lululemon athletica inc. (NASDAQ:LULU) (TSX:LLL) today announced financial results for the first quarter ended May 1, 2011.
For the first quarter ended May 1, 2011:
- Net revenue for the quarter increased 35% to $186.8 million from $138.3 million in the first quarter of fiscal 2010.
- Comparable stores sales for the first quarter increased by 16% on a constant dollar basis.
- Direct to consumer revenue increased 51% to $13.8 million, or 7.4% of total Company sales, in the first quarter of fiscal 2011, an increase from 6.6% of total Company sales in the first quarter of fiscal 2010.
- Gross profit for the quarter increased by 48% to $109.7 million, and as a percentage of net revenue gross profit increased to 58.7% for the quarter from 53.8% in the first quarter of fiscal 2010. The increase included 140 basis points from the non-recurring adjustment for the recognition of input tax credits in the first quarter of fiscal 2011.
- Income from operations for the quarter increased by 59% to $51.7 million, and as a percentage of net revenue was 27.7% compared to 23.5% of net revenue in the first quarter of fiscal 2010.
- The tax rate for the quarter was 36.3% compared to 40.0% a year ago. The decrease resulted from a revision to management's plans for repatriation of unremitted earnings of the Canadian operating subsidiary.
- Diluted earnings per share for the quarter were $0.46 on net income of $33.4 million, compared to diluted earnings per share of $0.27 on net income of $19.6 million in the first quarter of fiscal 2010. The increase included $0.02 in diluted earnings per share from the non-recurring adjustment for the recognition of input tax credits in the first quarter of fiscal 2011.
The Company ended the first quarter of fiscal 2011 with $260.9 million in cash and cash equivalents compared to $173.6 million at the end of the first quarter of fiscal 2010. Inventory at the end of the first quarter of fiscal 2011 totaled $64.4 million compared to $50.8 million at the end of the first quarter of fiscal 2010. The Company ended the quarter with 142 stores in North America and Australia.
Christine Day, lululemon's CEO stated: "We've had a great start to the year and a very successful first quarter considering our lean inventory levels. We were able to generate strong sales and earnings growth while also focusing on a successful transition of our e-Commerce platform in-house. While cautious about the macro-environment, we remain confident that our business momentum will continue through fiscal 2011."
Updated Outlook
For the second quarter of fiscal 2011, we expect net revenue to be in the range of $200 million to $205 million based on a comparable-store sales percentage increase in the mid-to-upper teens on a constant-dollar basis. Diluted earnings per share are expected to be in the range of $0.42 to $0.44 for the quarter. This assumes 72.6 million diluted weighted-average shares outstanding and a 36% tax rate.
For the full fiscal 2011, we now expect net revenue to be in the range of $915 million to $930 million and diluted earnings per share are expected to be in the range of $2.10 to $2.16 for the full year. This assumes a tax rate of 36% and 72.8 million diluted weighted-average shares outstanding.