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Lululemon (LULU) reports fiscal Q1 2020 earnings, shares fall

A Lululemon sign hangs in front of their store at the Woodbury Commons Premium Outlets shopping mall on November 17, 2019 in Central Valley, New York.

Gary Hershorn | Corbis News | Getty Images

Lululemon reported a first-quarter sales decline of 17{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f}, as its strong digital business wasn’t enough to offset the losses from its stores being temporarily shut due to the coronavirus pandemic. 

As of June 10, the yoga pants and sports bra maker said 295 of its stores have reopened for business. 

Lululemon shares fell more than 6{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} in after-hours trading Thursday following the release. 

Here’s how the company did during its fiscal first quarter ended May 3: 

  • Earnings per share: 22 cents 
  • Revenue: $651.96 million 

Net income came in at $28.6 million, or 22 cents per share, compared with $96.6 million, or 74 cents a share, a year ago. 

Total revenue fell 17{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} to $651.96 million from $782.3 million a year ago. 

The company said its e-commerce sales totaled $352 million, making up 54{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} of total revenue, compared with $209.8 million, or 26.8{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} of total revenue, a year ago. 

Analysts were expecting the company to earn 23 cents per share on revenue of $688.4 million, according to Refinitiv estimates. However, the impact from the Covid-19 crisis makes these estimates difficult to compare to actual earnings. 

Its gross margin fell to 51.3{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} of net revenue, compared with 53.9{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} a year ago. Lululemon said the decline was due, in part, to higher costs to run its distribution centers as online orders surged. 

Lululemon said its inventory jumped 41{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} to $625.8 million during the quarter. 

The company is not currently offering an outlook for 2020. 

Lululemon shares are up more than 33{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} this year. The company has a market cap of $40.2 billion. 

Find the full earnings press release here. 

This is a developing story. Please check back for updates. 

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