- Lululemon reported strong fiscal first-quarter results, surpassing Wall Street’s estimates. Earnings per share were $2.28, beating the expected $1.98, and revenue reached $2 billion, exceeding the expected $1.93 billion. A meaningful acceleration in sales in China, coupled with lower air freight, contributed to better than planned financial performance
- Net income for the quarter was $290.4 million, compared to $190 million the previous year.
- Lululemon sales rose by 24% to $2 billion, with China revenue growing by an impressive 79%. Women’s sales were up by 22%, men’s sales up by 17%, and accessories sales up by 67%.
- Gross margins improved to 57.5%, surpassing analysts’ expectations of 56.7%. Inventory was up 24% at $1.58 billion, with plans for a 20% increase in the next quarter.
The company is considering selling its at-home fitness business, Mirror, after taking $443 million in impairment charges. Lululemon has launched a new digital app, Lululemon Studio, offering fitness classes without the need for hardware. - For the second quarter, sales are projected to be $2.14 billion to $2.17 billion, representing 15% growth. The company raised its full-year guidance, expecting revenue of $9.44 billion to $9.51 billion, up from a previous range of $9.31 billion and $9.41 billion, and beating Wall Street’s projections of $9.37 billion. Full-year profit is forecast to be in a range between $11.74 to $11.94 per share. That’s up from a prior range of $11.50 to $11.72, also topped analysts’ expectations of $11.61 per share.
- Lululemon hopes to open 50 new stores, primarily in international markets, particularly China where growth expanded significantly in the most recent quarter. Despite the cautious approach to discretionary spending in the retail industry, Lululemon reported no changes in its customers’ shopping habits and strong guest metrics. We do not own shares of Lululemon but instead own shares of Nike in the athletics apparel segment.
By Lee Kern
Join our Mailing list!
Sign up to get all the latest financial news and business updates.
Sign up to get all the latest financial news and business updates.