Lululemon Breaks E-Commerce Records
Athletic apparel retailer lululemon athletica broke its own e-commerce records in the five days spanning Thanksgiving through Cyber Monday.
“For the five days spanning Thanksgiving through Cyber Monday, both our digital and brick-and-mortar channels performed well,” said CEO Calvin McDonald, on the company earnings call. “E-commerce delivered record-breaking days in several key metrics, including sales, traffic and conversion.”
Thanksgiving Day was lululemon’s highest-volume e-commerce day ever, McDonald noted.
“The investments we have made over the last several years are enabling the acceleration we're seeing in the digital business and contributing to the growth this year on top of last year's outsized performance,” he continued.
The retailer hasn’t backed off from investing in its digital prowess.
Capital expenditures were $122 million in Q3 2021, compared to $66 million in the third quarter last year. The retailer spent money on supply chain investment and technology to support business growth, store capital for new locations, and relocations and renovations.
Q 3 2021, Compared to Q3 2020
- Net revenue increased 30% to $1.5 billion.
- Net revenue increased 28% in North America, and increased 40% internationally.
- Total comparable sales increased 27%.
- Comparable store sales increased 32%.
- Direct to consumer net revenue increased 23% to $586.5 million.
- Direct to consumer net revenue represented 40.4% of total net revenue compared to 42.8% for the third quarter of 2020.
- Gross profit increased 32% to $829.4 million and gross margin increased 110 basis points to 57.2%.
- The Company opened 18 net new company-operated stores during the third quarter, ending with 552 stores.
“We continue to leverage and enhance our in-store and omni capabilities, including enhancing our mobile app to facilitate curbside pickup for guests, make our in-store handheld units more intuitive for our educators to help speed guests through transactions, and continue to offer our online digital educator service at no cost — providing a personal shopping experience for guests who can't make it into our stores,” said McDonald.
The company expects capital expenditures to be approximately $375-$385 million for 2021. The increase versus 2020 reflects boosted investment in the retailer’s supply chain, digital capabilities, new store openings and renovations, including Mirror shop-in-shops, other technology and general corporate infrastructure projects.
The retailer also raised its outlook for the year. For 2021, it expects net revenue to be in the range of $6.250 billion to $6.290 billion. Diluted earnings per share are expected to be in the range of $7.38 to $7.45 for the year and adjusted diluted earnings per share are expected to be in the range of $7.69 to $7.76.
"Our teams continue to execute at a high level, which has enabled our strong Q3 performance and the upward revision to our guidance,” said CFO Meghan Frank in a statement. “We are pleased with these results given the ongoing, industry-wide supply chain issues we continue to navigate. While there are several large volume weeks ahead of us, we feel well positioned for a strong end to 2021."
"Our third quarter results demonstrate the ongoing strength of lululemon and the tremendous growth potential of the business in both the near- and long-term,” said McDonald in a statement. “We are pleased with our early holiday season performance and how the lululemon brand continues to resonate in markets around the world.”