Lululemon, the American athletic apparel retailer, is out with its Q1 report!
The digital sales have been impressive – not surprising considering store closures and subsequent lockdown during the period.
The retailer posted a whopping 68 per cent increase in its online sales during the quarter, which is 54 per cent of total net revenue compared to nearly 27 per cent for the Q1 of fiscal 2019.
However, keeping aside its online performance, which was expected to be good in this quarter, overall performance is far from being satisfactory. The net revenue has fallen by 17 per cent from what it was in the Q1 of the last fiscal to touch US $ 652 million.
On a constant dollar basis, the net revenue fell by 16 per cent.
Gross profit and gross margin have also witnessed notable slump. While the gross profit fell by 21 per cent from the first quarter of the previous year to record US $ 334.4 million, gross margin was 51.3 per cent – down by 260 basis points.
The report also said that the income of operations in Q1 too fell by 75 per cent from the first quarter of last year to touch US $ 32.8 million. The operating margin was 5 per cent – a decrease from Q1 of 2019.
Lululemon ended Q1 of fiscal 2020 with US $ 823 million in cash and cash equivalents and the capacity under its committed revolving credit facility was US $ 398.2 million. Notably, in fiscal 2019 (Q1), it had US $ 576.2 million in cash and cash equivalents.
Expressing optimism, Calvin McDonald, CEO, Lululemon, said “I am proud how Lululemon has navigated these unexpected and unprecedented times. Every day, we are learning more about our guests – how they enjoy interacting with us online and what makes them comfortable as stores reopen.”
He added “Our strong digital business demonstrates the strength of our guest connection and the long-term opportunity to create further Omni experiences going forward.”
The company ended Q1 with 489 stores and generates revenue of US $ 3.29 billion. It is known across the world for selling athleticwear that includes yoga pants, shorts, sweaters, jackets and undergarments.