lululemon athletica inc. [NASDAQ:LULU; TSX:LLL] today announced financial results for the second quarter ended August 1, 2010.
For the thirteen weeks ended August 1, 2010:
- Net revenue for the quarter increased 55.8% to $152.2 million from $97.7 million in the second quarter of fiscal 2009. Net revenue from corporate-owned stores was $129.4 million for the quarter, an increase of 52.1% from $85.1 million in the second quarter of fiscal 2009, and comparable-store sales increased by 31% on a constant-dollar basis.
- Gross profit for the quarter increased by 77.8% to $80.3 million, and as a percentage of net revenue gross profit increased to 52.8% for the quarter from 46.2% in the second quarter of fiscal 2009.
- Income from operations for the quarter increased by 138.9% to $34.2 million, and as a percentage of net revenue was 22.5% compared to 14.7% of net revenue in the second quarter of fiscal 2009.
- Diluted earnings per share for the quarter was $0.30 on net income of $21.8 million, compared to diluted earnings per share of $0.13 on net income of $9.2 million in the second quarter of fiscal 2009.
- The tax rate for the quarter was 40.3% versus 35.6% a year ago. The tax rate has been increased to take into account the additional future income tax liability which could arise on repatriation of excess unremitted earnings of the Canadian operating subsidiary.
For the twenty-six weeks ended August 1, 2010:
- Net revenue for the first two quarters increased 61.9% to $290.5 million from $179.4 million in the same period of fiscal 2009. Net revenue from corporate-owned stores was $245.0 million for the first two quarters of fiscal 2010, an increase of 55.1% from $158.0 million in the first two quarters of fiscal 2009. Year to date comparable-store sales increased by 33% on a constant-dollar basis.
- Gross profit for the first two quarters increased by 92.9% to $154.7 million from $80.2 million in the same period of fiscal 2009. As a percentage of net revenue, gross profit increased to 53.2% for the first two quarters of fiscal 2010 from 44.7% in the same period of fiscal 2009.
- Income from operations for the first two quarters increased by 175.9% to $66.7 million, and as a percentage of net revenue was 23.0% compared to 13.5% of net revenue in the same period of fiscal 2009.
- Diluted earnings per share on a year to date basis was $0.58 on net income of $41.4 million, compared to diluted earnings per share of $0.22 on net income of $15.8 million in the same period of fiscal 2009.
- The tax rate for the first two quarters of fiscal 2010 was 40.1% versus 35.1% for the same period in the prior year. The tax rate has been increased to take into account the additional future income tax liability which could arise on repatriation of excess unremitted earnings of the Canadian operating subsidiary.
The Company ended the second quarter of fiscal 2010 with $178.2 million in cash and cash equivalents compared to $83.8 million at the end of the second quarter of fiscal 2009. Inventory at the end of the second quarter of fiscal 2010 totaled $66.5 million compared to $46.5 million at the end of the second quarter of fiscal 2009. The Company ended the quarter with 130 stores in North America and Australia.
Christine Day, lululemon's CEO stated: "Our strong sales momentum reflects increased brand awareness driven by the strength of our product innovation, guest experience and community engagement. We achieved $1,532 in sales per square foot for the second quarter driven by the exceptional performance of our newest stores. We are intently focused on our existing growth strategies which include fueling our rapidly growing e-commerce business and leveraging our showrooms into 20 to 25 store openings in 2011."
Updated Outlook
For the third quarter of fiscal 2010, we expect net revenue to be in the range of $155 million to $160 million based on a comparable-store sales percentage increase in the high-teens on a constant-dollar basis. Diluted earnings per share are expected to be in the range of $0.22 to $0.24 for the quarter. This assumes 72.5 million diluted weighted-average shares outstanding.
For the full fiscal 2010, we now expect net revenue to be in the range of $645 million to $650 million and diluted earnings per share are expected to be in the range of $1.18 to $1.22 for the full year. This assumes 72.3 million diluted weighted-average shares outstanding.
Consistent with the adjustment to the tax rate in the first quarter of fiscal 2010 the updated outlook assumes a tax rate of 40% for fiscal 2010.