lululemon athletica inc. (NASDAQ:LULU) (TSX:LLL) today announced financial results for the fourth quarter and fiscal year ended January 29, 2012. Christine Day, lululemon’s CEO, stated: “Reaching a billion dollars in revenue is clearly an important milestone that as a company we can all be very proud of. But far more important than the number itself are the beliefs, values, culture and people that achieved it. We really are so much more than our numbers; it is the everyday actions of our dedicated team that translates into an unparalleled guest experience and allows us to achieve our ultimate goal of elevating the world.” For the fourth quarter ended January 29, 2012:
- Net revenue for the quarter increased 51.4% to $371.5 million from $245.4 million in the fourth quarter of fiscal 2010.
- Comparable stores sales for the fourth quarter increased by 26% on a constant dollar basis.
- Direct to consumer revenue increased 103.6% to $50.1 million, or 13.5% of net revenue, in the fourth quarter of fiscal 2011, from 10.0% of net revenue in the same period last year.
- Gross profit for the quarter increased by 45.7% to $209.0 million, and as a percentage of net revenue gross profit decreased to 56.3% for the quarter from 58.5% in the fourth quarter of fiscal 2010.
- Income from operations for the quarter increased by 62.8% to $116.1 million, and as a percentage of net revenue was 31.2% compared to 29.1% of net revenue in the fourth quarter of fiscal 2010.
- The tax rate for the quarter was 36.5% compared to 23.5% a year ago. The change in rate resulted from the prior year 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 $0.51 on net income of $73.5 million, compared to diluted earnings per share of $0.38 on net income of $54.8 million in the fourth quarter of fiscal 2010.
- Net revenue for the fiscal year increased 40.6% to $1.0 billion from $711.7 million in fiscal 2010.
- Comparable stores sales for fiscal 2011 increased by 20% on a constant dollar basis, resulting in a record $2,004 annual sales per square foot for comp stores as at January 29, 2012.
- Direct to consumer revenue increased 85.4% to $106.3 million, or 10.6% of net revenue in fiscal 2011, from 8.1% of net revenue in fiscal 2010.
- Gross profit for fiscal 2011 increased by 44.1% to $569.3 million, from $394.9 million in fiscal 2010. As a percentage of net revenue, gross profit increased to 56.9% compared to 55.5% in fiscal 2010.
- Income from operations increased by 59.1% to $287.0 million, from $180.4 million in fiscal 2010. As a percentage of net revenue, income from operations increased to 28.7% compared to 25.3% of net revenue in fiscal 2010.
- The tax rate for fiscal 2011 was 36.1% compared to 33.3% for fiscal 2010. The change in tax rate was due to the proportional increase of taxable income in the United States compared to taxable income in Canada.
- Presented on a post-split basis, diluted earnings per share in fiscal 2011 increased 49.4% to $1.27 on net income of $184.1 million, compared to diluted earnings per share of $0.85 on net income of $121.8 million in fiscal 2010.
