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Lululemon Athletica’s Performance Rose in 4Q15 and 2015

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Price movement 

Lululemon Athletica (LULU) rose by 12.8% and closed at $68.69 per share at the end of the fifth week of March 2016. The price movements on a weekly, monthly, and YTD (year-to-date) basis were 12.8%, 9.4%, and 30.9%, respectively.

Currently, Lululemon is trading 9.8% above its 20-day moving average, 12.6% above its 50-day moving average, and 19.2% above its 200-day moving average.

The Vanguard Mid-Cap ETF (VO) invests 0.19% of its holdings in Lululemon Athletica. VO tracks the CRSP US Mid-Cap Index—a diversified index of mid-cap US companies. VO’s YTD price movement was 0.91%.

The market caps of Lululemon Athletica’s competitors are as follows:

  • Nike (NKE) – $104.7 billion
  • Gap (GPS) – $11.7 billion
  • Express (EXPR) – $1.7 billion
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Performance in 4Q15 and 2015

Lululemon Athletica reported fiscal 4Q15 net revenue of $704.3 million—a rise of 16.9% compared to net revenue of $602.5 million in fiscal 4Q14. The company’s gross profit margin fell by 2.3% and its operating income rose by 5.8% in fiscal 4Q15—compared to fiscal 4Q14.

The company’s net income and EPS (earnings per share) rose to $117.4 million and $0.85, respectively, in fiscal 4Q15—compared to $110.9 million and $0.78, respectively, in fiscal 4Q14.

Fiscal 2015 results

In fiscal 2015, Lululemon reported net revenue of ~$2.1 billion—a rise of 14.7% YoY (year-over-year). The company’s net income and EPS rose to $266 million and $1.89, respectively, in fiscal 2015—compared to $239 million and $1.66, respectively, in fiscal 2014.

Lululemon’s cash and cash equivalents fell by 24.5% and its inventories rose by 36.5% in fiscal 2015. Its current ratio fell to 4.1x and its DE (debt-to-equity) ratio rose to 0.28x in fiscal 2015—compared to a current ratio and DE ratio of 5.9x and 0.19x, respectively, in fiscal 2014.

The company’s price-to-earnings and price-to-sales ratios were 36.1x and 4.5x, respectively, as of April 1, 2016.

Projections

The company made the following projections for fiscal 1Q16:

  • net revenue of $483 million–$488 million based on total comparable sales on a constant dollar basis
  • EPS of $0.28–$0.30

The company made the following projections for fiscal 2016:

  • net revenue of $2.29 billion–$2.34 billion based on total comparable sales on a constant dollar basis
  • EPS of $2.05–$2.15
  • an effective tax rate of 30.2%

This guidance doesn’t reflect any future share repurchases in fiscal 1Q16 and 2016.

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