Lululemon Reports Strong Sales but Withholds Outlook

High-end athletic apparel company Lululemon reported fourth quarter financial results this week revealing that it topped estimates with earnings on strong sales.

The company did not give an outlook however for 2020 citing the uncertainty around the COVID-19 pandemic.
Shares fell around 2% in after-hours trading on Thursday on the news.

For the fourth quarter, same-store sales surged 20% during the period, thanks, in part, to more men shopping in its stores and online. Digital sales also jumped 41% during the quarter. Men’s revenue was up 32%, and women’s was up 17%.
Earnings per share came in at $2.28 compared to the $2.24 that analysts had expected. Revenue at $1.4 billion was higher than the $1.38 billion expected.

Net income rose to $298 million, or $2.28 per share, from $218.5 million, or $1.65 a share, a year ago. This was also ahead of the $2.24 per share analysts were expecting, based on Refinitiv data.

Net revenue grew roughly 20% to $1.40 billion from $1.17 billion a year ago. Analysts were expecting $1.38 billion in revenue.

“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,” CEO Calvin McDonald stated.

Lululemon closed all of its stores temporarily in mainland China back in February due to the coronavirus outbreak. It said Thursday that all but one of these shops have since reopened.

Earlier this month, Lululemon temporarily closed all of its stores in North America, Europe, Malaysia and New Zealand due to the virus. It also temporarily closed a distribution center in Sumner, Washington.

Lululemon stores in the U.S., Canada and other markets will be reopening on a “market by market basis,” the CEO said.
“Our stores will reopen. … Lululemon is in a very healthy position.”

“We do not believe [the coronavirus] will change the trend toward people wanting to live active and healthy lifestyles,” he added.

Disclaimer: We have no position in Lululemon Athletica Inc. (NASDAQ: LULU) and have not been compensated for this article.