lululemon athletica inc. (NASDAQ:LULU) today announced financial results for the first quarter ended May 4, 2014 and that its board of directors has approved a stock repurchase program to buy back up to $450 million of its common shares in the open market at prevailing market prices. The timing and actual number of common shares to be repurchased will depend upon market conditions and other factors, in accordance with Securities and Exchange Commission requirements.
The share buyback program is intended to create shareholder value by making opportunistic repurchases during periods of favorable market conditions and is expected to be completed in two years. Shares may be repurchased from time to time on the open market, through block trades or otherwise. Purchases may be started or stopped at any time without prior notice depending on market conditions and other factors.
For the first quarter ended May 4, 2014:
- Net revenue for the quarter increased 11% to $384.6 million from $345.8 million in the first quarter of fiscal 2013.
- Total comparable sales on a combined basis increased 1% for the first quarter on a constant dollar basis. Comparable corporate-store sales for the first quarter decreased by 4% on a constant dollar basis and direct to consumer revenue increased 25% on a constant dollar basis.
- Direct to consumer revenue increased to $66.0 million, or 17.2% of total Company revenues, in the first quarter of fiscal 2014, an increase from 15.6% of total Company revenues in the first quarter of fiscal 2013.
- Gross profit for the quarter increased 15% to $195.7 million, and as a percentage of net revenue gross profit increased to 50.9% for the quarter from 49.4% in the first quarter of fiscal 2013. Gross profit for the first quarter of fiscal 2013 included a provision of $17.5 million related to the pull-back of black Luon pants.
- Income from operations for the quarter increased 6% to $69.8 million, and as a percentage of net revenue was 18.2% compared to 19.1% of net revenue in the first quarter of fiscal 2013.
- Tax expense for the quarter was $52.5 million, which included a one-time adjustment of $30.9 million for the planned repatriation of foreign earnings that will be used to fund the share buyback program. The normalized tax rate before the $30.9 million non-recurring adjustment would have been 30.1%, compared to 29.8% a year ago. The tax rate for the first quarter of fiscal 2014, including the one-time adjustment, was 73.4%.
- Excluding the one-time adjustment, diluted earnings per share were $0.34 in the first quarter of fiscal 2014. Including the non-recurring adjustment, diluted earnings per share for the quarter were $0.13, which included a $0.21 per share impact from the planned repatriation of foreign earnings.
The Company ended the first quarter of fiscal 2014 with $752.0 million in cash and cash equivalents compared to $588.4 million at the end of the first quarter of fiscal 2013. Inventory at the end of the first quarter of fiscal 2014 totaled $177.4 million compared to $143.7 million at the end of the first quarter of fiscal 2013. The Company ended the quarter with 263 stores.