Lululemon Athletica reported a third quarter revenue increase of 19 percent to 2.2 billion dollars with net revenue increase of 12 percent in North America and 49 percent internationally.
Comparable sales for the quarter increased 13 percent or 14 percent on a constant dollar basis and comparable store sales increased 9 percent.
Commenting on the third quarter trading, Calvin McDonald, the company’s chief executive officer, stated: “This was another strong quarter for Lululemon as our innovative product offerings and community activations continued to powerfully resonate with our guests globally. As we enter the holiday season, we are pleased with our early performance and are well-positioned to deliver for our guests in the fourth quarter.”
Highlights of Lululemon’s Q3 results
The company’s direct to consumer net revenue increased 18 percent or 19 percent on a constant dollar basis and represented 41 percent of total net revenue.
Gross profit increased 21 percent to 1.3 billion dollars, while adjusted gross profit increased 23 percent to 1.3 billion dollars. Gross margin increased 110 basis points to 57 percent and adjusted gross margin increased 220 basis points to 58.1 percent.
Operating margin decreased 370 basis points to 15.3 percent, while adjusted operating margin increased 80 basis points to 19.8 percent.
Diluted earnings per share decreased to 1.96 dollars in the third quarter and adjusted diluted earnings per share were 2.53 dollars.
Lululemon opened 14 net new company-operated stores during the third quarter, ending with 686 stores.
Lululemon forecasts 18 percent revenue growth for FY23
For the fourth quarter, the company expects net revenue to be in the range of 3.135 billion dollars to 3.170 billion dollars, representing growth of 13 percent to 14 percent and diluted earnings per share are expected to be in the range of 4.85 dollars to 4.93 dollars.
For 2023, the company expects net revenue to be in the range of 9.549 billion dollars to 9.584 billion dollars, representing growth of 18 percent, while diluted earnings per share are expected to be in the range of 11.77 dollars to 11.85 dollars and adjusted diluted earnings per share in the range of 12.34 dollars to 12.42 dollars.
The company’s Power of Three ×2 growth plan calls for a doubling of the business from 2021 net revenue of 6.25 billion dollars to 12.5 billion dollars by 2026. The growth strategy includes a plan to double men’s, double direct to consumer, and quadruple international net revenue relative to 2021.
