lulu Teases Website Overhaul

12/10/2015
In reporting its third-quarter 2015 financial results, lululemon athletica also gave a sneak peak of the big changes in store for its e-commerce website.

Executive vice president of digital Miguel Almeida says the upcoming redesign in 2016 is an "outstanding opportunity for us to bring our brand content and commerce together," describing lululemon's current digital experience as "decoupled."

Over the course of 2016, the company will incorporate personalization into its brand experience. "We're investing significantly in building our CRM and analytics capability and the new website will allow us to really deliver contextually relevant experiences to our guests that bring the storytelling of our product and brands into the digital space," he adds.

For the third quarter, which ended November 1, 2015, lululemon's net revenue jumped 14 percent to $479.7 million from $419.4 million in the third quarter of fiscal 2014. Total comparable sales, which includes comparable store sales and direct to consumer, increased by 9 percent for the third quarter on a constant dollar basis.

Comparable store sales for the third quarter rose by 6 percent on a constant dollar basis and direct to consumer revenue grew 21 percent on a constant dollar basis. Direct to consumer net revenue increased 16 percent to $89.3 million, or 18.6 percent of total revenue, in the third quarter of fiscal 2015, an increase from 18.4 percent of total revenues year over year.  "Our in-store ability to access our incoming inventory through our bag backroom app accounted for 8 percent of e-commerce revenue for the quarter," says CEO Laurent Potdevin.

Gross profit for the quarter increased by 7 percent to $224.8 million, and as a percentage of net revenue gross profit was 46.9 percent for the quarter compared to 50.3 percent in the third quarter of fiscal 2014. Income from operations for the quarter decreased by 16 percent to $68.2 million, and as a percentage of net revenue was 14.2 percent compared to 19.4 percent of net revenue the previous year.

lululemon ended the third quarter of fiscal 2015 with $403.4 million in cash and cash equivalents compared to $633.6 million at the end of the third quarter of fiscal 2014. Inventory at the end of the third quarter of fiscal 2015 totaled $357.8 million compared to $229.9 million at the end of the third quarter of fiscal 2014. The company ended the quarter with 354 stores.

"We've implemented critical organizational changes this quarter and now have in place a complete, world-class management team that is aligned with our strategic global priorities focused on design and dedicated to creating long-term value," says Potdevin.
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