Lululemon revenues rise 24% as direct sales continue to soar

By

Robin Driver

Published
Mar 31, 2021

Lululemon Athletica Inc. announced Q4 revenues of $1.7 billion on Tuesday, up 24% compared to $1.4 billion in the prior-year period as the Vancouver-based athletic apparel company saw its direct-to-consumer sales almost double year over year. In constant currencies, the company’s revenues rose 22%.

 
For the fourth quarter ended January 31, 2021, sales in Lululemon’s direct-to-consumer channel increased 94% year over year, or 92% in constant currencies, and represented 52% of the company’s total revenues, compared to 33% in the fourth quarter of 2019.
 
Lululemon’s progress was spread across the different regions in which it has operations, with quarterly revenues rising 21% in North America and 47% internationally.

Total comparable sales for the period rose 21%, despite the fact that comparable store productivity was 72%, representing a decrease of 28% in comparable store sales.
 
Q4 net income totaled $329.8 million, or $2.52 per diluted share, compared to $298.0 million, or $2.28 per diluted share, in the same period in the previous year.
 
In the full fiscal year 2020, Lululemon’s net revenue came to $4.4 billion, increasing 11% from $4.0 billion in the previous year.
 
Here too, growth was driven by direct-to-consumer revenue, which shot up 101% year over year. The direct channel accounted for 52% of the company’s revenue in 2020, compared to 29% in 2019.
 
Annual earnings at the group were $588.9 million, or $4.50 per diluted share, falling from $645.6 million, or $4.93 per diluted share, in the previous year.
 
Discussing the company’s relative success during a challenging year in a press release, Lululemon CFO Meghan Frank explained, “in response to the Covid-19 pandemic, our teams reacted quickly to ensure we met the evolving needs of our guests. We pulled forward investments in our direct-to-consumer channel, completed our first acquisition, and tightly managed expenses while also supporting our people.”
 
“I'm proud of how we navigated this past year and delivered for our employees, guests and shareholders,” added CEO Calvin McDonald. “Our continued growth demonstrates the strength of Lululemon – before, during and as the pandemic subsides. We are still in the early innings of our growth, fueled by exciting innovations that create even more opportunity into the future.”
 
Looking forward, the company expects to report net revenue in the range of $1.100 billion to $1.130 billion in the first quarter of fiscal 2021, while quarterly earnings per share are expected to be between $0.81 and $0.85.
 
The group’s current guidance for annual revenue ranges from $5.550 billion to $5.650 billion, with diluted earnings per share predicted to total between $6.10 and $6.25 in 2021.
 
Having opened 30 net new stores over the course of 2020, Lululemon currently operates 521 locations around the world.