Vancouver—After “pantsgate” and several other debacles took the shine off Lululemon Athletica last year, the yoga-oriented activewear retailer today reported improved fourth quarter.
For the quarter ended Feb. 2, lululemon posted net income of $109.7 million, or 75 cents a share, compared with $109.4 million, or 75 cents, a year earlier. Analysts’ forecast was for 72 cents a share.
Reflecting ‘With Humility’
Net revenue increased 7% to $521 million, beating the analysts’ estimate for $515.1 million. Comparable store sales were down 2% on a constant currency basis.
Direct-to-consumer sales grew 25% to $97.8 million, or 18.8% of total sales.
Gross profit increased by 2% to $278.8 million, but as percentage of net revenue gross profit decreased to 53.5% from 56.5%.
Alluding to the company’s troubles a year ago with its yoga pants and comments by former chairman/founded Chip Wilson, new CEO Laurent Potdevin said, “In my first days as CEO, I have been inspired by the people at lululemon, and the passion that lies behind our product and our brand. As we move into 2014, we are reflecting on our learnings with humility, and are entirely focused on our future. 2014 is an investment year with an emphasis on strengthening our foundation, reigniting our product engine, and accelerating sustainable and controlled global expansion. lululemon’s magic has been built by creating technical beautiful product and sharing our distinct culture with our communities.”
In an updated forecast, lululemon projects first quarter earnings between 31 to 33 cents a share with sales in the range of $377 million to $382 million. Analysts’ estimate is for 38 cents a share.
For the full fiscal year, the company forecast earnings of $1.80 to $1.90 a share with net revenue in the range of $1.77 billion to $1.82 billion based on a comparable sales increase in the low to mid-single digits.
Analysts’ consensus was for $2.14 a share for 2014 full year.