Exhibit 99.1
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LULULEMON ATHLETICA INC. ANNOUNCES THIRD QUARTER FISCAL 2018 RESULTS
Revenue up 21% to $748 million
Comparable sales increase 17%, or 18% on a constant dollar basis
Diluted EPS of $0.71, or adjusted diluted EPS of $0.75
Vancouver, British Columbia – December 6, 2018 – lululemon athletica inc. (NASDAQ:LULU) today announced financial results for the third quarter ended October 28, 2018.
The summary below provides both GAAP and adjusted non-GAAP financial measures. The adjusted financial measures exclude the tax expense recognized during the third quarter of fiscal 2018 related to the U.S. Tax Cuts and Jobs Act, and the costs and the related tax effects incurred in connection with the restructuring of the Company's ivivva operations in third quarter of fiscal 2017.
For the third quarter ended October 28, 2018:
Net revenue was $747.7 million, an increase of 21% compared to the third quarter of fiscal 2017. On a constant dollar basis, net revenue increased 22%.
Total comparable sales increased 17%, or increased 18% on a constant dollar basis.
Comparable store sales increased 6%, or increased 7% on a constant dollar basis.
Direct to consumer net revenue increased 44%, or increased 46% on a constant dollar basis.
Direct to consumer net revenue represented 25.3% of total net revenue compared to 21.2% for the third quarter of fiscal 2017.
Gross profit was $406.8 million, an increase of 26% compared to the third quarter of fiscal 2017. Gross profit increased 26% compared to adjusted gross profit for the third quarter of fiscal 2017.
Gross margin was 54.4%, an increase of 240 basis points compared to the third quarter of fiscal 2017. Gross margin increased 220 basis points compared to adjusted gross margin for the third quarter of fiscal 2017.
Income from operations was $135.9 million, an increase of 59% compared to the third quarter of fiscal 2017. Income from operations increased 26% compared to adjusted income from operations for the third quarter of fiscal 2017.
Operating margin was 18.2%, an increase of 440 basis points compared to the third quarter of fiscal 2017. Operating margin increased 80 basis points compared to adjusted operating margin for the third quarter of fiscal 2017.
Income tax expense was $43.5 million compared to $27.7 million in the third quarter of fiscal 2017 and the effective tax rate was 31.6% compared to 32.0%. The adjusted effective tax rate was 27.8% compared to 30.8% in the third quarter of fiscal 2017.
Diluted earnings per share were $0.71 compared to $0.43 in the third quarter of fiscal 2017. Adjusted diluted earnings per share were $0.75 compared to $0.56 for the third quarter of fiscal 2017.
The Company ended the third quarter of fiscal 2018 with $703.6 million in cash and cash equivalents compared to $650.1 million at the end of the third quarter of fiscal 2017. Inventories at the end of the third quarter of fiscal 2018 increased 25% to $496.0 million compared to $396.9 million at the end of the third quarter of fiscal 2017. The Company ended the quarter with 426 stores.
Calvin McDonald, Chief Executive Officer, commented: "lululemon has achieved a high level of success over the past year and has established a solid foundation to continue to build our future. It's been exciting to see guests around the world respond so strongly to our product offerings and improved digital experience. I look forward to what's ahead for our brand as we strive to exceed the expectations of our guests."
Stuart Haselden, Chief Operating Officer, also noted: "We're pleased with our Q3 results and the strong momentum we continue to see across our business. These results reflect the strategic investments we've made, and continue to make, to achieve our long-term growth objectives. I'd like to thank our educators and teams around the world whose passion and enthusiasm enable this ongoing standout performance."

1

The following information was filed by Lululemon Athletica Inc. (LULU) on Thursday, December 6, 2018 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.
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