Lululemon Announces Higher Second Quarter Revenue as Inventory Rises and International Sales Rise
VANCOUVER – Lululemon Athletica Inc. says revenue rose 29% in the second quarter compared to the same period last year, as sales increased across its operations, including higher gains in the online and international segments.
The Vancouver-based sportswear company, which reports in US dollars, said on Thursday it had revenue of US$1.9 billion for the quarter ending July 31, up from US$1.45 billion. US dollars last year, while sales increased 28% in North America and 35% internationally.
Sales rose as the company saw increased traffic both in stores and online, and it was better positioned for inventory than last year, the company’s chief executive, Calvin McDonald, said. during an analysts’ earnings call.
“Much of last year we were understocked and we weren’t able to fully maximize our business. This year we’re in a much better position.”
The sales resulted in net income of US$289.5 million, or US$2.26 per diluted share, up from US$208.1 million or US$1.59 per share for the same quarter last year.
Lululemon was expected to earn $1.87 per share on $1.77 billion in revenue, according to financial data firm Refinitiv.
Total comparable sales increased 23%, including 16% in net store revenue and 30% in direct-to-consumer sales.
Traffic to stores increased by more than 30% and to its online store by more than 40%, McDonald said.
“It’s important to note that we don’t create this traffic through markdowns or price promotions. Lululemon remains primarily a full-price business,” he said.
Lululemon has set a goal of doubling 2021 net sales by 2026, including a quadrupling of international net sales.
To that end, the company is particularly focused on China, where it recently launched a digital flagship store on online retail giant JD.com and, during the quarter, added eight stores in China.
Lululemon will also soon open stores in Spain, its first new market in the region in three years.
Overall, the company opened 21 new directly operated stores during the second quarter, ending July with 600 stores.
Lululemon is also looking to boost sales and customer loyalty closer to home, including with a new two-tier membership program it plans to launch soon.
While recession-related concerns could potentially cause customers to cut back on spending, McDonald’s said the company hasn’t seen any indications of this yet.
“Given the current macro environment, we have been looking closely at our clients’ data and metrics to identify any changes in spending patterns, behaviors or habits. And to date, I’m happy to share that we don’t we find no significant variation.
This report from The Canadian Press was first published on September 1, 2022.
The Canadian Press