On June 5, 2024, Lululemon Athletica Inc (LULU, Financial) released its 8-K filing announcing its financial results for the first quarter of fiscal 2024, which ended on April 28, 2024. The company, known for designing, distributing, and marketing athletic apparel, footwear, and accessories, reported impressive growth in both revenue and earnings per share (EPS), surpassing analyst estimates.
Company Overview
Lululemon Athletica Inc designs, distributes, and markets athletic apparel, footwear, and accessories for women, men, and girls. The company offers a range of products including pants, shorts, tops, and jackets for leisure and athletic activities such as yoga and running. Additionally, Lululemon sells fitness accessories like bags, yoga mats, and equipment through more than 700 company-owned stores in about 20 countries, e-commerce, outlets, and wholesale accounts. Founded in 1998, the company is based in Vancouver, Canada.
Q1 Fiscal 2024 Performance Highlights
For the first quarter of fiscal 2024, Lululemon reported:
- Net revenue increased by 10% to $2.2 billion, surpassing the estimated $2.194 billion.
- Comparable sales increased by 6%, or 7% on a constant dollar basis.
- Diluted EPS of $2.54, exceeding the estimated $2.27.
Financial Achievements and Metrics
Lululemon's financial achievements for Q1 fiscal 2024 include:
- Gross profit increased by 11% to $1.3 billion, with a gross margin of 57.7%.
- Income from operations rose by 8% to $432.6 million, although the operating margin decreased by 50 basis points to 19.6%.
- The effective income tax rate was 29.5%, compared to 29.1% in Q1 fiscal 2023.
- The company ended the quarter with 711 company-operated stores.
Balance Sheet and Cash Flow
Key balance sheet and cash flow metrics include:
- Cash and cash equivalents stood at $1.9 billion.
- Inventories decreased by 15% to $1.3 billion.
- Net cash provided by operating activities was $127.5 million.
- Net cash used in investing activities was $131.5 million.
- Net cash used in financing activities was $328.6 million.
Stock Repurchase Program
During Q1 fiscal 2024, Lululemon repurchased 0.8 million shares of its common stock for $296.9 million. On May 29, 2024, the board of directors approved a $1.0 billion increase to the company's stock repurchase program, bringing the total remaining authorization to approximately $1.7 billion as of June 5, 2024.
Management Commentary
"In the first quarter, we saw strong momentum in our international markets, demonstrating how our brand continues to resonate around the world. Guests responded well to our product innovations across categories, and we are pleased by the progress we are making to optimize our U.S. product assortment," said Calvin McDonald, Chief Executive Officer.
"We reported first quarter results ahead of our expectations as we operated with agility and continued to make strategic investments in the business. As we look to the rest of the year, we remain focused on leveraging our strengths and differentiated model to advance our Power of Three ×2 strategy and fuel performance," added Meghan Frank, Chief Financial Officer.
Outlook for Fiscal 2024
For the second quarter of fiscal 2024, Lululemon expects net revenue to be in the range of $2.400 billion to $2.420 billion, representing growth of 9% to 10%. Diluted EPS is expected to be between $2.92 and $2.97. For the full fiscal year 2024, the company anticipates net revenue between $10.700 billion and $10.800 billion, with diluted EPS ranging from $14.27 to $14.47.
For more detailed financial information, visit the 8-K filing.
Explore the complete 8-K earnings release (here) from Lululemon Athletica Inc for further details.
