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Lululemon Sizzles With Q4 Earnings, Revenue, and Comps Beats

By Rhian Hunt - Mar 31, 2021 at 8:25AM

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Its 2021 guidance is also predicting vigorous gains for this year.

Casual and exercise clothing company lululemon athletica (LULU -1.95%) posted its fourth-quarter and full-year fiscal 2020 results Tuesday after market close, flexing its muscles by coming in ahead of analyst consensus predictions. Wall Street expected the fast-growing enterprise to report adjusted earnings per share of $2.49, but the actual $2.58 adjusted EPS delivered a 3.6% positive surprise, beating by $0.09.

Lululemon came out ahead of expectations for the top line and comparable sales, or comps, too. Revenue of $1.7 billion for Q4 2020 rose 24% year over year, according to the company press release, and beat analyst predictions by $70 million, a narrower win than EPS but still surpassing Wall Street's calculations. Significantly, analysts expected comps to gain 12% year over year, but comparable sales actually grew a blistering 21% from Q4 2019.

A magnifying glass with a brass frame resting atop a bar graph of rising earnings.

Image source: Getty Images.

Full-year results saw revenue grow 11%, while adjusted EPS clocked in at $4.70, down slightly from 2019. Lululemon repurchased 400,000 shares during the year, and managed to open a net 30 stores despite COVID-19's impact. It had $1.2 billion in cash at year-end, approximately $100 million more than 2019's reserves.

Investors awaited today's earnings report for indicators about the clothing company's prospects for fiscal 2021, and Lululemon's guidance also looks positive. The company's guidance is calling for $5.55 billion to $5.65 billion in revenue, a 26.1% to 28.4% jump year over year from 2020. It is guiding for adjusted EPS of $6.30 to $6.45, 34% to 37.2% higher than 2020's bottom line.

Lululemon clearly expects to sustain momentum even after the COVID-19 pandemic wanes and people resume activities away from home, supporting CEO Calvin McDonald's claim that the company is "still in the early innings of our growth, fueled by exciting innovations."

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