Lululemon Athletica Soars On Upbeat Profit & Revenue


Lululemon Athletica reported better-than-expected fiscal 2018 fourth-quarter financial results after markets closed on Wednesday. The lifestyle and sportswear apparel company said that the results were boosted by increased demand for its yoga wear during the holiday season.

Lululemon Athletica also issued an upbeat Q1 2019 sales forecast, easing investor concerns about growth. In addition, the company said that it intends to buy back an additional $500 million from its investors, joining a list of many other companies that have executed share buyback programs this year.

Shares of the Lululemon Athletica gained $13.70, or 9.33% to $160.50 immediately after the earnings report. The stock, which ended the regular session at $146.80, has gained more than 20% year to date and more than 80% year over year.

LULU Earnings & Outlook

Lululemon Athletica earned $218 million, or $1.65 per share, in Q4 2018, up from $0.88 per share in Q4 2017. On an adjusted basis, the Vancouver-based company earned $1.85 per share, up from $1.33 per share in the prior-year period. Analysts on average were expecting fourth-quarter adjusted earnings of $1.74 per share, based on figures compiled by Refinitiv.

Sales jumped 26% on a year-over-year basis to $1.2 billion, surpassing Refinitiv consensus of $1.15 billion. Sales at stores open at least 12 months grew 16%, but 17% after adjusting for currency fluctuations, against estimates of 16%. For the full year, the retailer posted a profit of $483.8 million, or $3.61 per share on sales of $3.29 billion.

Looking ahead, Lululemon Athletica expects earnings of between $0.68 and $0.70 per share on sales of between $740 million to $750 million for the current quarter. Analysts expect the company to report earnings of $0.67 per share on sales of $743 million for the quarter.

Lululemon Athletica CEO Comments

Calvin McDonald, Chief Executive Officer, commented: “Lululemon has delivered one of its strongest years yet, a result of broad-based strength across the business. I’m thrilled that we achieved several of our 2020 goals ahead of schedule, and want to thank our teams for their passion, hard work and connection with our guests every day. We are energized to build upon our momentum and to seize the many opportunities ahead for Lululemon around the world.”

Lululemon Athletica Inc. Profile

Lululemon is an athleticwear manufacturer and retailer, with virtually all products sold under its namesake brand. Women’s apparel makes up most sales, but menswear and accessories are expanding segments.

Lululemon operates roughly 400 stores, with more than 300 in North America and the remaining in Australia, East Asia, and the United Kingdom. Company-operated stores and direct-to-consumer digital sales account for more than 90% of revenue; the rest comes through wholesale, outlets, and showrooms.