lululemon athletica inc. Announces First Quarter Fiscal 2024 Results
Board of Directors Authorizes $1.0 Billion Increase in Its Stock Repurchase Program
Revenue increased 10% to $2.2 billion
Comparable sales increased 6%, or increased 7% on a constant dollar basis
Diluted EPS of $2.54
VANCOUVER, British Columbia--(BUSINESS WIRE)--June 05, 2024--
lululemon athletica inc. (NASDAQ:LULU) today announced financial results for the first quarter of fiscal 2024, which ended on April 28, 2024.
Calvin McDonald, Chief Executive Officer, stated: “In the first quarter, we saw strong momentum in our international markets, demonstrating how our brand continues to resonate around the world. Guests responded well to our product innovations across categories, and we are pleased by the progress we are making to optimize our U.S. product assortment. Looking ahead, we continue to have a significant runway for growth and are confident in our team’s ability to powerfully deliver for our guests in 2024 and beyond.”
For the first quarter of 2024, compared to the first quarter of 2023:
-- Net revenue increased 10% to $2.2 billion, or increased 11% on a
constant dollar basis.
-- Americas net revenue increased 3%, or 4% on a constant dollar
basis.
-- International net revenue increased 35%, or 40% on a constant
dollar basis.
-- Comparable sales increased 6%, or 7% on a constant dollar basis.
-- Americas comparable sales were flat compared to the first
quarter of 2023.
-- International comparable sales increased 25%, or 29% on a
constant dollar basis.
-- Gross profit increased 11% to $1.3 billion.
-- Gross margin increased 20 basis points to 57.7%.
-- Income from operations increased 8% to $432.6 million.
-- Operating margin decreased 50 basis points to 19.6%.
-- The effective income tax rate for the first quarter of 2024 was 29.5%
compared to 29.1% for the first quarter of 2023.
-- Diluted earnings per share were $2.54 compared to $2.28 in the first
quarter of 2023.
-- The Company ended the first quarter of 2024 with 711 company-operated
stores.
Meghan Frank, Chief Financial Officer, stated: “We reported first quarter results ahead of our expectations as we operated with agility and continued to make strategic investments in the business. As we look to the rest of the year, we remain focused on leveraging our strengths and differentiated model to advance our Power of Three ×2 strategy and fuel performance. We are energized by the opportunities in front of us and believe we are well-positioned to drive sustainable, long-term growth.”
Stock Repurchase Program
During the first quarter of 2024, the Company repurchased 0.8 million shares of its common stock for a cost of $296.9 million.
On May 29, 2024, the board of directors approved a $1.0 billion increase to the Company’s stock repurchase program. Including this increase, as of June 5, 2024, the Company had approximately $1.7 billion remaining authorized on its stock repurchase program.
Balance Sheet Highlights
The Company ended the first quarter of 2024 with $1.9 billion in cash and cash equivalents and the capacity under its committed revolving credit facility was $393.8 million.
Inventories at the end of the first quarter of 2024 decreased 15% to $1.3 billion compared to $1.6 billion at the end of the first quarter of 2023.
2024 Outlook
For the second quarter of 2024, the Company expects net revenue to be in the range of $2.400 billion to $2.420 billion, representing growth of 9% to 10%. Diluted earnings per share are expected to be in the range of $2.92 to $2.97 for the quarter. This assumes a tax rate of approximately 30%.
For 2024, the Company continues to expect 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. It continues to expect operating margin for the year to be approximately 23.3%. Diluted earnings per share are now expected to be in the range of $14.27 to $14.47 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.