- Comparable sales increase 20 %
- Diluted EPS of CAD 2.28 for the fourth quarter
- Full year revenue of CAD 4.0 billion
ululemon athletica inc. (NASDAQ:LULU) today announced financial results for the fourth quarter and fiscal year ended February 2, 2020.
The summary below provides both GAAP and adjusted non-GAAP financial measures. The adjusted financial measures exclude the amounts recognized in connection with U.S. tax reform and taxes on the repatriation of foreign earnings during fiscal 2018.
For the fiscal year ended February 2, 2020:
- Net revenue was CAD 4.0 billion, an increase of 21% compared to fiscal 2018. On a constant dollar basis, net revenue increased 22%.
- Total comparable sales increased 17%, or increased 18% on a constant dollar basis.
- Comparable store sales increased 9%, or increased 10% on a constant dollar basis.
- Direct to consumer net revenue increased 35%.
- Gross profit was CAD 2.2 billion, an increase of 22% compared to fiscal 2018.
- Gross margin was 55.9%, an increase of 70 basis points compared to fiscal 2018.
- Income from operations was CAD 889.1 million, an increase of 26% compared to fiscal 2018.
- Operating margin was 22.3%, an increase of 80 basis points compared to fiscal 2018.
- Income tax expense was CAD 251.8 million compared to CAD 231.4 million in fiscal 2018 and the effective tax rate was 28.1% compared to 32.4% for fiscal 2018. The adjusted effective tax rate for fiscal 2018 was 28.0%.
- Diluted earnings per share were CAD 4.93 compared to CAD 3.61 in fiscal 2018. Adjusted diluted earnings per share in fiscal 2018 were CAD 3.84.
- The Company repurchased 1.1 million shares of its own common stock at an average cost of CAD 164.26 per share in fiscal 2019.
The Company ended fiscal 2019 with CAD 1.1 billion in cash and cash equivalents compared to CAD 881.3 million at the end of fiscal 2018. Inventories at the end of fiscal 2019 increased by 28% to CAD 518.5 million compared to CAD 404.8 million at the end of fiscal 2018. The Company ended the year with 491 stores.
Calvin McDonald, Chief Executive Officer, commented: “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.” McDonald continued: “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.”
The outbreak of the COVID-19 coronavirus has been declared a pandemic by the World Health Organization and continues to spread in the United States, Canada, and in many other countries globally. Subsequent to February 2, 2020, in line with recommendations by public health officials and in accordance with governmental authority orders, we have taken actions to close certain retail locations and to reduce operating hours. We continue to monitor the situation and work closely with local authorities to prioritize the safety of our people and guests.
In February 2020, we temporarily closed all of our retail locations in Mainland China. All but one of these locations have since reopened. In March 2020, we temporarily closed all of our retail locations in North America, Europe, Malaysia, New Zealand, and we temporarily closed our distribution center in Sumner, WA. These locations currently remain closed.
Fiscal 2020 Outlook
Due to the impact that COVID-19 is having across the globe, and the rapid and continuous developments, we are not providing guidance for fiscal 2020 at this time. We will provide additional updates as the situation warrants.
Shifted Calendar for Comparable Sales
Due to the 53rd week in fiscal 2018, comparable sales are calculated on a one week shifted basis in fiscal 2019. Changes in total comparable sales, comparable store sales, and direct to consumer net revenue are calculated on a one week shifted basis such that the 13 and 52 weeks ended February 2, 2020 are compared to the 13 and 52 weeks ended February 3, 2019 rather than January 27, 2019.
lululemon athletica inc. (NASDAQ:LULU) is a healthy lifestyle inspired athletic apparel company for yoga, running, training, and most other sweaty pursuits, creating transformational products and experiences which enable people to live a life they love. Setting the bar in technical fabrics and functional designs, lululemon works with yogis and athletes in local communities for continuous research and product feedback.