Current Report
UNITED STATES
SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 10, 2009
lululemon athletica
inc.
(Exact name of registrant as
specified in its charter)
| Delaware | 001-33608 | 20-3842867 | ||
| (State or other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
|
2285 Clark
Drive
Vancouver, British Columbia Canada, |
V5N 3G9 | |
| (Address of Principal Executive Offices) | (Zip Code) |
Registrant’s telephone number, including area code: (604) 732-6124
| (Former name or former address if changed since last report.) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o
Soliciting material pursuant
to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant to Rule
14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule
13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
1
Item 2.02. Results of Operations and Financial Condition.
On September 10, 2009, lululemon athletica inc. (the “Company”) issued a press release announcing its financial results for the second fiscal quarter ended August 2, 2009 and certain other information. A copy of the Company’s press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference. As previously announced, the Company has scheduled a conference call for 9:00 a.m. EST on September 10, 2009 to discuss financial results.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No.
Description
99.1
Press release entitled “lululemon
athletica inc. Announces Second Quarter Fiscal 2009 Results”, issued by
the Company on September 10, 2009.
2
SIGNATURES
Pursuant to the
requirements of the Securities Exchange Act of 1934, as amended, the registrant
has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
3
lululemon athletica inc.
Dated: September 10, 2009
/s/
John E. Currie
John E. Currie
Chief Financial Officer
Exhibit 99.1
LULULEMON ATHLETICA INC. ANNOUNCES SECOND QUARTER FISCAL 2009 RESULTS
Second Quarter Net Revenue Increases 14% to $97.7 million
Second Quarter Diluted EPS of $0.13
Second Quarter Net Revenue Increases 14% to $97.7 million
Second Quarter Diluted EPS of $0.13
Vancouver, Canada — September 10, 2009
— lululemon athletica inc. [NASDAQ: LULU; TSX: LLL] today
announced financial results for the thirteen weeks ended August 2, 2009.
For the thirteen weeks ended August 2, 2009:
| • | Net revenue increased 14% to $97.7 million from $85.5 million for the second quarter of fiscal 2008. Net revenue from corporate-owned stores was $85.1 million, an increase of 9% from $78.3 million for the second quarter of fiscal 2008, with a comparable-store sales decline of 2% on a constant-dollar basis compared to the second quarter of fiscal 2008. |
| • | Gross profit as a percentage of net revenue decreased to 46.2% from 51.9% of net revenue in the second quarter of fiscal 2008. |
| • | Income from operations was $14.3 million, or 14.7% of net revenue, compared to $15.5 million, or 18.2% of net revenue, in the second quarter of fiscal 2008. |
| • | Diluted earnings per share was $0.13 on net income of $9.2 million, compared to diluted earnings per share of $0.16 on net income of $11.1 million in the second quarter of fiscal 2008. |
For the twenty-six weeks ended August 2, 2009:
| • | Net revenue increased 10% to $179.4 million from $162.4 million for the same period of fiscal 2008. Net revenue from corporate-owned stores was $158.0 million, an increase of 7% from $147.7 million for the same period of fiscal 2008, with a comparable-store sales decline of 5% on a constant-dollar basis compared to the first two quarters of fiscal 2008. |
| • | Gross profit as a percentage of net revenue decreased to 44.7% from 52.6% of net revenue in the first two quarters of fiscal 2008. |
| • | Income from operations was $24.2 million, or 13.5% of net revenue, compared to $27.5 million, or 16.9% of net revenue, in the first two quarters of fiscal 2008. |
| • | Diluted earnings per share was $0.22 on net income of $15.8 million, compared to diluted earnings per share of $0.27 on net income of $19.6 million in the first two quarters of fiscal 2008. |
The Company ended the quarter with $83.8 million in cash and cash equivalents as compared to $56.8
million at the end of fiscal 2008. Inventory at the end of the quarter totaled $46.5 million as
compared to $52.1 million at the end of fiscal 2008.
Christine Day, lululemon’s CEO stated: “At the halfway mark of 2009, we are very pleased with the
improving sales momentum in our business, which we believe demonstrates the power of our brand as
well as our innovative product offerings, effective market strategy and strength of our management
team. Our strong community relationships and focus on healthy lives combined with a continuous flow
of well designed, functional, high-quality merchandise is creating a justifiable purchase even to
the cautious consumer.” Ms. Day continued, “We were also able to improve our gross margin
sequentially over the first quarter. This rebound was a result of better same-store sales, our
enhanced systems, and an operating model that is allowing us to operate with leaner inventory and
therefore gain market share without resorting to markdowns.”