Updated OutlookFor the first quarter of fiscal 2012, we expect net revenue to be in the range of $265 million to $270 million based on a comparable-store sales percentage increase in the low 20s on a constant-dollar basis. Diluted earnings per share are expected to be in the range of $0.28 to $0.29 for the quarter. This assumes 145.4 million diluted weighted-average shares outstanding and a 36.5% tax rate. For fiscal 2012, we expect net revenue to be in the range of $1.3 billion to $1.325 billion and diluted earnings per share are expected to be in the range of $1.50 to $1.57 for the full year. This assumes a tax rate of 36.5% and 145.6 million diluted weighted-average shares outstanding. Conference Call Information A conference call to discuss fiscal 2011 results is scheduled for today, March 22, 2012, at 9:00 a.m. Eastern time. 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 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 management’s 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.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 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 OperationsExpressed in thousands, except per share amounts|
|January 29,2012(unaudited)||January 30,2011(unaudited)||January 29,2012||January 30,2011|
|Costs of goods sold||162,502||101,939||431,569||316,757|
|As a percent of net revenue||56.3%||58.5%||56.9%||55.5%|
|Selling, general and administrative expenses||92,951||71,483||282,312||212,784|
|As a percent of net revenue||25.0%||29.1%||28.2%||29.9%|
|Provision for impairment and lease exit costs||–||679||–||1,772|
|Income from operations||116,067||71,298||286,958||180,391|
|As a percent of net revenue||31.2%||29.1%||28.7%||25.3%|
|Other income (expense), net||380||542||2,500||2,886|
|Income before provision for income taxes||116,447||71,840||289,458||183,277|
|Provision for income taxes||42,558||16,873||104,494||61,080|
|Net income attributable to non-controlling interest||371||201||901||350|
|Net income attributable to lululemon athletica inc.||$73,518||$54,766||$184,063||$121,847|
|Net Basic earnings per share||$0.51||$0.39||$1.29||$0.86|
|Net Diluted earnings per share||$0.51||$0.38||$1.27||$0.85|
|Basic weighted-average shares outstanding||143,501||142,174||143,196||141,720|
|Diluted weighted-average shares outstanding||145,344||144,362||145,278||143,858|
|lululemon athletica inc.Condensed Consolidated Balance SheetsExpressed in thousands|
|January 29,2012||January 30,2011|
|Cash and cash equivalents||$409,437||$316,286|
|Other current assets||13,559||15,524|
|Total current assets||527,093||389,279|
|Property and equipment, net||162,941||70,954|
|Goodwill and intangible assets, net||31,872||27,112|
|Deferred income taxes and other assets||12,728||11,957|
|LIABILITIES AND STOCKHOLDERS’ EQUITY|
|Other current liabilities||80,183||60,306|
|Income taxes payable||8,720||18,399|
|Total current liabilities||103,439||85,364|
|Total liabilities and stockholders’ equity||$734,634||$499,302|
|lululemon athletica inc.Condensed Consolidated Statements of Cash FlowsExpressed in thousands|
|Fifty-Two Weeks EndedJanuary 29, 2012||Fifty-Two Weeks EndedJanuary 30, 2011|
|Cash flows from operating activities|
|Items not affecting cash||32,381||33,832|
|Other, including net changes in other non-cash balances||(13,730)||23,966|
|Net cash provided by operating activities||203,615||179,995|
|Net cash used in investing activities||(122,311)||(42,839)|
|Net cash provided by financing activities||15,364||13,699|
|Effect of exchange rate changes on cash||(3,517)||5,858|
|Increase in cash and cash equivalents||93,151||156,713|
|Cash and cash equivalents, beginning of year||$316,286||$159,573|
|Cash and cash equivalents, end of year||$409,437||$316,286|
|lululemon athletica inc.Reconciliation of Non-GAAP Financial MeasureConstant-dollar changes(unaudited)|
|Thirteen WeeksEndedJanuary 29, 2012||Thirteen WeeksEndedJanuary 30, 2011|
|% Change||% Change|
|Comparable-store sales (GAAP)||25%||32%|
|Increase (decrease) due to foreign exchange rate changes||1%||(4)%|
|Comparable-store sales in constant dollars||26%||28%|
|lululemon athletica inc.Store Count and Square Footage1Year ended January 29, 2012Square Footage Expressed in Thousands|
|Number ofStores Openat theBeginning ofthe Quarter||Number ofStoresOpened /AcquiredDuring theQuarter2||Number ofStoresClosedDuring theQuarter||Number ofStores Openat the End ofthe Quarter|
|Total GrossSquare Feetat theBeginning ofthe Quarter||Gross SquareFeet AddedDuring theQuarter2,3||Gross SquareFeet LostDuring theQuarter2,3||Total GrossSquare Feetat the End ofthe Quarter|