The Canadian athletic-apparel and accessories retailer released quarterly and full-year fiscal 2019 results Thursday after the bell, improving on both top and bottom lines and surpassing more than 1 billion in sales during a single quarter.
For the three-month period ending Feb. 2, revenue jumped 20 percent to $1.39 billion, up from $1.16 billion the same time last year. Total comparable sales, both in store and online, also rose during the quarter, 9 percent and 41 percent, respectively.
For the full year, sales were $3.97 billion, compared with $3.28 billion the year before. That’s a 21 percent increase. In-store comparable sales increased 9 percent, while online sales from the same period were up 35 percent.
Income also increased, to $298 million for the quarter, compared with $218 million the year before. And $645 million for the year, up from $483 million the year before.
“2019 was a strong year for Lululemon, as our teams executed against our Power of Three growth plan,” Calvin McDonald, ceo of Lululemon, said in his prepared remarks. “We are now navigating an extraordinary environment, which is currently impacting our business. The strength of our brand and strong financial position will help us manage through the day-to-day, while continuing to effectively plan for and invest in our future.”
Lululemon was among the retailers earlier this month that temporarily closed stores to prevent the spread of the coronavirus. On March 16, the company closed all stores in North America and Europe until March 27. Last Friday, McDonald tweeted that stores would remain closed until April 5. Stores in New Zealand and Malaysia are also closed, in addition to a distribution center in Washington and the company’s Vancouver, British Columbia headquarters.
As of Feb. 2, the company had 491 stores, including 305 in the U.S., 63 in Canada, 14 in the U.K., seven in New Zealand, six in Germany, three in France and two in Sweden and Malaysia.
As a result of the pandemic, the company is not providing 2020 guidance.
But McDonald said on the conference call with analysts Thursday evening that “Lululemon is in a very healthy position.”
“While we do not know when this [pandemic] will pass, we know that this will pass,” he said. “At our core we solve sweaty problems for athletes. The current outbreak will not change the trend of people wanting to live an active and healthy lifestyle.”
Lululemon ended the quarter with more than a billion dollars in cash and no debt. In addition, in an effort to mitigate risks amid the crisis, the company has slowed the pace of new hires and business travel, pulled back on capital expenditures and reduced marketing spend.
The retailer has also been offering digital meditation sessions and workout classes to keep customers engaged with the brand while its physical stores remain closed and events in hiatus.
And so far, the digital events have been a success. More than 170,000 guests joined a recent Lululemon Instagram class after the North American and European shutdown.
McDonald also pointed toward learnings during the shutdown in China to illustrate the brand’s continued growth: Lululemon gained thousands of followers on WeChat during the period and digital comps in China increased 70 percent during the quarter.
“Since closing [physical stores] our digital business has picked up,” McDonald said on the call. “It’s not completely covering the loss of store volume, but [the digital business] is responding in a positive manner.”
The ceo added that things like yoga mats and accessories have picked up in recent weeks, “as more of our guests sweat at home.”
Lululemon stock closed up 3.7 percent to $200.80 a share on Thursday. Shares are up 19.8 percent year-over-year.
The Dow Jones Industrial Average also closed up Thursday, 6.38 percent, or 1,351.62 points, to 22,552.17 on the federal government’s new stimulus package that will pump $2 trillion dollars into the U.S. economy.