lululemon athletica inc. Announces Fourth Quarter and Full Year Fiscal 2023 Results
Fourth quarter revenue increased 16% to $3.2 billion. Diluted EPS of $5.29
Full year revenue increased 19% to $9.6 billion. Diluted EPS of $12.20, adjusted EPS of $12.77
VANCOUVER, British Columbia--(BUSINESS WIRE)--March 21, 2024--
lululemon athletica inc. (NASDAQ:LULU) today announced financial results for the fourth quarter and fiscal year ended January 28, 2024.
Calvin McDonald, Chief Executive Officer, stated: “We are pleased with the strong finish to our 2023 fiscal year and continue to be ahead of our Power of Three ×2 strategy. During the fourth quarter, we saw continued momentum across our channels, geographies, and merchandise categories, driven by our teams around the world. As we step into 2024, we are focused on the significant opportunities ahead for lululemon as we navigate the dynamic retail environment and deliver for guests through innovative new products and brand activations.”
The adjusted non-GAAP financial measures below exclude certain inventory provisions, goodwill and other asset impairments, and restructuring costs recognized in relation to lululemon Studio, the gain on the sale of an administrative office building, and the related tax effects of these items.
For the fourth quarter of 2023, compared to the fourth quarter of 2022:
-- Net revenue increased 16% to $3.2 billion.
-- Americas net revenue increased 9%.
-- International net revenue increased 54%, or 56% on a constant
dollar basis.
-- Comparable sales increased 12%.
-- Americas comparable sales increased 7%.
-- International comparable sales increased 43%, or 44% on a
constant dollar basis.
-- Gross profit increased 25% to $1.9 billion. Adjusted gross profit
increased 20% to $1.9 billion.
-- Gross margin increased 430 basis points to 59.4%. Adjusted gross margin
increased 200 basis points to 59.4%.
-- Income from operations increased 191% to $913.9 million. Adjusted
income from operations increased 16%.
-- Operating margin increased to 28.5% from 11.3% in the fourth quarter of
2022. Adjusted operating margin increased 20 basis points to 28.5%.
-- The effective income tax rate for the fourth quarter of 2023 was 28.1%
compared to 62.3% for the fourth quarter of 2022. The adjusted effective
tax rate was 28.7% for the fourth quarter of 2022.
-- Diluted earnings per share were $5.29 compared to $0.94 in the fourth
quarter of 2022. Adjusted diluted earnings per share were $4.40 for the
fourth quarter of 2022.
-- The Company repurchased 0.1 million of its shares for a cost of $54.0
million.
-- The Company opened 25 net new company-operated stores during the
quarter, ending with 711 stores.
For 2023 compared to 2022:
-- Net revenue increased 19% to $9.6 billion, or increased 20% on a
constant dollar basis.
-- Americas net revenue increased 12%.
-- International net revenue increased 54%, or 58% on a constant
dollar basis.
-- Comparable sales increased 13%, or 14% on a constant dollar basis.
-- Americas comparable sales increased 8%, or 9% on a constant
dollar basis.
-- International comparable sales increased 35%, or 39% on a
constant dollar basis.
-- Gross margin increased 290 basis points to 58.3%. Adjusted gross margin
increased 240 basis points to 58.6%.
-- Operating margin increased 580 basis points to 22.2%. Adjusted
operating margin increased 110 basis points to 23.2%.
-- The effective income tax rate was 28.8% for 2023 compared to 35.9% for
2022. The adjusted effective tax rate was 28.7% for 2023 compared to
28.1% for 2022.
-- Diluted earnings per share were $12.20 compared to $6.68 in 2022.
Adjusted diluted earnings per share were $12.77 in 2023 compared to
$10.07 in 2022.
-- The Company repurchased 1.5 million shares for a cost of $554.6
million.
-- The Company opened 56 net new company-operated stores during the year,
ending with 711 stores.
Meghan Frank, Chief Financial Officer, stated: “Our solid fourth quarter and full year 2023 results demonstrate the strength and resilience of our omni operating model and our differentiated position in the marketplace. Looking ahead, we will stay focused on driving the business forward for the near-and long-term, while operating with agility and discipline. We are still early in our growth journey, and excited for what the future holds.”
Balance Sheet Highlights
The Company ended 2023 with $2.2 billion in cash and cash equivalents compared to $1.2 billion at the end of 2022. It had $393.7 million of capacity under its committed revolving credit facility at the end of 2023.
Inventories at the end of 2023 decreased by 9% to $1.3 billion compared to $1.4 billion at the end of 2022.
Fiscal 2024 Outlook
For the first quarter of 2024, the Company expects net revenue to be in the range of $2.175 billion to $2.200 billion, representing growth of 9% to 10%. Diluted earnings per share are expected to be in the range of $2.35 to $2.40 for the quarter. This assumes a tax rate of 29.0% to 29.5%.
For 2024, the Company expects net revenue to be in the range of $10.700 billion to $10.800 billion, representing growth of 11% to 12%, or 10% to 11% excluding the 53rd week of 2024. Diluted earnings per share are expected to be in the range of $14.00 to $14.20 for the year. This assumes a tax rate of approximately 30%.
The guidance does not reflect potential future repurchases of the Company’s shares.
The guidance and outlook forward-looking statements made in this press release are based on management’s expectations as of the date of this press release and do not incorporate future unknown impacts, including macroeconomic trends. The Company undertakes no duty to update or to continue to provide information with respect to any forward-looking statements or risk factors, whether as a result of new information or future events or circumstances or otherwise. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of risks and uncertainties, including those stated below.
Power of Three ×2
The Company’s Power of Three ×2 growth plan calls for a doubling of the business from 2021 net revenue of $6.25 billion to $12.5 billion by 2026. The key pillars of the plan are product innovation, guest experience, and market expansion and the growth strategy includes a plan to double men’s, double e-commerce, and quadruple international net revenue relative to 2021.
Conference Call Information
A conference call to discuss 2023 results is scheduled for today, March 21, 2024, at 4:30 p.m. Eastern time. Those interested in participating in the call are invited to dial 1-800-319-4610 or 1-604-638-5340, if calling internationally, approximately 10 minutes prior to the start of the call. A live webcast of the conference call will be available online at: A replay will be made available online approximately two hours following the live call for a period of 30 days.
About lululemon athletica inc.
lululemon athletica inc. (NASDAQ:LULU) is a technical athletic apparel, footwear, and accessories company for yoga, running, training, and most other activities, creating transformational products and experiences that build meaningful connections, unlocking greater possibility and wellbeing for all. Setting the bar in innovation of fabrics and functional designs, lululemon works with yogis and athletes in local communities around the world for continuous research and product feedback. For more information, visit lululemon.com.