Lululemon Athletica (LULU) 2020 Q4 Earnings Report Review

Lululemon Athletica Inc (NASDAQ:LULU) has been around for more than two decades. Chip Wilson founded the company in 1998 with a vision to introduce flexible, stretchable, and comfy clothing for yoga. Today, Lululemon is a top athletic and yoga retailer with a presence in several countries around the world.

The Vancouver, Canada-based company recently announced better-than-expected financial results for the fourth quarter. Lululemon reported earnings of $330 million, or $2.52 per share for the three months ended January 31, up from $298 million, or $2.28 per share in the comparable quarter of 2019. Excluding certain items, the adjusted profit of $2.58 per share surpassed the consensus forecast of $2.49 per share.

Revenue for the quarter came in at $1.7 billion, up 24 percent from the year-ago quarter. Analysts on average were expecting Lululemon to post revenue of $1.66 billion. Direct-to-consumer revenue increased nearly two-fold in the quarter, accounting for 52 percent of the total revenue. Moreover, same-store sales in the quarter rose 21 percent.

Commenting on the results, CEO Calvin McDonald said in a statement, “I’m proud of how we navigated this past year and delivered for our employees, guests and shareholders. 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.”

Lululemon also issued its financial outlook for Q1 and full year. It projected adjusted profit in the range of 86 cents per share to 90 cents per share and revenue between $1.10 billion and $1.13 billion for the first quarter. For FY 2021, it is expecting adjusted profit in the range of $6.30 per share to $6.45 per share and revenue between $5.55 billion and $5.65 billion.

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