Lululemon Athletica store exterior, Ponce City Market.
John Greim | LightRocket | Getty Images
Lululemon on Thursday reported sales of $1.1 billion, up 22% from a year ago and beating analysts’ estimates, as shoppers frequented the retailer’s stores and website to buy workout apparel during the period.
In North America, net revenue grew 19%, boosted by its e-commerce business. Overall direct to consumer revenue increased 94%, the company said, representing 42.8% of total revenue compared with 26.9% a year ago. This represents the sales that Lululemon makes straight to consumers, using its stores and website, without any middlemen.
Due to the uncertainty around the Covid-19 pandemic, which has forced it to shut a handful of its stores temporarily again, Lululemon is not offering a full outlook for 2020.
However, CFO Meghan Frank noted the company has planned for the holiday quarter “based on multiple performance scenarios,” and believes it to be “well positioned” for the holiday season.
Lululemon shares pared initial gains, falling less than 1% in after-hours trading just before 5 p.m.
Here’s how the retailer did during its fiscal third quarter, compared with what analysts were expecting, based on Refinitiv data:
- Earnings per share: $1.16, adjusted, vs 88 cents, expected
- Revenue: $1.12 billion vs. $1.02 billion, expected
For the quarter ended Nov. 1, Lululemon earned $143.6 million, or $1.10 per share, compared with $126 million, or 96 cents per share, a year ago. Excluding one-time charges, it earned $1.16 per share, better than the 88 cents expected by analysts.
Net revenue rose 22% to $1.12 billion, beating analysts’ estimates of $1.02 billion.
Same-store sales, which track sales made online and at stores open for at least 12 months, were up 19%.
The company said its women’s revenue grew 22% year over year, while men’s was up 14%.
While the apparel category as a whole has struggled this year, Lululemon is one retailer that has reaped the benefits of more consumers focusing on at-home workouts during the pandemic, and opting for comfortable athleisure wear over dresses and suits.
Earlier this year, it also acquired the at-home exercise equipment maker Mirror for $500 million, in a bid to compete with the likes of cycle maker Peloton. During the quarter, Lululemon said it started selling the start-ups $1,500 mirror-like devices in 18 stores and on its website.
As of Thursday’s market close, Lululemon shares are up more than 59% year to date. It has a market cap of $48.1 billion.