lululemon investor presentation 2020

For more information, visit www.lululemon.com. Thank you, Howard, and I'd like to welcome everyone to our second-quarter earnings call. are compared to the 52 weeks ended 11. Inventory grew 17% versus last year and was $790 million at the end of Q2. Hi, good afternoon. We're well-positioned within that TAM to address it in a very effective leading way. Hi, Brooke. are compared to the 13 and 52 weeks ended I just wanted to follow up on that last answer. But everything we do around human connection, science of feel that's fueling that. To make the world smarter, happier, and richer. Store Sales2, Change in Total The highlight was standout performance from the direct-to-consumer channel where robust growth in e-commerce helped Lululemon report a small profit even with stores closed. We are monitoring this closely and leaning into the agility of our supply chain, the strength of our planning and allocations team, and the powerful partnerships with our vendors to help mitigate the risks where we can. The enhancements were continuing to make to our desktop and mobile sites, which include expanding our alternative payment methods, improved storytelling, more predictive search, and more seamless checkout, all combined to continue to elevate their online guest experience. Handled customer-service . Gross profit for the second quarter were $843 million or 58.1% of net revenue, compared to 54.2% of net revenue in Q2 2020, and 55% of net revenue in Q2 2019. Youre reading a free article with opinions that may differ from The Motley Fools Premium Investing Services. And those scenarios played out. Beauty Market . lululemon encourages and creates access to voter participation in the 2020 U.S. Election. Thanks. Thanks for squeezing me in. Is it really just products coming out of that country or is it leading into the region? Tapestry Acceleration Program Infographic. Thanks, Jay. We now expect our fiscal year 2021 adjusted diluted earnings per share to be in the range of $7.38 to $7.48. The learnings from our membership test are considerable. 24. Our Q3 guidance reflects an impact of approximately 200 basis points of pressure from airfreight costs due to port congestion and capacity constraints. 0001172661-23-001474.rtf. 41. And then, secondly, for Meghan, on the second quarter comment, you called out an open-store productivity back at 2019 levels, how are you planning that for the back half? Three new styles feature innovative fabrics and construction. Fourth quarter revenue up 20% to at the end of fiscal 2018. $1.1 billion Lululemon learned some things about what customers want in a shoe from its previous partnership to sell athletic footwear from the brand Athletic Propulsion Labs (APL). The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or with greater prominence to, the financial information prepared and presented in accordance with GAAP. For example, if you decide to participate in certain interactive areas or features of our websites, such as creating a public profile and posting your goals, you consent to the disclosure of this information to other users of our websites. So maybe, Calvin, as we think about 28% revenue growth relative to 2019 in the second quarter, mid-20s in the first quarter, is there a way to rank the drivers of the outperformance that you're seeing relative to that 19% pre-pandemic? I wanted to focus on the men's business for a minute. Switching now to International, our sales trends continue to be robust with all major regions generating strong double-digit sales growth on a two-year CAGR basis. Markets, North America international, and channels online and stores. Furthermore, we do not believe the adjustments are reflective of our expectations of our future operating performance and believe these non-GAAP measures are useful to investors because of their comparability to our historical information. I'm happy to be on the call today to speak to our omni guest experience pillar, and to share some additional details on our second-quarter performance. Total comparable sales includes comparable store sales and direct to consumer sales. Adding these lifestyle features should translate to further robust growth over time. Quarter, Number of I'm proud of our recent announcements to develop advanced raw materials that will help us live into our goals and create a healthier world. The outbreak of the COVID-19 coronavirus has been declared a pandemic by the Square Feet at Thank you and good afternoon. We need to collect personal data, such as your name and e-mail address, in order to process your Promotion. 