lululemon athletica inc. Announces Second Quarter Fiscal 2007 Results



    Second Quarter Net Revenue Increases 80% to $58.7 million

    Operating Income Increases 202% to $9.8 million

    VANCOUVER, CANADA, September 10 /CNW/ - lululemon athletica inc. (NASDAQ:  
LULU; TSX: LLL) today announced financial results for the three and six months
ended July 31, 2007.

    For the three months ended July 31, 2007:

    --  Net revenue increased 80% to $58.7 million compared to $32.5 million
for the second quarter of fiscal 2006. Net revenue from corporate-owned stores
increased 98% to $53.1 million compared to $26.8 million for the second
quarter of fiscal 2006, with comparable store sales growth of 30%.

    --  Gross profit as a percentage of net revenue increased 430 basis
points to approximately 53% of net revenue from 49% of net revenue in the
second quarter of fiscal 2006.

    --  Income from operations increased 202% to $9.8 million, or 17% of
revenues, compared to $3.2 million, or 10% of revenues, in the second quarter
of fiscal 2006.

    --  Diluted earnings per share were $0.07 on net income of $5.1 million,
compared to diluted earnings per share of $0.03 on net income of $1.9 million
in the second quarter of fiscal 2006.

    For the six months ended July 31, 2007:

    --  Net revenue increased 70% to $103.5 million compared to $60.7 million
for the same period in fiscal 2006. Net revenue from corporate-owned stores
increased 86% to $91.1 million compared to $49.0 million for the same period
in fiscal 2006, with comparable store sales growth of 25%.

    --  Gross profit as a percentage of net revenue increased 210 basis
points to approximately 52% of revenues from 50% of net revenue in the first
six months of fiscal 2006.

    --  Income from operations increased 78% to $16.6 million, or 16% of
revenues, compared to $9.4 million, or 15% of revenues, in the first six
months of fiscal 2006.

    --  Diluted earnings per share were $0.12 on net income of $8.7 million,
compared to diluted earnings per share of $0.07 on net income of $5.1 million,
for the same period in fiscal 2006.

    Robert Meers, lululemon's CEO stated: "We are pleased to report strong
results in our initial quarter as a public company. Our team has built on the
success of our unique winning formula - vertically retailing technical apparel
for men and women - in a rapidly growing global market for healthy and active
living. All of our managers, educators, brand ambassadors and head office
employees continue to pave the way for the company's success."

    On August 2, 2007, the company completed an initial public offering of
20,930,000 shares of common stock at a price of $18.00 per share, of which
2,290,909 shares were sold by the company and 18,639,091 shares were sold by
certain selling stockholders. Upon completion of the offering, the company and
the selling stockholders received net proceeds of approximately $31.8 million
and $312.0 million, respectively. The company intends to use the net proceeds
from the offering, together with cash flow from operations, to fund new store
openings and working capital, and for other general corporate purposes, which
may include general and administrative expenses and potential acquisitions of
franchises.

    Mr. Meers continued, "We are very pleased with the successful completion
of our initial public offering, and looking ahead, we are excited about the
prospects for our unique brand and retailing model. Our plan is to capitalize
on our expansion opportunities, and we are committed to generating returns for
our stockholders."

    Guidance

    For fiscal 2007, lululemon plans to open 25 new stores in North America,
including the 8 new stores opened in the first two quarters. The Company is on
plan to open the remaining 17 stores in the second half of fiscal 2007 and
continues to expect 30 to 35 new store openings in fiscal 2008.

    Based on results in the first half, the Company expects diluted EPS of
$0.30 to $0.33 in fiscal year 2007 including $0.05 to $0.06 in our third
quarter. We also expect comparable store sales in the mid to high-teen range
for the full year. We anticipate diluted weighted average shares outstanding
of approximately 70.0 million for 2007. The Company's long-term annual
financial targets include comparable store sales growth in the high-single
digit range, net revenue growth of approximately 25% and diluted EPS growth in
excess of 25%.

    Conference Call Information

    A conference call to discuss second quarter results is scheduled for
today, September 10, 2007, at 4:30 PM Eastern Time. Investors interested in
participating in the call are invited to dial (877) 502-9272 approximately ten
minutes prior to the start of the call. Analysts participating in the call are
invited to dial (877) 502-9276. The conference call will also be webcast live
at www.lululemon.com.

    About lululemon athletica inc.

    lululemon athletica (NASDAQ:  LULU; TSX:LLL) is a yoga-inspired athletic
apparel company that creates components for people to live longer, healthier
and more fun lives. By producing products that keep people active and stress
free, lululemon believes that the world will be a better place. Setting the
bar in technical fabrics and functional designs, lululemon works with yogis
and athletes in local communities for continuous research and product
feedback. For more information, visit www.lululemon.com.

