- Lululemon Athletica released its financial results for the fourth quarter and fiscal year 2022, revealing strong results across the business driven by innovative products, guest experiences, and strategic market expansion.
- Net revenue in the fourth quarter increased by 30% to $2.8 billion, with North America and international sales increasing by 29% and 35%, respectively. Comparable sales increased by 27%, with direct-to-consumer net revenue representing 52% of total net revenue.
- Adjusted income from operations increased by 33% to $785.3 million, with an adjusted operating margin of 28.3%. However, gross margins decreased 300 basis points to 55.1%, and income from operations decreased by 47% to $314.4 million.
- Lululemon Athletica also recognized post-tax impairment and other charges related to MIRROR totaling $442.7 million during the quarter. MIRROR was an ill-fated purchase made during lockdowns for technology which allows one to partake in subscription workouts in front of, well, a mirror.
- Diluted earnings per share were $0.94 compared to $3.36 in the fourth quarter of 2021, with adjusted diluted earnings per share for the fourth quarter of 2022 being $4.40.
- For 2022, net revenue increased 30% to $8.1 billion, with total comparable sales increasing by 25%. Gross margin decreased 230 basis points to 55.4%, while adjusted income from operations increased by 30% to $1.8 billion. Adjusted diluted earnings per share were $10.07 in 2022, compared to $7.79 in 2021.
- The company repurchased 1.6 million shares of its own common stock at an average price of $317.89 per share for a cost of $443.6 million and opened 81 net new company-operated stores during the year.
- Overall, the company is optimistic about its ability to deliver sustained growth and long-term value. The company expects net revenue in the range of $1.89 billion to $1.93 billion, with growth of about 18%, and earnings per share of $1.93 to $2.00 for the first quarter of fiscal 2023. For fiscal 2023, net revenue is expected to be in the range of $9.3 billion to $9.41 billion, representing growth of approximately 15%, with earnings per share of $11.50 to $11.72 for the year. The guidance does not include potential future share repurchases. We instead own shares of Nike in the athletics-wear space.
By Lee Kern
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