4:30 p.m. Eastern time Burgoyne becomes the first executive to serve at the President level in her role. Specialty Retail. August 4, 2020. inc. , we temporarily closed all of our retail locations in Mainland China. Thank you. We expect gross margin in Q3 to increase 50 to 100 basis points versus Q3 of 2019. At the end of Dec. 1994, Nike stock traded at a P/E of 54, not quite as high as Lululemon's current 64 P/E but still frothy. The bottom line: The opportunity cost of missing out on big gains over the long haul is too high to worry about locking in a measly 100% gain off the recent lows. Joining me today to talk about our results are Calvin McDonald, CEO; Meghan Frank, CFO; and Celeste Burgoyne, president, Americas and Global Guest Innovation. Quarterly Infographic PDF. The average price target is $469.34 with a high forecast of $548.00 and a low . I would also note that markdowns declined relative to 2019. Thank you so much. So overall, what's very exciting is the balance of growth across all international markets, meaning they are all contributing significant growth and into our goal of quadrupling our international business by '23. The next question comes from Mark Altschwager with Baird, please go ahead. Our obsession with raw material and our investment in our product is what we do, is what we obsess about, and its really what drives why the guests feel different and continue to sort of be loyal to this product and brand. 1931 0 obj <>stream Blog. This includes approximately 35 to 40 stores in our international markets and represents a square footage percentage increase in the low-teens. Thank you for standing by, this is the conference operator. We expect our adjusted effective tax rate for the year to be similar to 2020. / It's definitely a combination of both. Yeah. Quarter, Number of The Power 3 initiatives focusing on product, guest experience, and market expansion are still the key areas of focus that we will drive our innovation through. Hi, Mark. We continue to be pleased with the performance of MIRROR, and let me highlight several initiatives we have on track for this year. Lululemon offers pants, shorts, tops, and jackets for both leisure and athletic activities such as yoga and running. And the program was embraced by men at a higher rate than we were expecting. If we receive data about you in this manner, we combine that data with the personal data we collect directly from you. lululemon. Diluted EPS of $2.28 for the fourth quarter. We achieved doubling our e-commerce business last year. The appointments accelerate the companys continued focus on growth, global innovation, and diversity and inclusion. When I graduated from the Ivey Business School in 2010, I did what all my peers were doing: I got a job at an . Relative to 2019, our gross margin is benefiting from a higher e-com penetration and leverage on occupancy and depreciation. We expect adjusted earnings per share in the third quarter to be in the range of $1.33 to $1.38 versus adjusted EPS of $1.16 a year ago. If we think about the holiday environment coming, how are you thinking about maybe some opportunities that could be presented around pricing, if we are in an environment where a lot of companies are having trouble sourcing the units they need, or they would want to really fulfill the demand -- the consumer demand that's out there? On June 29, 2020, Lululemon announced its intention not to be left behind. A transcript of the meeting will be available here. Sep 2019 - Sep 2020 1 year 1 month. For the fourth quarter ended The strategy is organized into three interconnected areas of focusBe Human, Be Well, and Be Planetwith 12 goals to drive progress. We're enthusiastic about the opportunities that exist for the business. . Constant dollar changes in net revenue, total comparable sales, comparable store sales, and direct to consumer net revenue, and the adjusted financial results are non-GAAP financial measures. After many real and impactful conversations with their underrepresented employees and greater community, lululemons Senior Leadership Team made the following commitments to stand up and fund Inclusion, Diversity, Equity, and Action within the organization to support meaningful, lasting change in the world. Buy These 2 Stocks in 2023 and Hold for the Next Decade, Warren Buffett's Latest $2.9 Billion Buy Brings His Total Investment in This Stock to $66 Billion in 4 Years, If You Invested $1,000 in Nvidia in 1999, Here's the Shocking Amount You Would Have Now, Join Over Half a Million Premium Members And Get More In-Depth Stock Guidance and Research, Copyright, Trademark and Patent Information. February 2020 I also want to give some context around these numbers and the quarter-after-the quarter performance we've been delivering. The right to file a complaint:You have the right to file a complaint regarding our data protection practices with a supervisory authority. I think everybody is saying I think it's now 150 to 200 basis points of negative impact for the year. Oct 07, 2021. As of January 30, 2022, it operated 574 company-operated stores under the lululemon brand in the United States, Canada, the People's Republic of China, Australia, the United Kingdom, Japan, New Zealand, Germany, South Korea, Singapore, France, Malaysia, Sweden, Ireland, the Netherlands, Norway, and Switzerland. Congrats again. And the impact that COVID has had on TAM plays to the strengths and plays to our growth story and the opportunity that we see ahead for our brand. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services. One million four hundred sixty thousand three hundred eighty subordinate voting shares were repurchased between January 17 and July 6 . On a two-year CAGR basis, total revenue increased 28% with North America up 26% and International increasing 43%. About Us. *Average returns of all recommendations since inception. Consider that in fiscal 1994, Nikesales declined 3.6% to $3.79 billion. E-com contributed $597 million of top-line or 41% of total revenue. During the The presentations will be broadcast live over the internet beginning at 9:00 AM ET and can be accessed on the investor relations section of Company's website, www.lululemon.com. Welcome to Lululemon's second-quarter earnings conference call. [Operator instructions] And now, I'd like to turn the call over to Cal. Description. Meghan will have more to share regarding inventory and costs in a few moments. or Vancouver yoga-togs merchant Lululemon . 