CANADA: Lululemon Athletica admits to "humility" on errors
- Q4 profit edge up 0.3% to CAD109.7m
- Revenue increase 7% to CAD521m
- Comparable store sales slip 2%
Higher sales offset lower comparable store sales and margins in the fourth quarter
Canadian yoga wear brand Lululemon Athletica saw its net profit for the fourth-quarter hold steady, with higher revenues offsetting lower comparable store sales and margins.
The company today (27 March) said net income reached CAD109.7m (US$98.9m) for the 13 weeks to 2 February, up 0.3% on CAD109.4m in the same period of last year.
Net revenue increased 7% to $521m from CAD485.5m in the prior year, while comparable store sales edged down 2%. Gross margin slipped to 53.5% on last year's 56.5%.
For the full year, net income edged up 3% to CAD279.5m against CAD271.4m, while net revenue reached CAD1.6bn, up 16% from CAD1.4bn in the year before.
"As we move into 2014, we are reflecting on our learnings with humility, and are entirely focused on our future," said CEO Laurent Potdevin.
"2014 is an investment year with an emphasis on strengthening our foundation, reigniting our product engine, and accelerating sustainable and controlled global expansion."
The company has been hurt by complaints about the quality of its products, and last year was forced to pull a line of black Luon trousers from its stores after the fabric was found to be see-through.
Lululemon now expects first-quarter earnings per share to be $0.31-0.33, while revenue is forecast to range from $377m to $382m based on flat comparable sales.
For fiscal 2014, it expects earnings per share to be between $1.80 and $1.90, while net revenue is forecast to range from $1.77bn to $1.82bn.
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