Yahoo Finance’s Sibile Marcellus joins Heidi Chung to breakdown Lululemon’s first quarter results, as the company reports a decline in sales due to the coronavirus pandemic.
HEIDI CHUNG: Now I want to get to Lululemon shares, which are sinking today after the company reported fiscal first-quarter earnings. There's good and bad news in that report. So I want to get straight to Yahoo Finance's Sibile Marcellus for. the details. Sibile?
SIBILE MARCELLUS: Lululemon, known for its pricey yoga pants, has actually seen its sales drop significantly during the last quarter. That's despite the fact that online sales surged 70%. So here are the numbers. Net revenue fell 17% to $652 million for the quarter. Operating income fell 75% from a year ago to $32.8 million.
Now, the company doesn't expect earnings growth until the fourth quarter and has chosen not to give guidance for the rest of the year because there's so much uncertainty. But Lululemon stocks fell in March, like many other retailers, but have since more than doubled in that period of time. Now, in terms of the stores that Lulu has right now, 295 of them have reopened out of the total 400 that they have worldwide. But the company expects that by the end of June, all of their stores will be opened.
HEIDI CHUNG: And Sibile, it's no secret that the retail industry has been faced with a lot of challenges, just given the COVID-19 pandemic. But that being said, online sales have been a true bright spot for the industry. But on the flip side, because of the surge in online sales, we're starting to see a lot of challenges brewing when it comes to customer service. So what's the update on that front?
SIBILE MARCELLUS: Yeah, customer service-- I mean, it's been a real challenge for many retailers that didn't have as strong an e-commerce business as say, for example, a Walmart or an Amazon, to keep up. Plenty of stores-- we're talking retailers like Macy's, Best Buy, Lululemon, Wayfair-- have been struggling to keep up when customers didn't like what they had, want it returned, and wanted a refund. Customers have complained, reportedly, about long lines on the phone, not getting their refunds as quickly as they would like, and these retailers have basically just been playing catch-up, trying to deal with the huge surge of demand.
HEIDI CHUNG: Thanks, Sibile Marcellus, for the breakdown. Have a great weekend.