Lululemon announced Thursday fiscal fourth-quarter results that topped expectations, as its same-store sales surged 20% during the period, thanks, in part, to more men shopping in its stores and online.
However, due to the uncertainty from the coronavirus pandemic, the yoga pants maker said it will not be providing a fiscal 2020 outlook at this time. Its stock fell about 2% in after-hours trading.
Here’s how the company did during the fourth quarter compared with what analysts were expecting, based on Refinitiv data:
- Earnings per share: $2.28 vs. $2.24 expected
- Revenue: $1.40 billion vs. $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. That was better than the $2.24 per share analysts were expecting it to earn, based on Refinitiv data.
Net revenue grew roughly 20% to $1.40 billion from $1.17 billion a year ago. Analysts were calling for $1.38 billion in revenue.
Same-store sales overall were up 20%, the company said. Digital sales surged 41% during the quarter. Men’s revenue was up 32%, and women’s was up 17%.
“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 said in a statement.
In February, because of the heightened spread of COVID-19, Lululemon closed all of its stores temporarily in mainland China. 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 has temporarily closed a distribution center in Sumner, Washington.
Based on learnings from China, McDonald told analysts Thursday that he has confidence the business “will bounce back.” He said sales in China are not yet back to their levels prior to stores in the region closing. But volume is improving “week by week,” he said.
Lululemon stores in the U.S., Canada and other markets will be reopening on a “market by market basis,” the CEO said, based on local information. “Our stores will reopen. … Lululemon is in a very healthy position.” But he cautioned that the company is planning for stores in North America to be closed for longer than they were in China.
Lululemon, meantime, has confidence that even if shoppers are not looking to buy leggings and sports bras today, the retailer does not have to worry about putting items on sale, in the future, to move them off shelves.
Much of Lululemon’s merchandise is “less seasonal in nature,” compared with other apparel categories, McDonald explained. “Styles can be held for future use.”
“We do not believe [the coronavirus] will change the trend toward people wanting to live active and healthy lifestyles,” he added.
In managing expenses, Lululemon said it will be scaling back on store openings and remodels in the near term.
Lululemon shares closed Thursday up about 3.7%. The stock is down about 15% this year. The company has a market cap of about $26.2 billion.