Lululemon Jumps 11% After Fiscal Q2 2022 Financials Beat Estimates

Lululemon Athletica Inc. (Nasdaq: LULU) reported on Thursday its financial results for fiscal Q2 2022 ended July 31, 2022, highlighting a quarterly revenue of US$1.87 billion. This beats the consensus estimate of US$1.73 billion and is an increase from both Q1 2022’s US$1.61 billion and Q2 2021’s US$1.45 billion.

The firm also exceeded the quarterly revenue guidance of US$1.75 – US$1.775 billion announced last quarter.

“The momentum in our business continued in the second quarter, fueled by strong guest response to our product innovations, community activations, and omni experience,” said CEO Calvin McDonald.

While the quarterly gross margin increased to 56.5% from last quarter’s 53.9%, it’s a decline from last year’s 58.1%. The firm also ended with a stronger net income at US$289.5 million compared to last quarter’s US$190.0 million and last year’s US$208.1 million. The bottomline translates to US$2.26 earnings per share and US$2.20 per share on an adjusted basis, also beating the estimate of US$1.78 per share and the company’s guidance at US$1.82 – US$1.87 per share.

Following the announcement, the firm opened today to a 10.8% jump in share price.

The company is raising its fiscal 2022 revenue guidance to US$7.87 – US$7.94 billion from the previously announced US$7.61 – US$7.71 billion. Its also raised its expected adjusted earnings per share for 2022, increasing it to US$9.75 – US$9.90 from the previous forecast of US$9.35 – US$9.50.

For Q3 2022, the firm is expecting sales to land US$1.78 – US$1.81 billion while adjusted earnings per share is expected to hit US$1.90 – US$1.95 for the three-month period. For comparison, Q3 2021’s revenue landed at US$1.45 billion.

However, the apparel brand still sustained an operating cash outflow of US$145.6 million during the first half of the fiscal year. This led the firm to end with cash and cash equivalents balance of US$498.8 million from last quarter’s ending balance of US$649.0 million and fiscal year starting balance of US$1.26 billion.

But the firm saw its inventories further increase during the quarter to US$1.46 billion from last quarter’s US$1.28 billion. This contributed to the current assets ending at US$2.39 billion while current liabilities ended at US$1.21 billion.

The apparel chain ended the quarter with 600 stores, up from 579 stores at the end of the previous quarter.

Lululemon last traded at $325.42 on the Nasdaq.

Information for this briefing was found via Edgar and the companies mentioned. The author has no affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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