 2012

January 29, 2012

(unaudited) (audited)
ASSETS
Current assets
Cash and cash equivalents $

439,423

 

$

409,437

 

Inventories 164,726 104,097
Other current assets   36,935     13,559  
 
Total current assets 641,084 527,093
 
Property and equipment, net 204,052 162,941
 
Goodwill and intangible assets, net 30,530 31,872
 
Deferred income taxes and other assets   13,115     12,728  
Total assets $ 888,781   $ 734,634  
 
 
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable $ 6,569 $ 14,536
Other current liabilities 77,790 80,183
Income taxes payable   6,831     8,720  
 
Total current liabilities 91,190 103,439
 
Non-current liabilities 29,770 25,014
 
Stockholders’ equity   767,821     606,181  
Total liabilities and stockholders’ equity $ 888,781   $ 734,634  
 
 

lululemon athletica inc. Condensed Consolidated Statements of Cash Flows Expressed in thousands

       
Thirty-nine Weeks Ended

October 28, 2012

Thirty-nine Weeks Ended

October 30, 2011

(unaudited) (unaudited)
Cash flows from operating activities
Net income $ 162,056 $ 111,076
Items not affecting cash 35,271 12,564
Other, including net changes in other non-cash balances   (84,087 )   (70,120 )
Net cash provided by operating activities 113,240 53,520
Net cash used in investing activities (72,041 ) (106,344 )
 
Net cash (used in) provided by financing activities (11,863 ) 14,474
 
Effect of exchange rate changes on cash   650     (990 )
 
Increase (decrease) in cash and cash equivalents 29,986 (39,340 )
Cash and cash equivalents, beginning of period $ 409,437   $ 316,286  
Cash and cash equivalents, end of period $ 439,423   $ 276,946  
   
 

lululemon athletica inc. Reconciliation of Non-GAAP Financial Measure Constant-dollar changes

 

Thirteen Weeks Ended October 28, 2012

Thirteen Weeks Ended October 30, 2011

% Change % Change
Comparable-store sales (GAAP) 18% 18%
 
Adjustments due to changes in foreign exchange rates 0% (2)%
 
Comparable-store sales in constant dollars 18% 16%
                 
 

lululemon athletica inc. Store Count and Square Footage 1 Thirty-Nine Weeks Ended October 28, 2012 Square Footage Expressed in Thousands

 

 

Number of Stores Open at the Beginning of the Quarter

Number of Stores Opened / Acquired During the Quarter 2

Number of Stores Closed During the Quarter

Number of Stores Open at the End of the Quarter

 
1 st Quarter 174 6 0 180
2 nd Quarter 180 9 0 189
3 rd Quarter 189 12 0 201
 

Total Gross Square Feet at the Beginning of the Quarter

Gross Square Feet Added During the Quarter 2,3

Gross Square Feet Lost During the Quarter 2,3

Total Gross Square Feet at the End of the Quarter

 
1 st Quarter 494 14 0 508
2 nd Quarter 508 30 0 538
3 rd Quarter 538 35 0 573

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 the quarters which are branded lululemon athletica and ivivva athletica.

3 Gross square feet added/lost during the quarters includes net square foot additions for corporate-owned stores which have been renovated or relocated in the quarter.



Stock quotes in this article: LLL, LULU 

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