Lululemon CEO: recent momentum is ‘only building’

Lululemon Athletica Inc (NASDAQ: LULU) reported market-beating quarterly results on Thursday as eCommerce remained strong and store traffic improved in recent months. Lululemon shares opened around 1.5% up in the stock market on Friday.

Lululemon’s Q1 financial results

Lululemon said its net earnings in the fiscal first quarter printed at $145 million (£102.25 million) that translates to $1.11 per share. In the same quarter last year, its earnings were capped at $28.6 million or 22 cents per share.

Are you looking for fast-news, hot-tips and market analysis?

Sign-up for the Invezz newsletter, today.

Adjusted for non-recurring items, the apparel company earned $1.16 per share versus the year-ago figure of 23 cents per share. Lululemon generated $1.23 billion of sales in Q1, or 88% higher than last year. According to FactSet, experts had forecast the company to post $1.13 billion of sales and 91 cents of adjusted EPS.

For the full financial year, Lululemon expects up to $5.905 billion of sales and $6.73 to $6.86 of adjusted per-share earnings. The Vancouver-headquartered company’s direct sales climbed by almost 100% in the prior quarter (Q4).

CEO Calvin McDonald’s remarks on CNBC’s “Closing Bell”

Commenting on the Q1 earnings report, CEO Calvin McDonald said on CNBC’s “Closing Bell”:

“We’re seeing that athleisure, activewear, living a healthy lifestyle is a trend that’s sustaining. The momentum is only building, and our results indicate a consumer that has adopted new principles around living a healthy lifestyle and wanting versatile apparel. We’re well-positioned to provide that.”

Lululemon’s eCommerce segment was up 50% in the first quarter. According to the chief executive, store performance is also recovering quickly as the COVID-19 restrictions continue to ease and currently stand at 88% of the productivity levels seen in 2019 (pre-pandemic).

McDonald expressed confidence that at-home fitness, a trend that accelerated amidst the Coronavirus crisis, will continue even after the restrictions are lifted. Commenting on “MIRROR”, he said:

“We see MIRROR being able to have a solid standalone PnL. It strengthens our community, relationships with our guests, and how they want to sweat, and we know they sweat more, they buy more. So, we see the relationship with our apparel sales. We’ve got it to $250 to $275 million in revenue this year; that’s a 55% to 65% year over year growth. The business is young, we’re only starting with the synergies. We’ll be in 90 stores at the end of this month with a plan of 200 by the end of the year.”