Lululemon's Q4 sales jump, aims to double revenues by 2026

Lululemon Athletica Inc. reported fourth quarter net revenue increased 30 percent to 2.8 billion dollars or increased 33 percent on a constant dollar basis.

For fiscal 2022, the company’s net revenue increased 30 percent to 8.1 billion dollars or increased 32 percent on a constant dollar basis.

The company said in a statement that its Power of Three x2 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.

Commenting on the financial results, Calvin McDonald, the company’s chief executive officer, said: "In the fourth quarter and full year 2022, we delivered strong results across the business driven by our innovative products, powerful guest experiences, and strategic market expansion. As we enter 2023, we look forward to another year of strong momentum across the globe and delivering on our Power of Three ×2 growth plan."

Lululemon reports strong Q4 results

The company’s net revenue increased 29 percent in North America and increased 35 percent internationally. Total comparable sales increased 27 percent or 30 percent on a constant dollar basis, while comparable store sales increased 15 percent or 17 percent on a constant dollar basis.

The company said, direct to consumer net revenue increased 37 percent or 39 percent on a constant dollar basis and represented 52 percent of total net revenue compared to 49 percent for the fourth quarter of 2021.

Fourth quarter gross margin decreased 300 basis points to 55.1 percent and adjusted gross margin decreased 70 basis points to 57.4 percent. Operating margin decreased to 11.3 percent from 27.7 percent in the fourth quarter of 2021, while adjusted operating margin increased 50 basis points to 28.3 percent.

The company added that diluted earnings per share were 94 cents compared to 3.36 dollars in the fourth quarter of 2021 and adjusted diluted earnings per share were 4.40 dollars compared to 3.37 dollars in the fourth quarter of 2021.

Lululemon opened 32 net new company-operated stores during the quarter, ending with 655 stores.

Lululemon’s FY22 revenues increase by 30 percent

Company operated store net revenue increased 29 percent in 2022. Net revenue increased 29 percent in North America and increased 35 percent internationally. Total comparable sales increased 25 percent or 28 percent on a constant dollar basis.

Comparable store sales increased 16 percent or 19 percent on a constant dollar basis, while direct to consumer net revenue increased 33 percent or 35 percent on a constant dollar basis and represented 46 percent of total net revenue compared to 44 percent for 2021.

Gross margin decreased 230 basis points to 55.4 percent, while adjusted gross margin decreased 150 basis points to 56.2 percent. Operating margin decreased to 16.4 percent from 21.3 percent in 2021 and adjusted operating margin increased 10 basis points to 22.1 percent.

Diluted earnings per share were 6.68 dollars compared to 7.49 dollars in 2021 and adjusted diluted earnings per share were 10.07 dollars compared to 7.79 dollars in 2021.

The company opened 81 net new company-operated stores during the year, ending with 655 stores.

Lululemon expects 15 percent revenue growth in fiscal 2023

For the first quarter of fiscal 2023, the company expects net revenue to be in the range of 1.890 billion dollars to 1.930 billion dollars, representing growth of approximately 18 percent.

Diluted earnings per share are expected to be in the range of 1.93 dollars to 2 dollars for the quarter.

For fiscal 2023, the company expects net revenue to be in the range of 9.300 billion dollars to 9.410 billion dollars, representing growth of approximately 15 percent.

Diluted earnings per share are expected to be in the range of 11.50 dollars to 11.72 dollars for the year.

Lululemon further said that the key pillars of the company’s Power of Three x2 plan are product innovation, guest experience, and market expansion and the growth strategy includes a plan to double men's, double direct to consumer, and quadruple international net revenue relative to 2021.