Canadian activewear brand Lululemon Athletica has reported a 36.4% jump in fourth-quarter profit as sales grew 20% on last year.
For the three months ended 2 February, net income grew to CAD298m from CAD218.5m a year earlier. Gross margin was 58%, an increase of 70 basis points compared to the fourth quarter of fiscal 2018.
Net revenue jumped 20% to CAD1.4bn, while total comparable sales were also up by 20%, and comparable-store sales rose by 9%. Direct to consumer net revenue surged 41%.
The figures surpass guidance provided by Lululemon in January, which expected fourth-quarter net revenue to range between CAD1.37bn-CAD1.38bn.
For the full year, net income climbed 33% to CAD645.6m, from CAD483.8m the year before. Gross margin was up 70 basis points to 55.9%.
Net revenue grew 21% to CAD4bn. On a constant dollar basis, net revenue increased 22%. Total comparable sales, meanwhile, were up 17% or 18% on a constant dollar basis. Comparable store sales increased 9%, or 10% on a constant dollar basis, while direct to consumer net revenue as up 35%.
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By GlobalDataThe retailer is working to deliver its ‘Power of Three’ five-year vision, which aims to drive product innovation, create integrated omnichannel experiences, and expand deeper in key markets around the world – ultimately boosting revenue and earnings growth. Specifically, the growth strategy includes a plan to double men’s and digital revenues and to quadruple international revenues.
The company did not provide guidance for fiscal 2020, citing the “rapid and continuous developments” of the Covid-19 pandemic.
“We are now navigating an extraordinary environment, which is currently impacting our business. The strength of our brand and strong financial position will help us manage through the day-to-day, while continuing to effectively plan for and invest in our future,” said CEO Calvin McDonald.
All but one of Lululemon’s retail locations in Mainland China have now reopened since they were temporarily closed last month following the outbreak. Earlier this month, the retailer temporarily closed all its stores in North America, Europe, Malaysia, New Zealand, along with its distribution centre in Sumner, Washington. These locations currently remain closed.
B Riley analyst, Susan Anderson, notes: “Management indicated that based on their learnings from China, they believe their business will bounce back. Overall, management is confident that the outbreak of Covid-19 will fundamentally change their consumer spending habits.”
