Lululemon’s net revenue increased in Q4

In A Nutshell: Like most of its peers, Lululemon declined to provide financial guidance, given how the coronavirus pandemic has clouded the economic outlook. The company said it will provide updates “as the situation warrants.”

Lululemon said it is heeding the advice of international public health officials and following the orders of local authorities in assessing the viability of its 491 retail locations. The company closed its brick-and-mortars in Mainland China during the month of February, but says all but one of these locations has since reopened for business.

This month, Lululemon temporarily shut down all of its retail operations across North America, Europe, Malaysia and New Zealand, as well as its distribution center in Sumner, Wash. “These locations currently remain closed,” the company said, until further notice.

Sales: In the fiscal fourth quarter ended Feb. 2, the cult-favorite athletic apparel retailer saw net revenue reach $1.4 billion—up 20 percent from the comparable period in fiscal 2018. Total comparable sales also increased by 20 percent.

Store sales for the fourth quarter increased 9 percent from the same period in 2018, while e-commerce sales saw a 41 percent year-over-year net revenue increase.

The athleisure favorite’s total comparable sales grew by 17 percent from the year prior while store sales increased by 9 percent. Overall on-site revenue grew 35 percent from 2018.

Gross profit grew to $2.2 billion, an increase of 22 percent compared to fiscal 2018. Gross margin reached 58 percent, an increase of 70 basis points.

For the fiscal 2019 year, the company’s net revenue increased by 21 percent compared to the year prior, reaching $4 billion.

Lululemon ended the fiscal 2019 year with $1.1 billion in cash and cash equivalents, the company said in a statement, compared with the $881.3 million from the prior-year period.

Inventories increased by 28 percent to $518.5 million, compared with $404.8 million at the end of fiscal 2018.

Earnings: Lululemon’s diluted earnings per share were $4.93 compared with $3.61 in fiscal 2018, while adjusted diluted earnings per share in fiscal 2018 were $3.84.

In 2019, the company repurchased 1.1 million shares of its common stock at an average cost of $164.26 per share.

CEO’s Take: Lululemon CEO Calvin McDonald said: “2019 was a strong year for lululemon, as our teams executed against our Power of Three growth plan. We are now navigating an extraordinary environment, which is currently impacting our business. The strength of our brand and strong financial position will help us manage through the day-to-day, while continuing to effectively plan for and invest in our future.

“I want to thank our people around the globe for the results they delivered in 2019, and for their perseverance and commitment to our brand each and every day,” he added.

Source: Sourcing Journal