1. Events & Presentations: Quarterly Reports: Annual Reports: SEC Filings: End of Day Stock Quote: Unsubscribe . North America In this case, we will ask for your specific consent. The adjustments relate to the amounts recognized in connection with . How should we think about this in terms of recovery? 10% WELCOME OFFER: Fair Processing Notice. 5. There will be some -- likely some puts and ticks in the margin as we move forward, and we do remain committed to the margin target that was in our Power 3 growth plan of modest expansion annually. lululemon released its first-ever Impact Agenda detailing the companys long-term strategy to become a more sustainable and equitable business, minimize its environmental impact, and accelerate positive change both internally and externally. Lululemon had a high guest retention rate of 92% among its top 20% of spenders. Thank you. Unless otherwise required by applicable law, lululemon will take reasonable steps to destroy or permanently de-identify personal data it holds if such personal data is no longer needed for the purpose for which it was collected. Unaudited; Expressed in thousands, except per share amounts, Constant dollar changes in net revenue, total comparable sales, comparable store sales, and direct to consumer net revenue. lululemon.com. Total comparable sales increased 17%, or increased 18% on a constant dollar basis. But if it does, then Lululemon has a good shot at approaching $13 billion in annual revenue by 2026, compared to just $3.3 billion in 2018 and $6.3 billion in 2021. The underlying demand for our brand is strong. And from that, some of the behaviors that we were able to observe was how it drove brand love, their connection to the community, both the brand as well as to each other, which is really important. And when I look at the growth, it is balanced across all the categories, which is very healthy. We recently opened our second production studio in New York, allowing us to double the number of live classes, and MIRROR will launch a new e-commerce site in time for the holiday season this year. Last October, we launched our Impact agenda, which outlines our strategies to address critical social environmental issues over a multi-year period. And it has just continued to gain momentum through each quarter and then with Q2 being sort of back at that great growth where we're going to double our business at the end of this year, two years early from when we started at the beginning of 2019. Driven out of the innovation of the product, we're well aware of the inputs of inflation and costs and have that in our guidance that Meghan has provided. The next question comes from Lorraine Hutchinson with Bank of America. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. inc. Our focus on technical athletic apparel allows us to benefit from trends in consumer behavior that are becoming more important year after year, and our inventory, which leverages many key core styles with less seasonality, helps us navigate and mitigate disruptions within the supply chain. With this strategy firmly in place, we've introduced fabrics and products that engineer specific on-body sensations. Our supply chain and product teams are working diligently to mitigate these risks by shifting production out of Vietnam where possible with our vendors who operate in multiple countries, prioritizing production to ensure key fall holiday styles are produced first, and strategically increasing our use of airfreight. Listen to Webcast. So I would not factor in any marginal impact, and our goals speak for themselves. , Third, even with the recovery in our stores, our e-commerce business remains solid. I was just curious where you've seen success, and then what you're excited about for the back half and into next year a bit leaning. Thanks, Ike. We continue to expect to open 45 to 55 net new company-operated stores in 2021. And just as you look forward, could you just talk about if you see any of the current issues leading into spring? For more information on these non-GAAP financial measures, please see the section captioned "Reconciliation of Non-GAAP Financial Measures" included in the accompanying financial tables, which includes more detail on the GAAP financial measure that is most directly comparable to each non-GAAP financial measure, and the related reconciliations between these financial measures. As you know, we also see continued growth opportunities within North America. Investors expected lululemon athletica (LULU 1.66%) to deliver a large increase in revenue over the year-ago weakness, . To learn more see our privacy policy. We will be competitive to attract new members and we will continue to take a measured and responsible approach to the business. And, Calvin, just a quick follow-up, can you expand a little bit on the plans for membership? , and we temporarily closed