Updated Guidance
For the third quarter of fiscal 2009 we expect comparable-store sales to be relatively flat on a
constant-dollar basis compared to the third quarter of fiscal 2008. We anticipate reported net
revenue to be in the range of $95 million to $100 million
for the quarter, and diluted earnings per share
in the range of $0.11 to $0.13 for the quarter. This assumes a tax rate of 35% and 70.6 million
diluted weighted-average shares outstanding.
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Conference Call Information
A conference call to discuss second quarter results is scheduled for today, September 10, 2009, at
9:00 AM Eastern Time. Investors interested in participating in the call are invited to dial (888)
417-8516 approximately ten minutes prior to the start of the call. The conference call will also be
webcast live at
www.lululemon.com
. The webcast will be accessible on our website for approximately
30 days after the call.
About lululemon athletica inc.
lululemon athletica (NASDAQ:LULU; TSX:LLL) is a yoga-inspired athletic apparel company that creates components for people to live longer, healthier and more fun lives. By producing products that help keep people active and stress free, lululemon believes that the world will be a better place. Setting the bar in technical fabrics and functional designs, lululemon works with yogis and athletes in local communities for continuous research and product feedback. For more information, visit www.lululemon.com .
lululemon athletica (NASDAQ:LULU; TSX:LLL) is a yoga-inspired athletic apparel company that creates components for people to live longer, healthier and more fun lives. By producing products that help keep people active and stress free, lululemon believes that the world will be a better place. Setting the bar in technical fabrics and functional designs, lululemon works with yogis and athletes in local communities for continuous research and product feedback. For more information, visit www.lululemon.com .
Non-GAAP Financial Measure
Constant-dollar net revenue changes, which exclude the impact of changes in foreign exchange rates, is not a U.S. Generally Accepted Accounting Principle (“GAAP”) performance measure. We provide constant-dollar net revenue changes because we use the measure to understand the underlying growth rate of revenue excluding the impact on a quarter by quarter basis of changes in foreign exchange rates, which are not under management’s direct control. We believe that disclosing net revenue changes on a constant-dollar basis is useful to investors because it enables them to better understand the level of growth of our business.
Constant-dollar net revenue changes, which exclude the impact of changes in foreign exchange rates, is not a U.S. Generally Accepted Accounting Principle (“GAAP”) performance measure. We provide constant-dollar net revenue changes because we use the measure to understand the underlying growth rate of revenue excluding the impact on a quarter by quarter basis of changes in foreign exchange rates, which are not under management’s direct control. We believe that disclosing net revenue changes on a constant-dollar basis is useful to investors because it enables them to better understand the level of growth of our business.
Forward-Looking Statements:
This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 that involve risks, uncertainties and assumptions, such as statements regarding our future financial condition or results of operations, our prospects and strategies for future growth, the development and introduction of new products, and the implementation of our marketing and branding strategies. In many cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “outlook,” “believes,” “intends,” “estimates,” “predicts,” “potential” or the negative of these terms or other comparable terminology. These forward-looking statements are based on management’s current expectations but they involve a number of risks and uncertainties. Actual results and the timing of events could differ materially from those anticipated in the forward-looking statements as a result of risks and uncertainties, which include, without limitation: the possibility that we may not be able to manage operations at our current size or manage growth effectively; risks that consumer spending may continue to decline and that U.S. and global macroeconomic conditions may worsen; the possibility that levels of comparable-store sales or average sales per square foot will decline; the possibility that we may not be able to successfully expand in the United States and other new markets; increased competition causing us to reduce the prices of our products or to increase significantly our marketing efforts in order to avoid losing market share; the possibility that we may not be able to continually innovate and provide our consumers with improved products; the possibility that our suppliers or manufacturers may not produce or deliver our products in a timely or cost-effective manner; and other risk factors detailed in our Annual Report on Form 10-K for the fiscal year ended February 1, 2009 and in our subsequent reports on Form 10-Q filed with the Securities and Exchange Commission and available at www.sec.gov . You are urged to consider these factors carefully in evaluating the forward-looking statements contained herein and are cautioned not to place undue reliance on such forward-looking statements, which are qualified in their entirety by these cautionary statements. The forward-looking statements made herein speak only as of the date of this press release and the company undertakes no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.
