Lululemon (LULU) stories Q1 2021 earnings

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Pedestrians wearing protective masks walk past a Lululemon store in San Francisco, California on Monday, March 29, 2021.

David Paul Morris | Bloomberg | Getty Images

According to Lululemon Athletica, fiscal first quarter revenue rose 88% on Thursday, beating analysts’ estimates as buyer traffic in its stores steadily increased.

The sportswear maker also gave a strong forecast for the second fiscal quarter and raised its estimates for the full year as momentum for its brand builds across all regions.

The stock rose less than 1% on the news in extended trading.

Here’s how Lululemon performed in the reporting period ending May 2, compared to analyst expectations based on a refinitive survey:

  • Earnings per share: adjusted 1.16 US dollars vs. 91 cents expected
  • Revenue: $ 1.23 billion versus an expected $ 1.13 billion

Net income rose to $ 145 million, or $ 1.11 per share, from $ 28.6 million, or 22 cents per share, last year. With no one-time fees, Lululemon made $ 1.16 per share, better than analysts’ estimate of 91 cents per share.

Revenue rose to $ 1.23 billion from $ 652 million a year ago when stores were temporarily closed. That was above expectations of $ 1.13 billion.

On a two-year basis, sales increased 57%. Lululemon also said the men’s business grew faster than the women’s business compared to 2019.

The Covid pandemic has fueled buyer demand for all-home fitness equipment and home workouts like running and spinning biking. The trend, which didn’t seem to slow down, benefited companies like Lululemon, Nike, and Under Armor. It has also boosted more traditional retailers like Gap, who recently said activewear sales are continuing to boost sales at both the Athleta and Old Navy banners.

Lululemon’s direct-to-consumer sales rose 55% year over year to $ 545.1 million. Sales in North America increased 82% and international sales increased 125%.

CEO Calvin McDonald told analysts on Thursday that Lululemon still believes that its international business will grow on a par with its North American operations in the near future. At the end of 2020, international sales represented only 14% of Lululemon’s total business.

The company also owns the home fitness platform Mirror, a rival to Peloton. Lululemon expects Mirror to have sales of $ 250 million to $ 275 million this year.

CFO Meghan Frank said the momentum has remained strong over the past few weeks. The company continues to invest in innovative merchandise to generate excitement. The company recently launched a line of products that use low-impact dyes and is conducting a trade-in and resale pilot.

For the second fiscal quarter, Lululemon expects adjusted earnings per share in a range of 1.10 to 1.15 US dollars on sales of 1.3 to 1.33 billion US dollars. According to a Refinitiv poll, analysts had expected earnings of $ 1.01 per share on sales of $ 1.20 billion.

For the year, adjusted earnings are expected to be $ 6.73 to $ 6.86 per share on revenue of $ 5.83 to $ 5.91 billion. Analysts had expected earnings of $ 6.48 per share on sales of $ 5.68 billion.

Previously, Lululemon had claimed revenue of $ 5.55 billion to $ 5.65 billion for fiscal 2021.

“We performed well before the pandemic, I think we led the peer group during the pandemic, and we’re excited about … our ability to continue to perform well after the pandemic,” said McDonald.

Lululemon stocks are down about 9% since the start of the year. It has a market capitalization of $ 41.4 billion.

Find the full press release on Lululemon’s results here.

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