Lululemon posts strong revenue growth in Q2

Lululemon Athletica Inc., for the second quarter ended August 4, 2019 reported net revenue of 883.4 million dollars, an increase of 22 percent compared to the second quarter of fiscal 2018. On a constant dollar basis, the company said, net revenue increased 23 percent. Total comparable sales increased 15 percent or 17 percent on a constant dollar basis, while comparable store sales increased 10 percent or 11 percent on a constant dollar basis.

Commenting on the second quarter update, Calvin McDonald, the company’s Chief Executive Officer, said in a statement: “We’re pleased with the ongoing strength across our business. Our success demonstrates the significant runway in front of Lululemon and I’m grateful to our teams for bringing our vision to life.”

Lululemon updates outlook

The company’s direct to consumer net revenue increased 30 percent or 31 percent on a constant dollar basis and represented 24.6 percent of total net revenue compared to 23.1 percent for the second quarter of fiscal 2018.

Gross profit was 485.8 million dollars, an increase of 23 percent, while gross margin was 55 percent, an increase of 20 basis points. The company ended the quarter with 460 stores.

For the third quarter of fiscal 2019, the company expects net revenue to be in the range of 880 million dollars to 890 million dollars based on a total comparable sales increase in the low teens on a constant dollar basis. Diluted earnings per share are expected to be in the range of 90 cents to 92 cents for the quarter.

For the full fiscal 2019, Lululemon expects net revenue to be in the range of 3.800 billion dollars to 3.840 billion dollars based on a total comparable sales increase in the low teens on a constant dollar basis. Diluted earnings per share are expected to be in the range of 4.63 dollars to 4.70 dollars for the full year, based on a 27.5 percent effective tax rate.

Picture:Lululemon website