Canadian apparel brand Lululemon's Q3 revenue rises 30% to $1.5 bn

Though headquartered in Canada, Lululemon provides its financial results in US dollars.

The reporting quarter’s comparable sales rose 27 per cent with comparable store sales escalated by 32 per cent over the same quarter of prior year. The gross income of Q3 FY2021 increased 32 per cent to $829.4 million while gross margin increased 110 basis points to 57.2 per cent compared to the previous year’s corresponding quarter.

The income from operations of the company also increased 26 per cent to $257.9 million with adjusted income from operations increasing 32 per cent to $282.1 million in the third quarter of 2021, over the same period of 2020.

"Our third quarter results demonstrate the ongoing strength of Lululemon and the tremendous growth potential of the business in both the near- and long-term. We are pleased with our early holiday season performance and how the Lululemon brand continues to resonate in markets around the world. We are energised by the exciting opportunities ahead, and I'm proud of our teams across the globe for their passion and agility – I want to thank everyone for delivering a strong quarter," Calvin McDonald, chief executive officer of the company, said in a press release.

The company’s diluted earnings per share were $1.44 compared to $1.10 in the third quarter of 2020, while the adjusted diluted earnings per share were $1.62 compared to $1.16 in the third quarter of 2020.

Lululemon ended the third quarter of 2021 with $1.0 billion in cash and cash equivalents and the capacity under its committed revolving credit facility was $396.9 million. The inventories at the end of the third quarter of 2021 also increased 22 per cent to $943.9 million compared to $771.0 million at the end of the third quarter of 2020.

During the quarter, the company repurchased 0.6 million shares of its own common stock at an average price of $405.87 per share for a total cost of $236.4 million and opened 18 net new company-operated stores, ending with 552 stores in total.

In its outlook, the company mentioned that it expects net revenue to be in the range of $2.125 billion to $2.165 billion in the fourth quarter of 2021 while the diluted earnings per share to be in the range of $3.24 to $3.31 and adjusted diluted earnings per share expected to be in the range of $3.25 to $3.32 for the quarter.

For full year 2021, it expects net revenue to be in the range of $6.250 billion to $6.290 billion, diluted earnings per share to be in the range of $7.38 to $7.45 and adjusted diluted earnings per share to be in the range of $7.69 to $7.76.

ALCHEMPro News Desk (DD)