Lululemon moves higher despite mixed earnings report

Lulu shares are up despite the company missing slightly on revenue for its fourth quarter.

Video Transcript

BRAD SMITH: Switching gears here, we've got another company that's just reported earnings here after the close. Lululemon results have come out. And taking a look at shares, they are moving higher in afterhours trading right now for the ticker symbol, LULU. Seeing shares jump by about 6% on the immediate reaction there. You're taking a look at the actuals versus the estimate. The actuals, revenue came in at $2.1 billion. That's versus the $2.14 billion that was expected there, so slightly below that expectation. And then additionally, on the EPS side, that was a beat that came in at $3.36 a share versus the $3.27 that was expected. So you got a bit of a mixed bag here for Lululemon. Diving into some of the other call-outs that the company has provided, net revenue, that increased 23% for the quarter. And then, additionally here, you also saw North America revenue, net revenue increased 21%. Increased 35% internationally, we should call out as well. And this is a company that certainly has put the rest of the athleisure and the athletic apparel and even getting into the footwear space on notice with regard to the direct-to-consumer strategy and how well that can do. Direct-to-consumer net revenue, that represented 49% of total net revenue. That's compared to 52% for the fourth quarter of 2020. And so we'll get back into that. Inventory certainly comes into play there. And then additionally here, just lastly, the company opened 22 net new company operated stores during the quarter. They ended with 574 stores. So just very briefly here, to bring you back to some of those inventories as well, that is one area where they've actually seen inventories for this most recent quarter higher than in the same comparable quarter last year. And so with that in mind, we'll see what more the company has to say about that particular line of its assets. But as of right now, the company also putting out a statement, and that coming from the chief financial officer, results driven by consistently strong performance across their products, channels, regions. In addition, for the fourth quarter and full year, they delivered revenue growth above some of their power of three goals-- we can break that down even further in a later conversation-- and despite the continued impact of COVID-19 and global supply chain issues. And so that coming from Meghan Frank, the chief financial officer of Lululemon. And again, just continuing to track shares here in afterhours trading, they are moving higher here by about 5.3%. And lastly, I'll just round this out with a statement from Calvin McDonald, who's the chief executive officer, and really rounding out 2021 as another successful year for the company, talking to the enduring strength of their brand, ability to deliver sustained growth across the business and proud that they passed the $6 billion in annual revenue milestone for the first time. And so that portion of the comment from Calvin McDonald as well. And so we'll see where some of their new measures to facilitate even more growth, especially in the footwear category, where that takes hold and what more they'll be able to provide on that front, going into the earnings call. But with that in mind, let's go to a quick break. We're going to have much more on these earnings and keep tabs on both Lululemon and Micron here as we move forward.