Lululemon Athletica reported a strong first quarter as shoppers returned to its stores and its online business continued to grow.
On the company's earnings call, CEO Calvin McDonald said Lululemon is planning to open 45 to 55 stores in fiscal year 2021, taking advantage of reduced occupancy rates.
“We are committed to stores and building more and more stores this year,” McDonald said,
The specialty athletic apparel retailer’s net revenue increased 88% to $1.2 billion for the quarter ended May 2 compared to the year-ago period. Compared to the first quarter of 201, net revenue increased by $444.2 million, or 57%, representing a two-year compound annual growth rate of 25%.
Direct to consumer net revenue increased 55% to $545.1 million and represented 44.4% of total net revenue compared to 54.0% for the first quarter of 2020.
Net revenue increased 82% in North America and increased 125% internationally.
Net income grew to $145 million, or $1.11 per share, from $28.6 million, or $0.22 per share last year. Adjusted earnings came in at $1.16 a share, easily topping the $0.91 per shares that analysts estimated, compared to $0.23 in the first quarter of 2020.
“Our first-quarter results reflected strength across all drivers of growth, fueled by the continued expansion in our e-commerce business and a rebound in brick-and-mortar stores,” said Calvin McDonald, CEO. “Our strong performance across categories, channels and geographies demonstrates the momentum and strength of lululemon as we shift into the new normal.”
For the second quarter of 2021, Lululemon expects net revenue to be in the range of $1.300 billion to $1.330 billion. Diluted earnings per share are expected to be in the range of $1.05 to $1.10 for the quarter and adjusted diluted earnings per share are expected to be in the range of $1.10 to $1.15.
For 2021, the company expects net revenue to be in the range of $5.825 billion to $5.905 billion. Diluted earnings per share are expected to be in the range of $6.52 to $6.65 for the year and adjusted diluted earnings per share are expected to be in the range of $6.73 to $6.86.
“We are very pleased with our Q1 results, which reflect significant growth in the business compared to both 2020 and 2019,” said Meghan Frank, CFO. “Our momentum remains strong as we enter the second quarter, and we are raising our estimates for the year accordingly.”
The company opened two net new company-operated stores during the quarter, ending with 523 stores.