Athletic apparel company Lululemon Athletica, best known for it’s yoga gear reported better than expected fourth quarter earnings sending the stock to all time highs, up over 10%. $LULU business is high margin, accelerating and expanding in new lines, online sales and in China.
Athletic apparel company Lululemon Athletica, best known for it’s yoga gear reported better than expected fourth quarter earnings sending the stock to all time highs, up over 10%. $LULU business is high margin, accelerating and expanding in new lines, online sales and in China.
$LULU has successfully crafted out a niche for itself as a North American sports apparel brand in a very crowded marketplace, Nike remains the dominant player in the athletic apparel space with Adidas popular with teens and millennials.
Lululemon Athletica Inc NASDAQ: LULU · Reported Earnings After Close Wednesday
$1.85 Beat $1.74 EPS And $1.17 Billion Beat $1.15 Billion forecast in revenue.
Earnings
LULU reported fourth quarter earnings per share of $1.85 per share, vs. $1.74 per share expected and revenue of $1.17 billion vs. $1.15 billion. Strong sales during the holiday quarter helped the company reach its goal of exceeding $1 billion earlier than expected.
In the quarter ended Feb. 3, Lululemon said net income rose to $218.5 million, or $1.65 per share, from $119.8 million, or 88 cents per share. Same store sales rose 16 percen in line with estimates.
Lululemon Athletica Inc NASDAQ: LULU
Market Reaction – After Hours $165.22 +18.42 (+12.55%)
Highlights
- Lululemon’s operating margin was 21.5 percent, another goal it reached two years ahead of schedule.
- Sales at stores open at least 12 months rose 16 percent, in line with estimates.
- After adjusting for currency fluctuations, same-store sales were up 17 percent.
- Both measures exclude revenue from the last week of fiscal 2018.
- CEO McDonald said Lululemon’s expansion into men’s apparel is the retailer’s largest, most exciting segment for future growth, at just over 20 percent penetration today.
- Specifically, the men’s “bottoms” segment has been extremely profitable.
- “We really believe that Lululemon can be a duel gender brand and that our men’s business can ultimately be as big as our women’s,” said Haselden.
- Lululemon’s profitability in Asia and Australia more than offset the operating loss in Europe.
- Now with 21 stores in Europe, the retailer said it was about a year and half away from breaking even in Europe.
- Seasonal stores have also proved successful for the company. Chief Financial Officer Patrick Guido said they are a low-risk way to build the brand and gage the market
Outlook
In fiscal 2019, the company expects to report earnings of between $4.48 and $4.55 per share, ahead of analyst estimates of $4.40 per share. Lululemon expects revenue in the range of $3.70 billion to $3.74 billion, higher than the forecast of $3.27 billion.
For the first quarter, Lululemon expects to see revenue between $740 million and $750 million, in line with estimates of $743 million. The company sees earnings per share between 68 cents and 70 cents, slightly higher than the 67-cent expectation. The retailer also announced a $500 million stock repurchase program.
Source: Lululemon Athletica