Lululemon Q1 sales fall 17% amid dark stores

Strong online sales couldn’t make up for the loss of brick-and-revenue in Lululemon Athletica’s first quarter as its stores were closed for a good part of the quarter due to the pandemic.

The retailer reported that its net income dropped to $28.6 million, or $0.22 a share, for the quarter ended May 3, compared with $96.6 million, or $.74 a share, a year ago. 

Net revenue fell 17% to $652.0 million.  Direct to consumer net revenue increased 68%, making up 54.0% of total net revenue compared to 26.8% for the first quarter of last year.

“We are learning more every day about our guests -- how they enjoy interacting with us online and what makes them comfortable as stores reopen." Calvin McDonald, CEO. "Our strong digital business demonstrates the strength of our guest connection and the long-term opportunity to create further Omni experiences going forward."

As of June 10, 2020, 295 of Lululemon’s 489 company-operated stores were open. The company’s and distribution centers are operating with precautionary measures in place such as reduced operating hours, physical distancing, enhanced cleaning and sanitation, and maximum occupancy levels.

Lululemon said it believes that it has sufficient cash and cash equivalents, and available capacity under its revolving credit facilities, to meet its liquidity needs. As of May 3, 2020, the company had cash and cash equivalents of $823.0 million and the capacity under its committed revolving credit facility was $398.2 million.