Results mark the last full quarter before Heidi O’Neill takes over as Lululemon’s new chief executive
Lululemon Athletica Inc. reported a tough second quarter on Thursday as revenue, profits and comparable sales all declined year over year.
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The Vancouver-based athletic apparel retailer reported a four per cent drop in year-over-year net revenue to US$2.4 billion, in line with analysts’ forecasts.
Net income was US$329 million, up from US$195 million in the first quarter but down from US$370 million a year ago. Diluted earnings per share were US$2.92, down from US$3.10 per share last year but overshooting analysts’ expectations of US$1.79 per share.
“As we moved into Q2, we faced negative commentary in the media and social channels which impacted traffic, and softer than planned response to some new product launches, which contributed to a moderating sales trend,” Lululemon’s interim co-chief executive and chief financial officer Meghan Frank said on a call with analysts.
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The company reported a nine per cent dip in comparable sales, a metric that includes net revenue from online sales and established stores that have been open for at least 12 months. The Americas region led the decline with a 12 per cent drop, while international comparable sales fell three per cent.
The latest results mark the last full quarter before Heidi O’Neill, a former executive at Nike Inc., takes over as Lululemon’s new chief executive on Sept. 8.
