lululemon athletica inc. Reports Operating Results (10-Q)

lululemon athletica inc. (LULU, Financial) filed Quarterly Report for the period ended 2009-05-03.

LULULEMON ATHLETICA 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 They believes that their world will be a better place. Setting the bar in technical fabrics and functional designs They works with yogis and athletes in local communities for continuous research and product feedback. lululemon athletica inc. has a market cap of $771 million; its shares were traded at around $15.22 with a P/E ratio of 24.2 and P/S ratio of 2.2.

Highlight of Business Operations:

Our net revenue has grown from $40.7 million in fiscal 2004 to $353.5 million in fiscal 2008. This represents a compound annual growth rate of 72%. Our increase in net revenue from fiscal 2004 to fiscal 2008 resulted from the addition of retail locations in North America, including 34 net openings in fiscal 2008 and 31 net openings in fiscal 2007, and comparable store sales growth as high as 34%, which we realized in fiscal 2007. Our net revenue from continuing operations also increased from $77.0 million in the first quarter of fiscal 2008 to $81.7 million in the first quarter of fiscal 2009, representing a 6% increase. Our ability to open new stores and grow sales in existing stores has been driven by increasing demand for our technical athletic apparel and a growing recognition of the lululemon athletica brand. We believe our superior products, strategic store locations, inviting store environment, grassroots marketing approach and distinctive corporate culture are responsible for our strong financial performance.

Net revenue increased $4.7 million, or 6%, to $81.7 million for the first quarter of fiscal 2009 from $77.0 million for the first quarter of fiscal 2008. This increase was the result of sales from new stores opened. Assuming the average exchange rate between the Canadian and United States dollars for the first quarter of fiscal 2008 remained constant, our net revenue would have increased $15.6 million, or 20%, for the first quarter of fiscal 2009.

Corporate-Owned Stores. Net revenue from our corporate-owned stores segment increased $3.6 million, or 5%, to $72.9 million for the first quarter of fiscal 2009 from $69.4 million for the first quarter of fiscal 2008. The following contributed to the $3.6 million increase in net revenue from our corporate-owned stores segment:

Other. Net revenue from our other segment increased $2.9 million, or 94%, to $6.1 million for the first quarter of fiscal 2009 from $3.1 million for the first quarter of fiscal 2008. The $2.9 million increase was primarily the result of increased outlet sales, wholesale and showroom sales, and the launch of e-commerce in the first quarter of fiscal 2009.

Selling, general and administrative expenses decreased $4.1 million, or 14%, to $25.1 million for the first quarter of fiscal 2009 from $29.2 million for the first quarter of fiscal 2008. As a percentage of net revenue, selling, general and administrative expenses decreased 7.1%, to 30.7% from 37.9%. The $4.1 million decrease in selling, general and administrative expenses was principally comprised of:

Net income decreased $2.0 million to $6.5 million for the first quarter of fiscal 2009 from $8.5 million for the first quarter of fiscal 2008. The decrease in net income of $2.0 million for the first quarter of fiscal 2009 was a result of a decrease in gross profit of $6.2 million resulting from increased product costs and fixed costs, such as occupancy, and a decrease in other income (expense), net of $0.2 million, offset by decreases in selling, general and administrative expenses of $4.1 million and a decrease of $0.3 million in provision for income taxes.

Read the The complete ReportLULU is in the portfolios of Richard Perry of Perry Capital.