our distribution center in Some examples include digital sweat classes and community events were top drivers of overall program engagement. Unsubscribe at anytime. VANCOUVER, British Columbia -- (BUSINESS WIRE)-- lululemon athletica inc. (NASDAQ:LULU) today announced financial results for the fourth quarter and fiscal year ended . at the While this level of inventory can support our increased revenue guidance I'm going to walk through in a moment, it is lower than we had initially targeted due to supply chain challenges. June 24, 2020 . These results reflect the ongoing strength across all major areas of the business. McDonald sees Lululemon's market opportunity stretching way beyond the sports apparel market, which is big enough on its own at $115 billion, according to Euromonitor. Our activation pairs our ambassadors with fitness instructors from the local community to lead over 140 complimentary fitness classes. Great, thanks. SG&A expenses were $541 million or 37.3% of net revenue, compared to 39.1% of net revenue in Q2 2020 and 36% of net revenue in Q2 2019. A constant dollar basis assumes the average foreign exchange rates for the period remained constant with the average foreign exchange rates for the same period of the prior year. 1-604-732-6124 Hi. Luxury Goods. Lululemon operates in a competitive industry, but it's certainly expanding like it wants to be the next Nike. We may disclose your personal data to our holding company, subsidiaries and affiliates, including lululemon athletica inc., lululemon usa inc. and lululemon athletica canada inc., for the purposes described above. I will also discuss specifics on our balance sheet, including our cash position, liquidity, and inventory. At the end of Q3, we expect inventory levels to increase approximately 15% to 20% relative to Q3 2020. lululemon reserves the right to change this Privacy Policy from time to time. Lululemon is starting to tap the $3 trillion global wellness market. ~^C`llhH5vY]-#~0 b These learnings were integral to our decision to complete the MIRROR acquisition, and hold true today. Our Unique Proposition. WACC . We had approximately $1.2 billion in cash and cash equivalents and nearly $400 million of available capacity under our revolving credit facility. If reasonably necessary or required to meet legal or regulatory requirements, resolve disputes, prevent fraud and abuse, or enforce our terms and conditions, lululemon may also keep personal data as required, after an account is closed or is no longer necessary to provide services. Please note that our websites and communications may contain links to third-party websites that are not controlled or operated by lululemon. For more information and to view the 2020 Impact Agenda, click here. So I think the -- I know the TAM has been impacted by those macro trends. HTTPS://AWS.AMAZON.COM/ABOUT-AWS/GLOBAL-INFRASTRUCTURE/). lululemon athletica Lululemon saw encouraging demand for its core products, in addition to its launches in new lines like menswear and outerwear. Thank you, Meghan and Celeste. $404.8 million Exciting, thanks. The next question comes from Ike Boruchow with Wells Fargo. Thank you, Calvin. Productivity in stores returned to 2019 levels, representing continued improvement versus 88% productivity we realized in Q1 of this year. And then Calvin, on international, when we gathered to the analyst's day and you gave us the initial guidance of quadrupling revenues by 2023, I think the comment was that international is going to reach breakeven in 2018 and would be 10 to 15% of earnings by 2023. View source version on businesswire.com: https://www.businesswire.com/news/home/20200326005653/en/, Investors: We are, as I mentioned, managing accordingly. Fantastic. The below changes in net revenue show the net change for fiscal 2019 compared to fiscal 2018. Q2 2023 Tapestry, Inc. Investor Presentation. By Q.ai . So I think that embedded about 1,000 to 1,500 basis points of margin expansion in international. And in terms of breakeven, we haven't put a fine point on that, but we are focused as Calvin mentioned, unrolling and initiatives for 2021, including store ramps, Canada entry, and e-commerce, let's say, rebound. Does it kind of push it out a little bit more? In our store channel, sales increased 9% on a two-year CAGR basis, above our expectations of approximately flat. A few more details related to these results: in 2020, we achieved our goal to double our e-commerce business. Good afternoon. inc. (NASDAQ:LULU) today announced financial results for the fourth quarter and fiscal year ended We want to be by 2030, 100% of our products made with sustainable materials, and that's what these partnerships are gearing and working toward for us. During the quarter, we opened 11 net new stores. If you have any questions about the security of personal data collected by lululemon contact us HERE. Overview Investor presentations and pitch decks by companies in Consumer Cyclical sector Filter. . How's the margin profile of the sustainable product look versus the current assortment? This was never more true than last year during the pandemic. Diluted EPS of , as our teams executed against our Power of Three growth plan. Great results. And we achieved these results based upon our performance before, during, and as we emerge from COVID-19.