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What Drove Lululemon’s Top Line in Fiscal 4Q17?

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Fiscal 4Q17 top line

As we discussed in the previous article, Lululemon Athletica (LULU) reported its fiscal 4Q17 results for the period that ended on January 28, 2018, on March 27, 2018.

The company’s top line rose 17.6% YoY (year-over-year) to $928.8 million in fiscal 4Q17, $16 million higher than Wall Street’s consensus expectation. This rise marked the sixth consecutive top line beat for the company. The results also exceeded the upper end of management’s guidance of $905 million–$915 million.

For fiscal 2017, LULU’s total sales rose 13% to $2.6 billion. The company’s growth numbers have outpaced those of its close competitors. Nike (NKE), Columbia Sportswear (COLM), and Under Armour (UAA) have grown their sales 4%, 3.7%, and 3%, respectively, over the last 12 months.

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Strong e-commerce comps drive fiscal 4Q17 top line

Lululemon’s top line growth in fiscal 4Q17 was fueled by robust growth in its total comparable sales. Its sales comps soared 12% during the quarter, topping consensus expectations of an 8.6% increase. The company’s website relaunch during the third quarter boosted its digital sales, which recorded comps growth of 42% during fiscal 4Q17.

The company recorded YoY square-footage growth of 14% in fiscal 4Q17 (after normalizing for ivivva). It’s opened 46 net new stores since fiscal 4Q16.

Lululuemon North America recorded a strong quarter as both store comps and store traffic improved at a low-single-digit rate. Its international business also remained healthy. Asia, for instance, recorded comps growth of 52% driven by triple-digit growth in digital comps. Foreign exchange also had a positive impact on the company’s top line, boosting sales by $11 million.

ETF investors seeking to add exposure to LULU can consider the First Trust Consumer Discretionary Alpha DEX ETF (FXD), which invests 0.9% of its portfolio in LULU.

In the next article, we’ll discuss LULU’s bottom line performance in fiscal 4Q17.

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