lululemon witnesses a consistent sales growth

21 Mar '11

4 min read

lululemon athletica inc announced financial results for the fourth quarter and fiscal year ended January 30, 2011.

Christine Day, lululemon's CEO, stated: “We ended one of the best years in lululemon's history with strong Q4 results that extended the consistent sales growth and margin expansion that we enjoyed for each quarter of 2010. The exceptionally strong sell through of our Q4 product line leaves us with short term unmet demand in the first quarter due to a low inventory position.

“However, the strength of our business model and growing guest demand for our product give us the opportunity to accelerate our store and e-commerce channel growth in 2011 and to establish ourselves as the number one women's athletic wear brand. While we will see some cost pressures in 2011, we are confident in our ability to maintain our business model through disciplined management, operating efficiencies and leverage on higher sales.”

For the fourth quarter ended January 30, 2011:

• Net revenue for the quarter increased 53% to $245.4 million from $160.6 million in the fourth quarter of fiscal 2009.
• Comparable stores sales for the fourth quarter increased by 28% on a constant dollar basis.
• Direct to consumer revenue increased 152% to $24.6 million, or 10% of total Company sales, in the fourth quarter of fiscal 2010, from 6% of total revenue in the same period last year.
• Gross profit for the quarter increased by 66% to $143.5 million, and as a percentage of net revenue gross profit increased to 58.5% for the quarter from 53.9% in the fourth quarter of fiscal 2009.
• Income from operations for the quarter increased by 72% to $71.3 million, and as a percentage of net revenue was 29.1% compared to 25.8% of net revenue in the fourth quarter of fiscal 2009.
• The tax rate for the quarter was 23.5% compared to 31.4% a year ago, after an adjustment of $8.9 million reversing deferred tax liabilities recorded in Q1 through Q3 of fiscal 2010. This adjustment resulted from a revision to managements plans for repatriation of unremitted earnings of the Canadian operating subsidiary. Normalized for this adjustment, the tax rate for the quarter was 35.9%.
• Diluted earnings per share for the quarter were $0.76 on net income of $54.8 million, compared to diluted earnings per share of $0.40 on net income of $28.5 million in the fourth quarter of fiscal 2009. Normalized for the tax adjustment, diluted earnings per share for the quarter were $0.64.

For the fiscal year ended January 30, 2011:

• Net revenue for the fiscal year increased 57% to $711.7 million from $452.9 million in fiscal 2009.
• Comparable stores sales for fiscal 2010 increased by 30% on a constant dollar basis, resulting in a record $1,726 sales per square foot as at January 30, 2011.
• Direct to consumer revenue increased 214% to $57.3 million, or 8% of total Company sales, in fiscal 2010, from 4% of total revenue in fiscal 2009.

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