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Lululemon Athletica FY15 revenues increase 15 percent, updates outlook

By Prachi Singh

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Business |REPORT

Lululemon Athletica net revenue for the fourth quarter ended January 31, 2016 increased 17 percent to 704.3 million dollars from 602.5 million dollars in the same quarter, last year. Net revenue for the fiscal year increased 15 percent to 2.1 billion dollars from 1.8 billion dollars in fiscal 2014.

"I'm very pleased with our strong finish to the year with positive momentum across all channels. Our Q4 results are a reflection of our ability to deliver a truly unique experience to our guests, led, as always, by our outstanding store educators,” said Laurent Potdevin, Lululemon's CEO, adding, “In 2015, we made bold moves across the organization, elevating design and innovation and developing our infrastructure to position us for the future. As I look forward to 2016 and beyond, I am excited and confident that we have the right team in place to execute on our long term strategies.”

Reports buoyant Q4 and annual results

Total comparable sales, which includes comparable store sales and direct to consumer increased by 11 percent for the fourth quarter on a constant dollar basis. Comparable store sales increased by 5 percent on a constant dollar basis and direct to consumer net revenue increased 33 percent. Direct to consumer net revenue increased 28 percent to 146.3 million dollars, or 20.8 percent of total company net revenue, an increase from 19 percent of total company net revenue.

Total comparable sales increased by 10 percent for fiscal 2015 on a constant dollar basis. Comparable store sales increased 4 percent on a constant dollar basis and direct to consumer net revenue increased 30 percent on a constant dollar basis. Direct to consumer net revenue increased 25 percent to 401.5 million dollars, or 19.5 percent of total company net revenue, an increase from 17.9 percent of total company net revenue in fiscal 2014.

Gross profit for the quarter increased by 14 percent to 354.5 million dollars, and as a percentage of net revenue gross profit was 50.3 percent compared to 51.5 percent in the fourth quarter of fiscal 2014. Income from operations increased by 6 percent and diluted earnings per share were 0.85 dollar compared to 0.78 dollar in the fourth quarter of fiscal 2014.

Gross profit for fiscal 2015 increased by 9 percent to 997.2 million dollars, from 914.2 million dollars in fiscal 2014, and as a percentage of net revenue was 48.4 percent compared to 50.9 percent in fiscal 2014. Income from operations decreased by 2 percent but diluted earnings per share were 1.89 dollars compared to 1.66 dollars in fiscal 2014. Excluding tax and related interest adjustments, diluted earnings per share were 1.86 dollars compared to 1.89 dollars in fiscal 2014. The company ended the year with 363 stores.

The company updates 2016 outlook

For the first quarter of fiscal 2016, Lululemon expects net revenue to be in the range of 483 million dollars to 488 million dollars based on a total comparable sales increase in the mid-single digits on a constant dollar basis. Diluted earnings per share are expected to be in the range of 0.28 dollar to 0.30 dollar for the quarter.

For the full fiscal 2016, the company expects net revenue to be in the range of 2.285 billion dollars to 2.335 billion dollars based on a total comparable sales increase in the mid-single digits on a constant dollar basis. Diluted earnings per share are expected to be in the range of 2.05 dollars to 2.15 dollars for the full year.

Lululemon Athletica