Lululemon announced Thursday’s fourth quarter results for Thursday, which exceeded expectations as sales in the same business increased 20% over the period. Thanks in part to more men shopping in stores and online.
However, due to the uncertainty surrounding the coronavirus pandemic, the yoga pants manufacturer said that it would not provide any outlook for fiscal 2020 at this time. The stock fell around 2% in after-hours trading.
How the company developed in the fourth quarter compared to analysts’ expectations on the basis of refinitive data:
- Earnings per share: $ 2.28 expected vs. $ 2.24
- Revenue: $ 1
Net income increased from $ 218.5 million, or $ 1.65 per share, a year ago to $ 298 million, or $ 2.28 per share. That was better than the $ 2.24 a share analysts had expected based on refinitive data.
Net sales increased approximately 20% from $ 1.17 billion a year earlier to $ 1.40 billion. Analysts claimed sales of $ 1.38 billion.
Sales in the same store increased by 20% overall, the company said. Digital revenue increased 41% in the quarter. Men’s earnings increased 32% and women 17%.
“The strength of our brand and strong financial position will help us master everyday life while effectively planning and investing in our future,” said CEO Calvin McDonald in a statement.
In February, due to the increasing spread of COVID-19, Lululemon temporarily closed all stores in mainland China. It was said on Thursday that all but one of these stores have reopened since then. Earlier this month, Lululemon temporarily closed all stores in North America, Europe, Malaysia, and New Zealand because of the virus. It also temporarily closed a distribution center in Sumner, Washington.
Based on information from China, McDonald told analysts on Thursday that he was confident that the business would “recover”. He said that sales in China are not yet at their level before regional stores close. But the volume is improving “week after week,” he said.
Lululemon stores in the US, Canada and other markets are reopening “market by market,” the CEO said based on local information. “Our stores are reopening. … Lululemon is in a very healthy position.” However, he warned that the company plans to do business in North America longer than in China.
In the meantime, Lululemon is confident that even then, the retailer won’t have to worry about offering items for sale in the future to get them off the shelves, even if buyers don’t want to buy leggings and sports bras today.
Much of Lululemon’s goods are “less seasonal” compared to other clothing categories, McDonald said. “Styles can be saved for future use.”
“We don’t think so [the coronavirus] will change the trend towards people who want to live an active and healthy lifestyle, “he added.
When managing expenses, Lululemon said there will be fewer store openings and conversions in the near future.
The Lululemon share closed Thursday up 3.7%. The stock fell about 15% this year. The company has a market cap of around $ 26.2 billion.
Read the full press release here.