Canadian Yoga Sportswear Retailer Lululemon Athletica Inc Net Profit Exceeded Expectations

Famous Canadian

Lululemon Athletica Inc recently released its financial report for the third quarter of fiscal year 2014 (ended November 2, 2014). The company's net profit exceeded expectations, partly due to cost control.

But the company's revenue outlook is not optimistic. The paralysis of some US ports and the delayed new store plan will have a negative impact on the company's sales.

It is reported that Lululemon shares rose 10% to $51.32 per share on the same day after the quarterly announcement, which is closely related to the growth of same store sales.

"Transparency" since March 2013

The adverse effects of the incident continued, and Lululemon shares have fallen by about 25% so far.

According to the Lululemon statement, because of the adverse factors such as paralysis of the west coast port, the delay in the new store plan and the continued weakening of the Canadian dollar, it will also have a negative impact on the company's fourth quarter revenue of about $15 million.

The company expects revenues to be between $570 million and $585 million in the fourth quarter.

Lululemon's management said that the shortage of equipment and the unsettled labor negotiations had paralysed some of the ports in the United States, resulting in a 7~10 day delay in the company's logistics. At the same time, the ships shipped to Vancouver usually stopped the US ports and indirectly affected the supply in Canada.

Lululemon is working on changing the shipping routes, arranging the cargo ships that have been suspended from North America to Vancouver directly, and sending goods to the United States by rail on the other hand. It is estimated that the delay time of freight pportation can be reduced to 1~3 days.

But the increase in same store sales is inspiring.

In the second half of 2014, Lululemon vigorously increased the circulation rate of products, which seems to have achieved good results in the third quarter. "

Baird Equity Research analyst Mark Altschwager said, "but the pressure on the company is still small. The new supply chain delay may affect the company's recent development to a certain extent."

The main information of the third quarter financial report is summarized as follows:

Sales grew by 10.4% to $419 million 400 thousand, but lower than expected $424 million 800 thousand.

Net profit fell to $60 million 500 thousand, or 42 cents per share net income, down 8.5% from a year earlier, but higher than analysts' expected net income of 38 cents per share.

Lululemon once dominated.

Competition is increasingly fierce.

The company had to reduce its annual sales forecast from US $1 billion 780 million to US $1 billion 800 million to US $1 billion 770 million -17.8 US $1 billion 790 million, slightly below analysts' expectations.

The total sales volume of the same store, including physical stores and online sales, remained unchanged at the constant exchange rate in the second quarter, up 3% from the same quarter in the third quarter.

Among them, sales of physical stores decreased by 3% over the same period last year, but they were offset by an increase of 27% in line sales. Online sales reached 77 million 200 thousand dollars in the quarter, accounting for 18.4% of total sales, significantly higher than that of 16.3% in the same period last year.