Sustained workout wear demand drives Lululemon's upbeat 2021 forecasts

This Monday, June 5, 2017, photo, shows a Lululemon Athletica logo outside a store on Newbury Street in Boston. THE CANADIAN PRESS/AP/Steven Senne)

Lululemon Athletica Inc.'s revenue soared by 88 per cent in its latest quarter fuelled by an ongoing e-commerce expansion and a rebound in brick-and-mortar store sales, the company said Thursday.

The Vancouver-based maker of athletic and yoga wear said its revenue amounted to $1.2 billion in its first quarter, up from $652 million the year prior.

The retailer's strong performance came as it continued to navigate operating challenges related to the pandemic, including ongoing store closures, capacity constraints, supply chain challenges with ports and reduced air freight capacity, CEO Calvin McDonald told analysts during a conference call to discuss results.

"While challenges of all types will no doubt remain going forward, I'm confident that we will continue to manage them effectively and deliver outstanding results," he said. "We are well positioned for the post-pandemic world and the opportunities ahead of us are significant and continue to expand."

Many of Lululemon's stores were closed for a significant portion of its first quarter last year. It shuttered all its stores in China in February 2020, followed by all stores in North America, Europe and some Asia Pacific countries in March to help curb the spread of COVID-19.

The widespread store closures dragged down the retailer's revenue and profit in its first quarter of 2020, making the most recent quarter's revenues particularly impressive in comparison.

Even still, the company's revenue in its most recent quarter was more than 56 per cent higher than the $782 million the company reported in 2019, suggesting the strong results are about more than just a rebound as the economy recovers from the pandemic.

Meanwhile, the retailer recorded a net income of almost $145 million for the period ended May 2, up from $28.6 million in 2020 and $96.6 million in 2019. Its diluted earnings per share reached $1.11, compared with 22 cents in the first quarter of 2020 and 74 cents in 2019.

Lululemon said its company-operated stores recorded an increase in net revenue of 106 per cent to $536.6 million in its first quarter, while direct to consumer net revenue increased 55 per cent to $545.1 million.

Broken down by region, the company said its net revenue climbed 82 per cent in North America in its last quarter, while rising a meteoric 125 per cent internationally.

The strong results pushed up expectations for Lululemon's upcoming quarter, chief financial officer Meghan Frank said.

"Our momentum remains strong as we enter the second quarter, and we are raising our estimates for the year accordingly," she said in a statement.

This report by The Canadian Press was first published June 3, 2021.