Post Earnings Coverage as Lululemon Net Income Stretched 28%

Upcoming AWS Coverage on Vince Holding Post-Earnings Results

LONDON, UK / ACCESSWIRE / December 14, 2016 / Active Wall St. announces its post-earnings coverage on Lululemon Athletica Inc. (NASDAQ: LULU). The Company released its third quarter fiscal 2016 earnings results on December 07, 2016. The athletic apparel maker reported higher quarterly sales, with gross profit increasing 24%. The Company also announced a $100 million stock repurchase program. Register with us now for your free membership at: http://www.activewallst.com/register/.

One of Lululemon Athletica’s competitors within the Textile – Apparel Clothing space, Vince Holding Corp. (NYSE: VNCE), reported on December 08, 2016, its unaudited results for the third quarter of fiscal 2016 ended October 29, 2016. AWS will be initiating a research report on Vince Holding in the coming days.

Today, AWS is promoting its earnings coverage on LULU; touching on VNCE. Get our free coverage by signing up to:

http://www.activewallst.com/registration-3/?symbol=LULU

http://www.activewallst.com/registration-3/?symbol=VNCE

Earnings Reviewed

For the three months ended on October 30, 2016, Lululemon reported that net revenue increased by 13% to $544.4 million from $479.7 million in Q3 2015, topping analysts’ estimates of $542.7 million. The company’s total comparable sales increased by 7%, comprising of a bricks and mortar comp store sales increase of 4% and an e-commerce comp sale increase of 16% on a y-o-y basis. Lululemon also increased total square footage by 11% versus last year, driven by the addition of 35 net new Company-operated stores since Q3 2015, 14 net new stores in the United States, 2 stores in Canada, 4 in Europe, 3 in Asia and 13 Aviva stores, however offset with 1 store closure in Australia. At the end of Q3 2016, the company had a total of 56 showrooms in operation, 20 in international markets and 36 in North America.

Revenues from Company-operated stores totaled $393.5 million, or 72.3% of total revenue in Q3 2016 compared to 73.7% of total revenue in the year ago same period. Revenues from Lululemon’s digital channel totaled $104 million, or 19.1% of total revenue, compared to 18.6% of total revenue in Q3 2015. Other revenue, which comprises of outlets, showrooms, strategic sales, franchises, pop-up stores, and warehouse sales, totaled $46.9 million in the reported quarter compared to other revenue of $37 million in Q3 2015.

For Q3 2016, Lululemon’s gross profit increased by 24% to $278.4 million, and as a percentage of net revenue gross profit was 51.1% compared to 46.9% in Q3 2015. The company’s income from operations increased by 36% to $93.0 million in Q3 2016 from $68.2 million in the year earlier same quarter, and as a percentage of net revenue was 17.1% in the reported quarter compared to 14.2% of net revenue in Q3 2015.

Lululemon’s net income for Q3 2016 was $68.3 million, or diluted earnings per share of $0.50, compared to net income of $53.2 million, or $0.38 per diluted share, in Q3 2015. Excluding certain tax and related interest adjustments, diluted earnings per share were $0.47 for the reported quarter compared to $0.35 for Q3 2015. The Company’s earnings numbers surpassed Wall Street’s expectations of $0.43 per share.

Liquidity and Capital Resources

As of October 30, 2016, Lululemon had $480.4 million in cash and cash equivalents compared to $403.4 million at the end of Q3 2015. Inventories at the end of Q3 2016 increased by 2% to $364.5 million compared to $357.8 million at the end of Q3 2015.

Lululemon also announced that its board of directors has approved a stock repurchase program for up to $100 million of its common shares in the open market at prevailing market prices. The timing and actual number of common shares to be repurchased will depend upon market conditions and other factors, in accordance with Securities and Exchange Commission requirements.

Outlook

For Q4 2016, Lululemon is projecting net revenue to be in the range of $765 million to $785 million based on total comparable sales in the mid-single digits on a constant dollar basis. The Company’s diluted earnings per share are expected to be in the range of $0.96 to $1.01 for Q4 2016.

For FY16, the Company is forecasting net revenue to be in the range of $2.320 billion to $2.340 billion based on total comparable sales in the mid-single digits on a constant dollar basis. Lululemon is estimating diluted earnings per share to be in the range of $2.18 to $2.23 for FY16, or $2.11 to $2.16 normalized for the tax and related interest adjustments made during the first three quarters of FY16.

Stock Performance

On Tuesday, the stock closed the trading session at $68.48, dropping 1.76% from its previous closing price of $69.71. A total volume of 2.49 million shares have exchanged hands. Lululemon Athletica’s stock price rallied 18.40% in the last month, and 43.29% in the previous twelve months. Furthermore, on a year to date basis, the stock soared 30.51%. Shares of the company have a PE ratio of 33.10.

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