Lululemon on Tuesday reported revenue and profit for the fiscal fourth quarter that topped analysts’ estimates, boosted by the athletic apparel maker’s online business, and double-digit sales growth in both its women’s and men’s divisions., CNBC reports.
It offered an upbeat outlook for sales during the current quarter and for the year, anticipating consumer demand for its sweat-wicking leggings and sports bras will continue. The retailer has been a huge pandemic beneficiary, with many people stuck at home gravitating toward workout clothing as everyday wear.
The company’s shares dropped by more than 1 percent in after-hours trading, having risen by more than 60 percent over the past 12 months. Lululemon cautioned that a potential resurgence of coronavirus infections could hurt its business, despite its forecast for revenue growth.
Here’s how Lululemon did during the quarter ended January 31 compared with what analysts were expecting, based on a poll by Refinitiv:
Earnings per share: US$2.58 adjusted vs. US$2.49 expected
Revenue: US$1.73 billion vs. US$1.66 billion expected
Lululemon reported net income of US$329.8 million, or US$2.52 per share, compared with net income of US$298 million, or US$2.28 per share, a year earlier. Excluding one-time items, the company earned US$2.58 per share, better than the US$2.49 expected by analysts.
Its revenue grew roughly 24 percent to US$1.73 billion from US$1.4 billion a year earlier. That topped expectations for US$1.66 billion.
Its online sales surged by 92 percent, as many consumers preferred staying put at home and shopping from the comfort of the sofa during the coronavirus diseas pandemic. Women’s sales were up by 19 percent, and men’s grew by 17 percent during the quarter, the company said.
In North America, revenue grew by 21 percent, while international sales increased by 47 percent.
Direct-to-consumer sales nearly doubled, and represented 52 percent of total sales in the quarter, compared with 33 percent of sales during the year-ago period, it said.
“We are still in the early innings of our growth, fueled by exciting innovations,” CEO Calvin McDonald said in a statement.
Lululemon now expects first-quarter revenue to be in a range of US$1.10 billion to US$1.13 billion, compared with analysts’ average estimate of $999.5 million, according to Refinitiv.
For fiscal 2021, the company is calling for revenue to be in a range of US$5.55 billion to US$5.65 billion, compared with analysts’ average estimate of US$5.42 billion.
It cautioned, however, that further resurgences in the virus, including from variants, could cause additional restrictions that could suppress shopper demand as well as lead to supply chain disruption.
For now, the company said it remains on track to reach the targets it previously charted to hit by 2023, including doubling its men’s and online sales, and quadrupling international revenues.
Lululemon also now owns at-home fitness equipment maker Mirror, which offers another source of revenue growth beyond the pants, tops and workout accessories that it sells.
It said it plans to ramp up investments in the start-up, which generated US$170 million in revenue in 2020, including results from before Lululemon’s US$500 million acquisition.
Lululemon’s shares are down by about 8 percent year to date, as of Tuesday’s market close. The company has a market cap of US$41.3 billion.
Lululemon also launched the new Take Form Yoga Mat, designed with cutting-edge technology. It was created by lululemon’s accessories team in partnership with its Whitespace R&D Lab. The innovative design was informed by insights collected through extensive research exploring the challenges yogis of all levels experience around alignment, spatial perception and focus, and the cues they use to navigate their practice.
It features 3D zoned cushioning designed to improve sensory perception with visual and tactile alignment cues.
The 3D water droplet-inspired zones have been mapped out and tested to guide optimal body positioning across the poses yogis identified as the most difficult to master. The tidal flow-inspired texture and contoured edges offer grip and stability for enhanced performance and functionality. Leveraging lululemon’s proprietary mat construction technology, the Take Form Yoga Mat is built with natural, sustainably sourced FSC (Forest Stewardship Council) certified rubber material.
Lululemon's new Take Form Yoga Mat, features 3D zoned cushioning designed to improve sensory perception with visual and tactile alignment cues. The tidal flow-inspired texture and contoured edges offer grip and stability for enhanced performance and functionality.
