Retail Stock Under Pressure: Lululemon Athletica Inc (NASDAQ: LULU)

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Lululemon Athletica Inc (NASDAQ: LULU) stock fell over 2.6% in the pre-market session of March 31st, 2021 (Source: Google finance). Comparable store productivity was 72%, or 71% on a constant dollar basis, representing a comparable store sales decline of 28%, or a decrease of 29% on a constant dollar basis.

Net revenue rose 21% in North America and grew 47% internationally. Total comparable sales increased 21%, or increased 20% on a constant dollar basis in the fourth quarter. The direct to consumer net revenue rose 94%, or increased 92% on a constant dollar basis. The direct-to-consumer net revenue represented 52% of total net revenue compared to 33% for the fourth quarter of 2019. Gross profit grew 25% to $1.0 billion in the quarter, and gross margin expanded 60 basis points to 58.6%. The adjusted income from operations increased 12% to $465.7 million and Adjusted operating margin decreased 290 basis points to 26.9%. Income tax expense rose 5% to $127.2 million. The adjusted effective tax rate was 27.4% for the fourth quarter of 2020. The Company had opened six net new company-operated stores during the quarter, ending with 521 stores.

LULU in the fourth quarter of FY 20 has reported the adjusted earnings per share of $2.58, while reported the adjusted revenue growth of 24 percent to $1.73 billion in the fourth quarter of FY 20. Additionally, in 2020 the company had repurchased 0.4 million shares of its own common stock at an average cost of $172.70 per share.

For the first quarter of fiscal 2021, the company expects net revenue to be in the range of $1.100 billion to $1.130 billion. Diluted earnings per share are expected to be in the range of $0.81 to $0.85 for the first quarter and adjusted earnings per share are expected to be in the range of $0.86 to $0.90. For fiscal 2021, the company expects net revenue to be in the range of $5.550 billion to $5.650 billion. Diluted earnings per share are expected to be in the range of $6.10 to $6.25 for the year and adjusted earnings per share are expected to be in the range of $6.30 to $6.45.

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