In Trends

lululemon announces financial results

EXCLUSIVE INTERVIEW with lululemon

The Company reported diluted earnings per share of $0.88 for the fourth quarter of fiscal 2017. Excluding the impact of the ivivva restructuring and U.S. tax reform, the Company reported adjusted diluted earnings per share of $1.33.

The summary below provides both GAAP and adjusted non-GAAP financial measures. The adjusted financial measures exclude the impact of the ivivva restructuring, the provisional amounts recognized in connection with U.S. tax reform, and certain other discrete tax items which were recognized during fiscal 2016.

SEE ALSO : EXCLUSIVE INTERVIEW with lululemon

For the fourth quarter ended January 28, 2018:
• Net revenue was $928.8 million, an increase of 18% compared to the fourth quarter of fiscal 2016. On a constant dollar basis, net revenue increased 16%.
• Total comparable sales increased 12%, or increased 11% on a constant dollar basis.
– Comparable store sales increased 2%, or increased 1% on a constant dollar basis.
– Direct to consumer net revenue increased 44%, or increased 42% on a constant dollar basis.
• Gross profit was $522.5 million, an increase of 22% compared to the fourth quarter of fiscal 2016. Adjusted gross profit was $522.4 million, an increase of 22%.
• Gross margin was 56.3%, an increase of 210 basis points compared to the fourth quarter of fiscal 2016. Adjusted gross margin was 56.2%, an increase of 200 basis points.
• Income from operations was $256.3 million, an increase of 30% compared to the fourth quarter of fiscal 2016. Adjusted income from operations increased $61.5 million, or 31%, to $258.1 million.
• Operating margin was 27.6%, an increase of 270 basis points compared to the fourth quarter of fiscal 2016. Adjusted operating margin was 27.8%, an increase of 290 basis points.
• Income tax expense was $137.7 million compared to $61.4 million in the fourth quarter of fiscal 2016 and the effective tax rate was 53.5% compared to 31.1%. The adjusted effective tax rate was 30.6% compared to 30.6% in the fourth quarter of fiscal 2016.
• Diluted earnings per share were $0.88 compared to $0.99 in the fourth quarter of fiscal 2016. Adjusted diluted earnings per share were $1.33 compared to $1.00 for the fourth quarter of fiscal 2016.

For the fiscal year ended January 28, 2018:
• Net revenue was $2.6 billion, an increase of 13% compared to fiscal 2016. On a constant dollar basis, net revenue increased 12%.
• Total comparable sales increased 7%, or increased 7% on a constant dollar basis.
– Comparable store sales increased 1%, or increased 1% on a constant dollar basis.
– Direct to consumer net revenue increased 27% or increased 27% on a constant dollar basis.
• Company-operated stores which have been open for at least one year averaged sales of $1,554 per square foot.
• Gross profit was $1.4 billion, an increase of 17% compared to fiscal 2016. Adjusted gross profit was $1.4 billion, an
increase of 17%.
• Gross margin was 52.8%, an increase of 160 basis points compared to fiscal 2016. Adjusted gross margin was 53.1%, an increase of 190 basis points.
• Income from operations was $456.0 million, an increase of 8% compared to fiscal 2016. Adjusted income from operations increased $82.1 million, or 19%, to $503.2 million.
• Operating margin was 17.2%, a decrease of 80 basis points compared to fiscal 2016. Adjusted operating margin was 19.0%, an increase of 100 basis points.
• Income tax expense was $201.3 million compared to $119.3 million in fiscal 2016 and the effective tax rate was 43.8% compared to 28.2% for fiscal 2016. The adjusted effective tax rate was 30.5% compared to 30.7% for fiscal 2016.
• Diluted earnings per share were $1.90 compared to $2.21 in fiscal 2016. Adjusted diluted earnings per share were $2.59 compared to $2.14 in fiscal 2016.
• The Company repurchased 1.9 million shares of its own common stock at an average cost of $53.85 per share in fiscal 2017.

These shares were repurchased under both the previous $100 million stock repurchase program which was completed in the third quarter of fiscal 2017 and the $200 million stock repurchase program which commenced in November 2017.

The Company ended fiscal 2017 with $990.5 million in cash and cash equivalents compared to $734.8 million at the end of fiscal 2016.

Inventories at the end of fiscal 2017 increased by 10% to $329.6 million compared to $298.4 million at the end of fiscal 2016. The Company ended the year with 404 stores.

Glenn Murphy, Executive Chairman of the Board, commented: “We are pleased with our results for the fourth quarter and fiscal year 2017.

The company continues to execute successfully on its global growth strategies and I would like to thank our entire team including Celeste, Stuart, and Sun for their leadership in driving this strong performance.”

Stuart Haselden, Chief Operating Officer, also noted: “We are seeing strong momentum across our business as we now move into 2018, which is further positioning us to achieve our 2020 revenue goal of $4 billion. Importantly, we would like to thank our store educators, ambassadors, and the lululemon collective around the world for their energy and passion that is enabling our continued success.”

For the first quarter of fiscal 2018, we expect net revenue to be in the range of $612 million to $617 million based on a total comparable sales increase in the low double digits on a constant dollar basis. Diluted earnings per share are expected to be in
the range of $0.44 to $0.46 for the quarter. This guidance assumes 136.3 million diluted weighted-average shares outstanding and a 29.0% tax rate.

The guidance does not reflect potential future repurchases of the Company’s shares or any further adjustments which may be recognized in connection with the U.S tax reform.

SEE ALSO : Lululemon leader in experiential marketing

For the full fiscal 2018, we expect net revenue to be in the range of $2.985 billion to $3.022 billion based on a total comparable sales increase in the mid-to-high single digits on a constant dollar basis. Diluted earnings per share are expected to be in the range of $3.00 to $3.08 for the full year. This guidance assumes 136.3 million diluted weighted-average shares outstanding and a 29.0% tax rate.

The guidance does not reflect potential future repurchases of the Company’s shares or any further adjustments which may be recognized in connection with the U.S tax reform. Fiscal 2018 is a 53 week year.

 

Follow Retail in Asia on Facebook, Twitter and LinkedIn.

Get our top stories delivered to your inbox:

 

Stay ahead
Subscribe for free!
Register now
Stay ahead