This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 that involve risks, uncertainties and assumptions, such as statements regarding our future financial condition or results of operations, our prospects and strategies for future growth, the development and introduction of new products, and the implementation of our marketing and branding strategies. In many cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “outlook,” “believes,” “intends,” “estimates,” “predicts,” “potential” or the negative of these terms or other comparable terminology. These forward-looking statements are based on management’s current expectations but they involve a number of risks and uncertainties. Actual results and the timing of events could differ materially from those anticipated in the forward-looking statements as a result of risks and uncertainties, which include, without limitation: the possibility that we may not be able to manage operations at our current size or manage growth effectively; risks that consumer spending may continue to decline and that U.S. and global macroeconomic conditions may worsen; the possibility that levels of comparable-store sales or average sales per square foot will decline; the possibility that we may not be able to successfully expand in the United States and other new markets; increased competition causing us to reduce the prices of our products or to increase significantly our marketing efforts in order to avoid losing market share; the possibility that we may not be able to continually innovate and provide our consumers with improved products; the possibility that our suppliers or manufacturers may not produce or deliver our products in a timely or cost-effective manner; and other risk factors detailed in our Annual Report on Form 10-K for the fiscal year ended February 1, 2009 and in our subsequent reports on Form 10-Q filed with the Securities and Exchange Commission and available at www.sec.gov . You are urged to consider these factors carefully in evaluating the forward-looking statements contained herein and are cautioned not to place undue reliance on such forward-looking statements, which are qualified in their entirety by these cautionary statements. The forward-looking statements made herein speak only as of the date of this press release and the company undertakes no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.
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Contacts:
Investor Contact:
Joseph Teklits/Jean Fontana
ICR, Inc
203-682-8200
Joseph Teklits/Jean Fontana
ICR, Inc
203-682-8200
Media Contact:
Evan Goetz/Diane Zappas
FD
212-850-5600
Evan Goetz/Diane Zappas
FD
212-850-5600
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lululemon athletica inc.
Condensed Consolidated Statements of Operations
Expressed in thousands, except per share amounts
(Unaudited)
Condensed Consolidated Statements of Operations
Expressed in thousands, except per share amounts
(Unaudited)
| Thirteen | Thirteen | Twenty-Six | Twenty-Six | |||||||||||||
| Weeks Ended | Weeks Ended | Weeks Ended | Weeks Ended | |||||||||||||
| August 2, 2009 | August 3, 2008 | August 2, 2009 | August 3, 2008 | |||||||||||||
|
|
||||||||||||||||
|
Net revenue
|
$ | 97,721 | $ | 85,484 | $ | 179,401 | $ | 162,424 | ||||||||
|
Costs of goods sold
|
52,557 | 41,108 | 99,213 | 76,947 | ||||||||||||
|
|
||||||||||||||||
|
Gross profit
|
45,164 | 44,376 | 80,188 | 85,477 | ||||||||||||
|
As a percent of net revenue
|
46.2 | % | 51.9 | % | 44.7 | % | 52.6 | % | ||||||||
|
Selling, general and
administrative expenses
|
30,832 | 28,832 | 56,003 | 57,987 | ||||||||||||
|
As a percent of net revenue
|
31.6 | % | 33.7 | % | 31.2 | % | 35.7 | % | ||||||||
|
|
||||||||||||||||
|
Income from operations
|
14,332 | 15,544 | 24,185 | 27,490 | ||||||||||||
|
As a percent of net revenue
|
14.7 | % | 18.2 | % | 13.5 | % | 16.9 | % | ||||||||
|
Other income, net
|
23 | 211 | 101 | 489 | ||||||||||||
|
|
||||||||||||||||
|
Income before income taxes
|
14,355 | 15,755 | 24,286 | 27,979 | ||||||||||||
|
Provision for income taxes
|
5,111 | 3,415 | 8,524 | 7,169 | ||||||||||||
|
|
||||||||||||||||
|
Net income from continuing
operations
|
$ | 9,244 | $ | 12,340 | $ | 15,762 | $ | 20,810 | ||||||||
|
Net loss from discontinued
operations
|
— | (1,192 | ) | — | (1,186 | ) | ||||||||||
|
Net income
|
$ | 9,244 | $ | 11,148 | $ | 15,762 | $ | 19,624 | ||||||||
|
|
||||||||||||||||
|
Basic earnings (loss) per share:
|
||||||||||||||||
|
Continuing operations
|
$ | 0.13 | $ | 0.18 | $ | 0.22 | $ | 0.31 | ||||||||
|
Discontinued operations
|
— | (0.02 | ) | — | (0.02 | ) | ||||||||||
|
|
||||||||||||||||
|
Net basic earnings per share
|
$ | 0.13 | $ | 0.16 | $ | 0.22 | $ | 0.29 | ||||||||
|
Diluted earnings (loss) per share:
|
||||||||||||||||
|
Continuing operations
|
$ | 0.13 | $ | 0.18 | $ | 0.22 | $ | 0.29 | ||||||||
|
Discontinued operations
|
— | (0.02 | ) | — | (0.02 | ) | ||||||||||
|
|
||||||||||||||||
|
Net diluted earnings per share
|
$ | 0.13 | $ | 0.16 | $ | 0.22 | $ | 0.27 | ||||||||
|
Weighted–average outstanding:
|
||||||||||||||||
|
Basic
|
69,948 | 68,107 | 70,176 | 67,892 | ||||||||||||
|
Diluted
|
70,401 | 70,376 | 70,473 | 70,800 | ||||||||||||
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lululemon athletica inc.
