lululemon athletica inc. Announces Third Quarter Fiscal 2007 Results



    Third Quarter Net Revenue Increases 84% to $66.2 million

    Operating Income Increases 152% to $11.8 million

    Company Raises Fiscal 2007 Guidance

    VANCOUVER, BRITISH COLUMBIA, November 29 /CNW/ - lululemon athletica inc.
(NASDAQ:   LULU; TSX: LLL) today announced financial results for the three and
nine months ended October 31, 2007.

    For the three months ended October 31, 2007:

    --  Net revenue increased 84% to $66.2 million from $36.0 million for the
third quarter of fiscal 2006. Net revenue from corporate-owned stores was
$59.9 million, an increase of 106% from $29.1 million for the third quarter of
fiscal 2006, with comparable-store sales increasing 36% or 26% on a constant
dollar basis.

    --  Gross profit as a percentage of net revenue increased 210 basis
points to 54.2% of net revenue from 52.1% of net revenue in the third quarter
of fiscal 2006.

    --  Income from operations was $11.8 million, or 17.9% of net revenue,
compared to $4.7 million, or 13.1% of net revenue, in the third quarter of
fiscal 2006.

    --  Diluted earnings per share were $0.11 on net income of $7.6 million,
compared to diluted earnings per share of $0.02 on net income of $1.7 million
in the third quarter of fiscal 2006.

    For the nine months ended October 31, 2007:

    --  Net revenue increased 75% to $169.6 million from $96.7 million in the
first nine months of fiscal 2006. Net revenue from corporate-owned stores was
$151.0 million, an increase of 93% from $78.1 million for the same period in
fiscal 2006, with comparable-store sales increasing 30% or 24% on a constant
dollar basis.

    --  Gross profit as a percentage of net revenue increased 210 basis
points to 53.0% of net revenue from 50.9% of net revenue in the first nine
months of fiscal 2006.

    --  Income from operations was $28.4 million, or 16.8% of net revenue,
compared to $14.0 million, or 14.5% of net revenue, in the first nine months
of fiscal 2006.

    --  Diluted earnings per share were $0.23 on net income of $16.2 million,
compared to diluted earnings per share of $0.10 on net income of $6.8 million
the first nine months of fiscal 2006.

    Robert Meers, lululemon's CEO stated: "We are very pleased to have
delivered another quarter of strong sales and earnings growth. We believe that
our performance during the third quarter further demonstrates that our
innovative product offering, unique culture and distinct community-based
marketing approach creates brand loyalty and continues to attract healthy and
active-minded individuals to the lululemon brand. Based on the strong results
in both our comp stores as well as our new stores, we are extremely excited
about our future growth prospects. "

    Updated Guidance

    For fiscal 2007, lululemon plans to open 27 new stores in North America,
including the 17 new stores opened in the first three quarters. The Company
expects to open the remaining 10 stores in the fourth quarter of fiscal 2007
and continues to expect 30 to 35 new store openings in fiscal 2008.

    Based on results in the first nine months, and continued momentum in the
fourth quarter, the Company is raising its guidance for fiscal 2007 diluted
EPS in the range of $0.40 to $0.42 from previous guidance of $0.30 to $0.33.
The new earnings guidance assumes comparable store sales growth in the high
20's for the fiscal year, or in the low 20's on a constant dollar basis.
Diluted weighted average shares outstanding are expected to be approximately
70.3 million for fiscal 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%.
Commencing in 2008, we anticipate a normalized statutory tax rate of
approximately 34%.

    Beginning with the current fiscal year, lululemon has changed its fiscal
year from the 12 months ending on January 31st of each year to a 52/53 week
fiscal year ending on the first Sunday following January 30th of each year. As
a result, lululemon's 2007 fiscal year will end of February 3, 2008 instead of
January 31, 2008 and lululemon's fourth quarter for fiscal 2007 will have
three additional days. lululemon's 2008 fiscal year will begin on February 4,
2008 and end on February 1, 2009.

    Conference Call Information

    A conference call to discuss third quarter results is scheduled for
today, November 29, 2007, at 9:00 AM Eastern Time. Investors interested in
participating in the call are invited to dial 877-397-0298 approximately ten
minutes prior to the start of the call. 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.

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

                         Three Months Ended         Nine Months Ended
                             October 31,               October 31,
                      ------------------------- --------------------------
                          2007         2006         2007          2006
                      ------------ ------------ ------------- ------------

    Net revenue       $66,150,280  $35,967,615  $169,620,680  $96,668,633
    Cost of goods
     sold (including
     stock-based
     compensation of
     $202,936,
     $76,530,
     $564,975 and
     $240,589)         30,269,860   17,227,413    79,682,472   47,505,884
                      ------------ ------------ ------------- ------------
    Gross profit       35,880,420   18,740,202    89,938,208   49,162,749
                             54.2%        52.1%         53.0%        50.9%
    Selling, general
     and
     administrative
     expenses
     (including
     stock-based
     compensation of
     $1,643,161,
     $530,310,
     $4,249,647 and
     $1,512,616)       24,050,692   14,045,858    61,490,822   35,118,960
                      ------------ ------------ ------------- ------------

    Income from
     operations        11,829,728    4,694,344    28,447,386   14,043,789
    Other expense
     (income), net       (418,938)     (43,219)     (596,401)     (87,642)
                      ------------ ------------ ------------- ------------

    Income before
     income taxes      12,248,666    4,737,563    29,043,787   14,131,431
    Provision for
     income tax         4,763,446    3,131,794    13,010,405    7,404,892
    Non-controlling
     interest             (84,157)     (58,138)     (200,058)     (58,138)
                      ------------ ------------ ------------- ------------

    Net income        $ 7,569,377  $ 1,663,907  $ 16,233,440  $ 6,784,677
                      ------------ ------------ ------------- ------------

    Basic earnings
     per share        $      0.11  $      0.03  $       0.25  $      0.10
    Diluted earnings
     per share        $      0.11  $      0.02  $       0.23  $      0.10

    Basic weighted
     average number
     of shares
     outstanding       67,476,972   65,225,819    65,981,081   65,168,542
                      ------------ ------------ ------------- ------------
    Diluted weighted
     average number
     of shares
     outstanding       71,683,523   67,878,508    69,896,384   67,821,231
                      ------------ ------------ ------------- ------------
    

    
    lululemon athletica inc.
    Condensed Consolidated Balance Sheets
    Expressed in thousands of dollars

                                         October 31, 2007 January 31, 2007
    ------------------------------------ ---------------- ----------------
                                           (unaudited)
    ASSETS
    Current assets
       Cash and cash equivalents            $      36,325    $      16,029
       Inventories                                 49,694           26,628
       Other current assets                         6,360            5,836
                                         ---------------- ----------------
    Total current assets                           92,379           48,493

    Property and equipment, net                    36,377           18,176

    Intangible assets, net                          7,774            2,140

    Other assets                                    4,646            3,484
                                         ---------------- ----------------
    Total assets                            $     141,176    $      72,293
                                         ---------------- ----------------



    LIABILITIES AND STOCKHOLDERS' EQUITY
    Current liabilities
       Accounts payable                     $      12,605    $       4,935
       Other current liabilities                   20,853           17,171
       Income taxes payable                         2,483            9,178
                                         ---------------- ----------------
    Total current liabilities                      35,941           31,284

    Other liabilities                               7,649            3,630

    Stockholders' equity                           97,586           37,379
                                         ---------------- ----------------
    Total liabilities and stockholders'
     equity                                 $     141,176    $      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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LULULEMON ATHLETICA

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