    Forward-Looking Statements:

    This press release contains "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934 that involve risks, uncertainties and
assumptions, such as statements regarding our future financial condition or
results of operations, our prospects and strategies for future growth, the
development and introduction of new products, and the implementation of our
marketing and branding strategies. In many cases, you can identify
forward-looking statements by terms such as "may," "will," "should,"
"expects," "plans," "anticipates," "believes," "intends," "estimates,"
"predicts," "potential" or the negative of these terms or other comparable
terminology. These forward-looking statements are based on management's
current expectations but they involve a number of risks and uncertainties.
Actual results and the timing of events could differ materially from those
anticipated in the forward-looking statements as a result of risks and
uncertainties, which include, without limitation: the possibility that we may
not be able to manage operations at our current size or manage growth
effectively; the possibility that we may not be able to locate suitable
locations to open new stores or attract customers to our stores; the
possibility that we may not be able to successfully expand in the United
States and other new markets; the possibility that we may not be able to
finance our growth and maintain sufficient levels of cash flow; increased
competition causing us to reduce the prices of our products or to increase
significantly our marketing efforts in order to avoid losing market share; the
possibility that we may not be able to effectively market and maintain a
positive brand image; the possibility that we may not be able to maintain
recent levels of comparable store sales or average sales per square foot; the
possibility that we may not be able to continually innovate and provide our
consumers with improved products; and the possibility that our suppliers or
manufacturers may not produce or deliver our products in a timely or
cost-effective manner; and other risk factors detailed in our filings with the
Securities and Exchange Commission ("the SEC"), including Risk Factors
contained in our final prospectus relating to our initial public offering
filed included in our Registration Statement on Form S-1 (file no. 333-142477)
filed with the Securities and Exchange Commission and available at
www.sec.gov. You are urged to consider these factors carefully in evaluating
the forward-looking statements herein and are cautioned not to place undue
reliance on such forward-looking statements, which are qualified in their
entirety by this cautionary statement. The forward-looking statements made
herein speak only as of the date of this press release and the company
undertakes no obligation to publicly update such forward-looking statements to
reflect subsequent events or circumstances.

    
                                                               Exhibit (1)
    lululemon athletica inc.
    Consolidated Statements of Operations (unaudited)
    Expressed in thousands of dollars except per share amounts

                           Three Months Three Months Six Months Six Months
                               Ended        Ended       Ended      Ended
                            July 31,     July 31,    July 31,   July 31,
                               2007         2006        2007       2006

    Net revenue                 $58,681      $32,517   $103,470    $60,701

    Costs of goods sold
     (including stock
     based compensation of
     $193, $70, $2,487 and
     $1,543)                     27,434       16,614     49,412     30,278
                           ------------ ------------ ---------- ----------
    Gross Profit                 31,247       15,903     54,058     30,423
       As a percent of
        revenues                  53.2%        48.9%      52.2%      50.1%

    Selling, general and
     administrative
     expenses (including
     stock based
     compensation of
     $1,368, $720, $2,606
     and $982)                   21,477       12,667     37,440     21,073
       As a percent of
        revenues                  36.6%        39.0%      36.2%      34.7%
                           ------------ ------------ ---------- ----------
    Income from operations        9,770        3,236     16,618      9,350
       As a percent of
        revenues                  16.6%        10.0%      16.1%      15.4%

    Other expense
     (income), net                 (70)         (22)      (177)       (44)
                           ------------ ------------ ---------- ----------

    Income before income
     taxes                        9,840        3,258     16,795      9,394

    Provision for income
     taxes                        4,798        1,318      8,247      4,273
    Non-controlling
     interest                      (80)            -      (116)          -
                           ------------ ------------ ---------- ----------

    Net income                   $5,122       $1,940     $8,664     $5,121

    Earnings per share:
       Basic                      $0.08        $0.03      $0.13      $0.08
       Diluted                    $0.07        $0.03      $0.12      $0.07

    Weighted average
    outstanding:
       Basic                 65,225,819   65,225,819 65,225,819 65,225,819
       Diluted               68,891,237   68,881,241 68,878,832 68,868,836
    

    
                                                               Exhibit (2)
    lululemon athletica inc.
    Condensed Consolidated Balance Sheets
    Expressed in thousands of dollars

                                            July 31, 2007 January 31, 2007
    --------------------------------------- ------------- ----------------
                                             (unaudited)
    ASSETS
    Current assets
       Cash and cash equivalents                   $9,727          $16,029
       Inventories                                 23,848           26,628
       Other current assets                         4,704            5,836
                                            ------------- ----------------
    Total current assets                           38,279           48,493

    Property and equipment, net                    27,215           17,737

    Intangible assets, net                          7,205            2,140

    Other assets                                   10,799            3,923
                                            ------------- ----------------
    Total assets                                  $83,498          $72,293
                                            ------------- ----------------



    LIABILITIES AND STOCKHOLDERS' EQUITY
    Current liabilities
       Accounts payable                            $4,928           $4,933
       Other current liabilities                   14,837           17,173
       Income taxes payable                         5,370            9,178
                                            ------------- ----------------
    Total current liabilities                      25,135           31,284

    Other liabilities                               5,897            3,630

    Stockholders' equity                           52,466           37,379
                                            ------------- ----------------
    Total liabilities and stockholders'
     equity                                       $83,498          $72,293
                                            ------------- ----------------
    




For further information:

For further information: lululemon athletica inc. John Currie,
604-732-6124 Chief Financial Officer or Investors: ICR, Inc Joseph
Teklits/Jean Fontana, 203-682-8200

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