Lululemon tops analysts’ estimates for earnings and revenue in the fourth quarter

Lululemon
(NASDAQ:LULU) announced its quarterly performance results on Thursday that beat
analysts’ estimates for earnings and revenue in the fourth quarter. The athletic
apparel retailer highlighted a significant
increase in its same-store sales and attributed the success to an upbeat
performance from its men’s section.

Owing
to the rising uncertainty associated with the Coronavirus pandemic, the company
refrained from giving financial guidance for 2020. Lululemon was reported
trading 2% down in the stock market in extended trading on Thursday.

Lululemon’s
Financial Results Versus Analysts’ Estimate

According
to Refinitiv, analysts had expected the retailer to print £1.13 billion in
revenue in the fourth quarter. Their estimate for earnings per share was capped
at £1.83 per share. In its financial report on Thursday, Lululemon boasted a
higher revenue of £1.14 billion in the recent quarter and made £1.86 of
earnings per share in Q4. Lululemon posted a 20% increase in its revenue as
compared to the fourth quarter of the previous year.

At
£243 million, Lululemon’s net income was recorded significantly higher than £178.20
million in the same quarter last year. In terms of same-store sales, the
company noted a 20% growth in the fourth quarter. Lululemon’s digital sales saw
a massive 41% increase in the recent quarter.

On
the revenue front, the retailer’s men’s section printed a 32% increase while a
smaller 17% growth was seen in the women’s section in Q4.

According
to Lululemon’s Chief Executive Officer, Calvin McDonald:

“The
strength of our brand and strong financial position will help us manage through
the day-to-day, while continuing to effectively plan for and invest in our
future.”

Lululemon
Recently Closed Its Retail Stores In Multiple Locations

In response to the fast-spread of COVID-19, Lululemon had closed all of its retail stores in China in February. All these stores except one have now resumed operations.

Lululemon applied the same strategy in March as it closed all of its stores in multiple locations across the world including Europe, North America, New Zealand, and Malaysia. Its distribution center in Washington was also recently shut down to protect the workers against the health hazard.

At the time of writing, Lululemon is exchanging hands at £157.0 per share in the stock market that translates to an over 15% decline in 2020 so far. Its performance in 2019, on the contrary, was widely upbeat with an annual increase of over 100%.

Lululemon currently has a market cap of £20.45 billion with a price to earnings ratio of 44.70.