Lululemon Athletica Continues to Outperform as Store Traffic Returns
The retailer remains on course to open between 45 and 50 new stores this year as the digital business also continues to grow.
Lululemon Courtesy Photo Lululemon Athletica Inc. continues to outperform as shoppers head back to stores. The Vancouver, British Columbia-based athletic apparel and accessories firm revealed first-quarter earnings Thursday evening, improving on both top and bottom lines thanks to strength across all channels. Company shares, which closed down 1.07 percent to $317.36 a piece, were up nearly 1 percent in after-hours trading as a result. “Our first-quarter results reflected strength across all drivers of growth, fueled by the continued expansion in our e-commerce business and a rebound in brick-and-mortar stores,” Calvin McDonald, the firm’s chief executive officer, said in a statement. “Our strong performance across categories, channels and geographies demonstrates the momentum and strength of Lululemon as we shift into the new normal. All of us on the leadership team are grateful to our teams around the world who enabled these results and who continue to focus on realizing growth.” For the three-month period ending May 2, total company revenues were more than $1.2 billion, compared with nearly $652 million during 2020’s first quarter, or $782 million in 2019’s pre-pandemic first quarter. McDonald pointed out to analysts on Thursday evening’s conference call the surge in store productivity — up 88 percent compared with 2019 levels. But growth was across all channels. Net revenue at company-operated stores surged 106 percent, compared with 2020’s first quarter, while direct-to-consumer net revenue rose 55 percent. In North America, net revenues increased 82 percent, up 125 percent internationally. Lululemon made nearly $145 million during the quarter as a result, up from nearly $29 million a year ago, or about $97 million in 2019. “We are very pleased with our [first-quarter] results, which reflect significant growth in the business compared to both 2020 and 2019,” Meghan Frank, Lululemon’s chief financial officer, said. “Our momentum remains strong as we enter the second quarter and we are raising our estimates for the year accordingly. The strength of our financial position allows us to continue to deliver against the Power of Three growth strategies, while we leverage both near- and long-term opportunities.” The company now expects second-quarter revenues to be between $1.3 billion and $1.33 billion, with adjusted diluted earnings per share to be in the range of $1.10 to $1.15 a piece. For the full 2021 fiscal year, the company expects revenues to be between $5.8 billion and $5.9 billion, with adjusted diluted EPS to be in the range of $6.73 to $6.86 each. The retailer ended the quarter with $1.17 billion in cash and cash equivalents and 523 stores, 93 percent of which were open at the end of the quarter. “We are committed to stores and building more and more stores this year,” McDonald said on the conference call. The retailer said it planned to open between 45 and 55 new stores in fiscal-year 2021, taking advantage of reduced occupancy rates. “We will continue to be opportunistic in grabbing [new] locations as they become available,” McDonald said. The retailer also launched Like New, a resale program in April, of which McDonald said the early results are encouraging.