lululemon athletica inc. (NASDAQ:LULU) (TSX:LLL) today announced
financial results for the second quarter ended July 29, 2012.
For the thirteen weeks ended July 29, 2012:
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Net revenue for the quarter increased 33% to $282.6 million from
$212.3 million in the second quarter of fiscal 2011.
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Comparable stores sales for the second quarter increased by 15% on a
constant dollar basis.
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Direct to consumer revenue increased 91% to $35.4 million, or 12.5% of
total company revenues, in the second quarter of fiscal 2012, an
increase from 8.8% of total company revenues in the second quarter of
fiscal 2011.
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Gross profit for the quarter increased 28% to $155.8 million, and as a
percentage of net revenue gross profit was 55.1% for the quarter as
compared to 57.5% in the second quarter of fiscal 2011.
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Income from operations for the quarter increased 18% to $70.2 million,
and as a percentage of net revenue was 24.8% as compared to 28.0% of
net revenue in the second quarter of fiscal 2011.
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The effective tax rate for the second quarter of fiscal 2012 was 19.1%
after an adjustment of $7.2 million, reversing taxes provided for in
Q4 of fiscal 2011 through Q1 of fiscal 2012. This adjustment resulted
from the finalization of management's review of the tax impact of
intercompany pricing agreements entered into in Q4 of fiscal 2011.
Normalized for this adjustment, the tax rate for the second quarter of
fiscal 2012 was 29.2% compared to 35.7% in the second quarter of
fiscal 2011. The tax rate in the second quarter of fiscal 2012
reflects the ongoing impact of the revised intercompany pricing
agreements.
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Diluted earnings per share for the quarter were $0.39 on net income of
$57.2 million, compared to diluted earnings per share of $0.26 on net
income of $38.4 million in the second quarter of fiscal 2011. Second
quarter diluted earnings per share normalized for the tax adjustment
were $0.34 and would have been $0.31 at our previously estimated
effective tax rate of 36.5%.
For the twenty-six weeks ended July 29, 2012:
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Net revenue for the first two quarters of fiscal 2012 increased 42% to
$568.3 million from $399.1 million in the same period of fiscal 2011.
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Comparable stores sales for the first two quarters of fiscal 2012
increased by 20% on a constant dollar basis.
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Direct to consumer revenue increased 128% to $73.9 million, or 13.0%
of total company revenues, in the first two quarters of fiscal 2012,
an increase from 8.1% of total company revenues in the first two
quarters of fiscal 2011.
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Gross profit for the first two quarters of fiscal 2012 increased 35%
to $313.0 million, and as a percentage of net revenue gross profit was
55.1% for the first two quarters as compared to 58.1% in the same
period of fiscal 2011.
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Income from operations for the first two quarters increased 29% to
$143.3 million, and as a percentage of net revenue was 25.2% as
compared to 27.9% of net revenue in the same period of fiscal 2011.
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The effective tax rate for the first two quarters was 28.0% after an
adjustment of $2.0 million, reversing taxes provided for in Q4 of
fiscal 2011. This resulted from the finalization of management's
review of the tax impact of intercompany pricing agreements entered
into in Q4 of fiscal 2011. Normalized for this adjustment, the tax
rate for the first two quarters of fiscal 2012 was 29.3% compared to
36.0% in the first two quarters of fiscal 2011. The tax rate for the
first two quarters of fiscal 2012 reflects the ongoing impact of the
revised intercompany pricing agreements.
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Diluted earnings per share for the first two quarters of fiscal 2012
were $0.71 on net income of $103.9 million, compared to diluted
earnings per share of $0.49 on net income of $71.8 million in the same
period of fiscal 2011. First two quarters diluted earnings per share
normalized for the tax adjustment were $0.70 and would have been $0.63
at our previously estimated effective tax rate of 36.5%.
The company ended the second quarter of fiscal 2012 with $444.3 million
in cash and cash equivalents compared to $264.7 million at the end of
the second quarter of fiscal 2011. Inventory at the end of the second
quarter of fiscal 2012 totaled $125.4 million compared to $88.9 million
at the end of the second quarter of fiscal 2011. The company ended the
quarter with 189 stores in North America and Australia.
Christine Day, lululemon's CEO stated: "We continue to strive for the
right balance between strong growth and maintaining our market leader
focus on execution, innovation and investments in infrastructure and
while doing so delivered another strong quarter."
Updated Outlook
For the third quarter of fiscal 2012, we expect net revenue to be in the
range of $300 million to $305 million based on a comparable-store sales
percentage increase in the low to mid teens on a constant-dollar basis.
Diluted earnings per share are expected to be in the range of $0.34 to
$0.36 for the quarter. This assumes 145.8 million diluted
weighted-average shares outstanding and a 29.5% tax rate.
For the full fiscal 2012, we now expect net revenue to be in the range
of $1.345 billion to $1.360 billion and diluted earnings per share are
expected to be in the range of $1.76 to $1.81 for the full year. This
assumes 145.8 million diluted weighted-average shares outstanding and a
tax rate of 28.9%, which includes the effects of the $2.0 million
adjustment to reverse taxes provided for in Q4 of fiscal 2011.