Please ensure Javascript is enabled for purposes of website accessibility

Lululemon Athletica Reports 41% Digital Sales Growth For the Fourth Quarter

By John Ballard - Mar 26, 2020 at 6:11PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The retailer was clicking on all cylinders heading into the COVID-19 crisis.

lululemon athletica (LULU -2.58%) reported better-than-expected sales and earnings for the fiscal fourth quarter which ended Feb. 2, 2020. Revenue increased by 20% year over year, bringing full-year revenue to $4 billion. Higher margins boosted earnings by 23% year over year on an adjusted basis. 

The highlight of the quarter was an acceleration in direct-to-consumer revenue, including online sales, which surged 41% year over year. This channel comprises more than a quarter of Lululemon's business. 

A group of men and women practicing yoga during a class.

Image source: Getty Images.

Digital momentum is crucial in this environment

Before the COVID-19 outbreak put the economy on shut down, Lululemon was continuing to outperform the retail industry. In a statement, CEO Calvin McDonald said, "2019 was a strong year for lululemon, as our teams executed against our Power of Three growth plan." 

Lululemon's growth strategy involves growing sales through product innovation, investing in the digital shopping experience, and expanding the brand around the world. All three areas reported robust growth for the quarter, but unfortunately, that momentum will come to a temporary halt, with Lululemon closing all stores in North America and Europe through April 5.

The company is not providing guidance for fiscal 2020, as the COVID-19 situation remains fluid, but McDonald provided encouraging words. "The strength of our brand and strong financial position will help us manage through the day-to-day, while continuing to effectively plan for and invest in our future," he said in a press release.

Lululemon ended the quarter with nearly $1.1 billion in cash and no debt, and as Nike reported in its latest earnings, Lululemon's digital sales capabilities could be a lifesaver for the company in the short term with everyone staying home.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Lululemon Athletica Inc. Stock Quote
Lululemon Athletica Inc.
LULU
$276.31 (-2.58%) $-7.31

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
323%
 
S&P 500 Returns
112%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/06/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.