Lululemon Q1 sales decline by 17 percent

Lululemon Athletica Inc., for the first quarter ended May 3, 2020 reported net revenue of 652 million dollars, a decrease of 17 percent compared to the first quarter of fiscal 2019, while on a constant dollar basis, the company’s net revenue decreased 16 percent and direct to consumer net revenue increased 68 percent or increased 70 percent on a constant dollar basis. The company said in a statement that diluted earnings per share were 22 cents compared to 74 cents in the first quarter of fiscal 2019.

Commenting on the first quarter update, Calvin McDonald, the company’s Chief Executive Officer said: “I’m proud of how Lululemon has navigated these unexpected and unprecedented times. Our strong digital business demonstrates the strength of our guest connection and the long-term opportunity to create further omni experiences going forward.”

As a result of the Covid-19 pandemic, the company added, all its stores in North America, Europe, and certain countries in Asia Pacific were closed for a significant portion of the quarter. Subsequent to May 3, 2020, the company began reopening its retail locations in these markets in line with the guidance from local authorities. As of June 10, 2020, 295 of its company-operated stores were open.

Lululemon reported gross profit for the quarter of 334.4 million dollars, a decrease of 21 percent compared to the first quarter of fiscal 2019, while gross margin was 51.3 percent, a decrease of 260 basis points.

The company ended the first quarter with 823 million dollars in cash and cash equivalents and the capacity under its committed revolving credit facility was 398.2 million dollars. The company ended the quarter with 489 stores.