Lululemon Athletica store exterior, Ponce City Market.
John Greim | LightRocket | Getty Images
Lululemon reported sales of $ 1.1 billion on Thursday, up 22% year over year, beating analysts’ estimates as shoppers visited the retailer’s stores and website to purchase workout clothes during the reporting period.
In North America, net sales increased 19% driven by the e-commerce business. Overall, direct sales to consumers increased 94%, representing 42.8% of total sales, compared to 26.9% a year ago. This represents the sales that Lululemon makes directly to consumers through its stores and website with no intermediaries.
Due to the uncertainty surrounding the Covid-19 pandemic, which has forced it to temporarily close a handful of its stores again, Lululemon doesn’t offer a full outlook for 2020. Like others in retail, Lululemon faces the risk of additional store closings Coronavirus- Cases are still increasing in the US and other parts of the world.
However, CFO Meghan Frank noted that the company planned the holiday quarter “based on multiple performance scenarios” and believes it is “well positioned” for the holiday season. During the week of Thanksgiving and Black Friday, the company announced that its online business was generating record sales, offsetting the decline in store traffic.
Lululemon shares started to make gains, falling around 1% in after-hours trading shortly after 5pm. As of Thursday’s close of trading, Lululemon shares were up more than 59% year-to-date, bringing the company’s market cap to $ 48.1 billion.
Here’s how the retailer performed in the third quarter of fiscal year compared to analyst expectations based on refinitive data:
- Earnings per share: $ 1.16, adjusted versus 88 cents expected
- Revenue: $ 1.12 billion versus $ 1.02 billion expected
For the quarter ended November 1, Lululemon made $ 143.6 million, or $ 1.10 per share, compared to $ 126 million, or 96 cents per share, a year ago. Without a one-time charge, the company made $ 1.16 per share, better than what analysts had expected to be 88 cents.
Net sales rose 22% to $ 1.12 billion, beating analysts’ estimates of $ 1.02 billion.
In-store sales, tracking sales online and in stores that have been open for at least 12 months, increased 19%.
The company said sales for women were up 22% year over year, while those of men were up 14%.
While the entire apparel category has struggled this year, Lululemon is a retailer that has taken advantage of more consumers focusing on exercising at home during the pandemic and opting for comfortable sportswear over dresses and suits.
“While a V-shaped rebound may not happen for most of the apparel retail sector, Lululemon has recovered from a poor start to the year with impressive third quarter numbers,” said Neil Saunders, managing director of GlobalData Retail.
“Our data also shows that Lululemon has attracted a lot of new buyers, especially in women’s fashion,” he added.
Earlier this year, Lululemon also acquired home exercise equipment maker Mirror for $ 500 million to compete with the likes of bike maker Peloton. During the quarter, Lululemon announced it had started selling the startups’ $ 1,500 mirror-like devices in 18 stores and on its website.
The full press release on the result can be found here.
