lululemon athletica inc. announces third quarter fiscal 2012 results

December 6, 2012

VANCOUVER, British Columbia--(BUSINESS WIRE)-- lululemon athletica inc. (NASDAQ:LULU) (TSX:LLL) today announced financial results for the third quarter ended October 28, 2012.

For the thirteen weeks ended October 28, 2012:
• Net revenue for the quarter increased 37% to $316.5 million from $230.2 million in the third quarter of fiscal 2011.
• Comparable stores sales for the third quarter increased by 18% on a constant dollar basis.
• Direct to consumer revenue increased 89% to $45.1 million, or 14.3% of total Company revenues, in the third quarter of fiscal 2012, an increase from 10.4% of total Company revenues in the third quarter of fiscal 2011.
• Gross profit for the quarter increased 36% to $175.3 million, and as a percentage of net revenue gross profit decreased to 55.4% for the quarter from 55.8% in the third quarter of fiscal 2011.
• Income from operations for the quarter increased 35% to $80.6 million, and as a percentage of net revenue was 25.5% compared to 25.9% of net revenue in the third quarter of fiscal 2011.
• The tax rate for the quarter was 30.1% compared to 35.5% a year ago. The lower effective rate reflects the ongoing impact of revised intercompany pricing agreements.
• Diluted earnings per share for the quarter were $0.39 on net income of $57.3 million, compared to diluted earnings per share of $0.27 on net income of $38.8 million in the third quarter of fiscal 2011.

For the thirty-nine weeks ended October 28, 2012:
• Net revenue for the first three quarters increased 41% to $884.9 million from $629.3 million in the same period of fiscal 2011.
• Comparable stores sales for the first three quarters increased by 19% on a constant dollar basis.
• Direct to consumer revenue increased 112% to $119.0 million, or 13.4% of total Company revenues, in the first three quarters of fiscal 2012, an increase from 8.9% of total Company revenues in the first three quarters of fiscal 2011.
• Gross profit for the first three quarters increased 36% to $488.3 million, and as a percentage of net revenue gross profit decreased to 55.2% for the first three quarters from 57.3% in the same period of fiscal 2011.
• Income from operations for the first three quarters increased 31% to $223.9 million, and as a percentage of net revenue was 25.3% compared to 27.2% of net revenue in the same period of fiscal 2011.
• The tax rate for the first three quarters was 28.7% compared to 35.8% a year ago. The lower effective rate reflects the ongoing impact of revised intercompany pricing agreements.
• Diluted earnings per share for the first three quarters were $1.11 on net income of $161.2 million, compared to diluted earnings per share of $0.76 on net income of $110.5 million in the same period of fiscal 2011.

The Company ended the third quarter of fiscal 2012 with $439.4 million in cash and cash equivalents compared to $276.9 million at the end of the third quarter of fiscal 2011. Inventory at the end of the third quarter of fiscal 2012 totaled $164.7 million compared to $129.2 million at the end of the third quarter of fiscal 2011. The Company ended the quarter with 201 stores in North America and Australia.

Christine Day, lululemon's CEO stated: "I am very proud of the team for achieving yet another strong quarter coming in ahead of our expectations. Our stellar results were driven by first-rate execution, strong community engagement, beautiful product and continued strength in our ecommerce business."

Updated Outlook

 For the fourth quarter of fiscal 2012, we expect net revenue to be in the range of $475 million to $480 million based on a comparable-store sales percentage increase in the high single digits on a constant-dollar basis. Diluted earnings per share are expected to be in the range of $0.71 to $0.73 for the quarter. This assumes 145.9 million diluted weighted-average shares outstanding and a 29.4% tax rate.

For the full fiscal 2012, we now expect net revenue to be in the range of $1.360 billion to $1.365 billion and diluted earnings per share are expected to be in the range of $1.81 to $1.83 for the full year. This assumes 145.8 million diluted weighted-average shares outstanding and a tax rate of 29.0%.

Conference Call Information

 A conference call to discuss third quarter results is scheduled for today, December 6, 2012, at 9:00 a.m. EST

http://investor.lululemon.com/releasedetail.cfm?ReleaseID=725289

 

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