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Fibres/​Yarns/​Fabrics

lululemon athletica reports revenue increase in 1Q 2016

The net revenue increased to US$ 495.5 million from US$ 423.5 million in the first quarter of fiscal 2015.

9th June 2016

Innovation in Textiles
 |  Vancouver

Clothing/​Footwear, Sports/​Outdoor

The net revenue increased to US$ 495.5 million from US$ 423.5 million in the first quarter of fiscal 2015. Total comparable sales, which includes comparable store sales and direct to consumer, increased by 6%. Comparable store sales increased by 3% and the direct to consumer net revenue increased by 17% to US$ 97.6 million.

Gross profit increased by 16% to US$ 239.1 million, and as a percentage of net revenue gross profit was 48.3% compared to 48.6% in the first quarter of fiscal 2015.

Quarter performance

The company ended the first quarter of fiscal 2016 with US$ 550.0 million in cash and cash equivalents compared to US$ 655.9 million at the end of the first quarter of fiscal 2015. Inventories at the end of the first quarter of fiscal 2016 increased by 21% to US$ 286.2 million compared to US$ 236.5 million at the end of the first quarter of fiscal 2015. The Company ended the quarter with 373 stores.

"We are pleased with our first quarter performance, delivering strong sales results and gross margin that exceeded expectations. We finished the quarter with our inventory levels rebalanced and on track to achieve our goals for the year,” commented Laurent Potdevin, lululemon's CEO.

"I'm extremely proud of our teams who have relentlessly built the capabilities and infrastructure necessary to support profitable growth. By continuing to invest in our people and focus on product innovation, we are well on our way to deliver on our five-year plan."

Results

Income from operations decreased by 15% to US$ 57.6 million from US$ 68.0 million in the first quarter of fiscal 2015, and as a percentage of net revenue was 11.6% compared to 16.1% of net revenue in the first quarter of fiscal 2015.

Income tax expense was US$ 11.8 million, which included a net income tax recovery of US$ 5.6 million related to the company's transfer pricing arrangements and the associated plan to repatriate foreign earnings. The effective tax rate in the first quarter of fiscal 2016 was 20.6% compared to 30.3% in the first quarter of fiscal 2015. Excluding the above tax and related interest adjustments, the effective tax rate was 29.8% in the first quarter of fiscal 2016.

Diluted earnings per share for the first quarter of fiscal 2016 were US$ 0.33 compared to US$ 0.34 in the first quarter of fiscal 2015. Excluding the above tax and related interest adjustments, diluted earnings per share were US$ 0.30 for the first quarter of fiscal 2016.

Updated outlook

For the second quarter of fiscal 2016, the company expects net revenue to be in the range of US$ 505 million to US$ 515 million based on total comparable sales in the mid-single digits on a constant dollar basis.

For the full fiscal 2016, the company now expects net revenue to be in the range of US$ 2.305 billion to US$ 2.345 billion based on total comparable sales in the mid-single digits on a constant dollar basis.

Diluted earnings per share are expected to be in the range of US$ 2.08 to US$ 2.18 for the full year, or US$ 2.05 to US$ 2.15 normalized for the tax and related interest adjustments made during the first quarter of fiscal 2016.

www.lululemon.com

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