Condensed Consolidated Balance Sheets
Expressed in thousands
Condensed Consolidated Balance Sheets
Expressed in thousands
| August 2, 2009 | February 1, 2009 | |||||||
| (unaudited) | ||||||||
|
ASSETS
|
||||||||
|
Current assets
|
||||||||
|
Cash and cash equivalents
|
$ | 83,797 | $ | 56,797 | ||||
|
Inventories
|
46,542 | 52,051 | ||||||
|
Other current assets
|
12,393 | 8,140 | ||||||
|
|
||||||||
|
Total current assets
|
142,732 | 116,988 | ||||||
|
Property and equipment, net
|
61,265 | 61,662 | ||||||
|
Intangible assets, net
|
8,525 | 8,160 | ||||||
|
Deferred income taxes and other assets
|
13,304 | 24,826 | ||||||
|
|
||||||||
|
Total assets
|
$ | 225,826 | $ | 211,636 | ||||
|
|
||||||||
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
|
Current liabilities
|
||||||||
|
Accounts payable
|
$ | 3,073 | $ | 5,269 | ||||
|
Other current liabilities
|
32,195 | 37,933 | ||||||
|
Income taxes payable
|
— | 2,133 | ||||||
|
|
||||||||
|
Total current liabilities
|
35,268 | 45,335 | ||||||
|
Deferred income taxes and other
non-current liabilities
|
13,479 | 11,459 | ||||||
|
Stockholders’ equity
|
177,079 | 154,842 | ||||||
|
|
||||||||
|
Total liabilities and stockholders’ equity
|
$ | 225,826 | $ | 211,636 | ||||
|
|
||||||||
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lululemon athletica inc.
Condensed Consolidated Statements of Cash Flows
Expressed in thousands
(Unaudited)
Condensed Consolidated Statements of Cash Flows
Expressed in thousands
(Unaudited)
| Twenty-six | Twenty-six | |||||||
| Weeks Ended | Weeks Ended | |||||||
| August 2, 2009 | August 3, 2008 | |||||||
|
Cash flows from operating activities
|
||||||||
|
Net income from continuing operations
|
$ | 15,762 | $ | 20,810 | ||||
|
Items not affecting cash
|
12,885 | 5,876 | ||||||
|
Other, including net changes in other
non-cash balances
|
482 | (15,544 | ) | |||||
|
|
||||||||
|
Net cash provided by operating activities
|
29,129 | 11,142 | ||||||
|
Net cash used by investing activities
|
(6,303 | ) | (22,081 | ) | ||||
|
Net cash provided by financing activities
|
171 | 2,994 | ||||||
|
Effect of exchange rate changes on cash
|
4,003 | (865 | ) | |||||
|
|
||||||||
|
Increase (decrease) in cash and cash
equivalents from continuing operations
|
27,000 | (8,810 | ) | |||||
|
Cash and cash equivalents from
continuing operations, beginning of
period
|
56,797 | 52,545 | ||||||
|
|
||||||||
|
Cash and cash equivalents from
continuing operations, end of period
|
$ | 83,797 | $ | 43,735 | ||||
|
|
||||||||
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lululemon athletica inc.
Reconciliation of Non-GAAP Financial Measure
Constant-dollar changes
Reconciliation of Non-GAAP Financial Measure
Constant-dollar changes
| Thirteen Weeks Ended | Thirteen Weeks Ended | |||||||
| August 2, 2009 | August 3, 2008 | |||||||
| % Change | % Change | |||||||
|
Comparable-store sales (GAAP)
|
(10 | )% | 18 | % | ||||
|
Increase (decrease) due to
foreign exchange rate
changes
|
8 | % | (5 | )% | ||||
|
|
||||||||
|
Comparable-store sales in
constant dollars
|
(2 | )% | 13 | % | ||||
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