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Earnings Highlights and Review: Lululemon Reported Better-than-expected Results

Research Desk Line-up: Oxford Industries Post Earnings Coverage

LONDON, UK / ACCESSWIRE / June 22, 2017 / Pro-Trader Daily has just published a free post-earnings coverage on Lululemon Athletica Inc. (NASDAQ: LULU), which can be viewed by registering at http://protraderdaily.com/optin/?symbol=LULU, following the Company's announcement of its first quarter fiscal 2017 financial results on June 01, 2017. The Premium athletic apparel maker reported a 5% increase in revenue and unveiled a plan to restructure its ivivva operations. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member's account at:


Get more of our free earnings reports coverage from other constituents of the Textile - Apparel Clothing industry. Pro-TD has currently selected Oxford Industries, Inc. (NYSE: OXM) for due-diligence and potential coverage as the Company announced on June 06, 2017, its financial results for Q1 FY17 which ended on April 29, 2017. Register for a free membership today, and be among the early birds that get access to our report on Oxford Industries when we publish it.

At Pro-TD, we make it our mission to bring you news that matter about the stock you follow. Today, our research desk covers a blog story on LULU; also brushing on OXM. With the links below you can directly download the report of your stock of interest free of charge at:



Earnings Reviewed

For the first quarter ended April 30, 2017, Lululemon's net revenue was $520.31 million, an increase of 5% compared to Q1 2016 revenue of $495.52 million. The Company's revenue numbers came in ahead of analysts' expectations of $514 million. Lululemon's total comparable sales decreased 1% compared to the year ago period. Lululemon's direct to consumer net revenue was flat on a y-o-y basis.

For Q1 2017, Lululemon's gross profit improved 7% to $256.90 million compared to $239.13 million in Q1 2016. The Company's adjusted gross profit for the reported quarter totaled $262.3 million, up 10% on a y-o-y basis. Lululemon's gross margin was 49.4% in Q1 2017, representing an increase of 110 basis points compared to gross margin of 48.3% in Q1 2016. Adjusted gross margin was 50.4%, reflecting an increase of 210 basis points.

Lululemon's income from operations was $45.4 million down 21% compared to $57.59 million in Q1 2016. The Company's adjusted income from operations totaled $63.2 million, an increase of 10%. Lululemon's operating margin for Q1 2017 was 8.7%, a decrease of 290 basis points compared to operating margin of 11.6% in Q1 2016. Adjusted operating margin was 12.1%, an increase of 50 basis points.

For Q1 2017, Lululemon reported earnings of $31.2 million, or $0.23 per share, compared with earnings of $45.3 million, or $0.33 per share, in Q1 2016. Adjusted for one-time items, including restructuring charges related to Ivivva, the Company posted earnings of $0.33 per share compared with $0.30 per share in the year ago same period and ahead of Wall Street's forecasts of $0.28 per share.

Cash Matters

Lululemon ended Q1 2017 with $698.3 million in cash and cash equivalents compared to $550.0 million at the end of Q1 2016. Inventories at the end of the reported quarter increased by 6% to $303.9 million compared to $286.2 million at the end of the prior year's corresponding quarter. The Company ended the quarter with 411 stores.

Restructuring ivivva

Lululemon plans to operate ivivva, its activewear brand for girls, as a primarily ecommerce focused business, with a select number of stores in key communities across North America. The Company is expected to close approximately 40 of its 55 ivivva branded stores and to convert approximately half of the remaining stores to lululemon branded stores. Lululemon stated that it will also close all of its ivivva branded showrooms and other temporary locations, and will streamline its corporate infrastructure.

Lululemon expects the closures and restructuring to be substantially completed by the end of Q3 2017. In connection with this restructuring plan, the Company recognized pre-tax costs totaling $17.7 million in Q1 2017.

Updated Outlook

For Q2 2017, Lululemon is forecasting net revenue to be in the range of $565 million to $570 million based on a total comparable sales increase in the low-to-mid single digits on a constant dollar basis. The Company expects diluted earnings per share to be in the range of $0.13 to $0.15. Excluding the impact of the ivivva restructuring, Lululemon expects adjusted diluted earnings per share to be in the range of $0.33 to $0.35.

For FY17, Lululemon is projecting net revenue to be in the range of $2.53 billion to $2.58 billion based on a total comparable sales increase in the low-single digits on a constant dollar basis. The Company's diluted earnings per share are expected to be in the range of $1.97 to $2.07. Excluding the impact of the ivivva restructuring, Lululemon estimates adjusted diluted earnings per share to be in the range of $2.28 to $2.38 for the year.

Stock Performance

At the closing bell, on Wednesday, June 21, 2017, Lululemon Athletica's stock rose 1.39%, ending the trading session at $53.29. A total volume of 1.80 million shares were traded at the end of the day. In the last month, shares of the Company have advanced 7.63%. Shares of the Company have a PE ratio of 25.28 and currently have a market cap of $7.31 billion.

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