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1/ Thread: $LULU fiscal 3Q earnings call
Last month, I published a deep dive on $LULU.
https://mbi-deepdives.com/lulu/
I like the business, but not the valuation which of course market could not care less about.
Here are my notes from today's earnings call.
Last month, I published a deep dive on $LULU.
https://mbi-deepdives.com/lulu/
I like the business, but not the valuation which of course market could not care less about.
Here are my notes from today's earnings call.
2/ Total revenue +22%
North America +19%; International +45% (primarily China driven as revenue was >+100% in China)
Store productivity 82% vs management expectation of 75%
E-commerce (or DTC) +93%
North America +19%; International +45% (primarily China driven as revenue was >+100% in China)
Store productivity 82% vs management expectation of 75%
E-commerce (or DTC) +93%
3/ $LULU cult continues to be most dominant among women as women category grew +22% vs Men +14% despite the fact that women's category is 3.5x of Men's.
On a 9M basis, men's category sales actually declined 5.6% this year.
On a 9M basis, men's category sales actually declined 5.6% this year.
4/ This is in reversal to the trend that we have seen in last few years. Men's category was growing at 30-35% vs women's 20-25%.
$LULU's women are back. Men's are not.
$LULU's women are back. Men's are not.
5/ Impressive adaptability during Covid-19 to reduce wait times for the customers.
6/ $LULU's innovative pop-up store footprint will increase from 70 in Q3 to 100 in Q4 to capitalize on the demand and to respond to Covid-19 related capacity constraints within their full stores.
7/ $LULU now has direct checkout functionality on IG and $FB.
One analyst asked about member vs non-member comparison. Management wasn't willing to comment.
One analyst asked about member vs non-member comparison. Management wasn't willing to comment.
8/ Gross Margin was +56.1% vs 55.1% last year
Positives: 170 bps of leverage on occupancy and depreciation + 10 bps fx
Negatives: 80 bps deleverage in product margin driven by higher airfreight cost and higher markdowns
Inventory +23% YoY. Expects inventory to be +20-30% in Q4
Positives: 170 bps of leverage on occupancy and depreciation + 10 bps fx
Negatives: 80 bps deleverage in product margin driven by higher airfreight cost and higher markdowns
Inventory +23% YoY. Expects inventory to be +20-30% in Q4
9/ $LULU expects store productivity in Q4 to be 70% of last year's because of the re-surge of Covid-19.
Revenue growth guidance mid to high teen which was previously high single to low double digit.
Revenue growth guidance mid to high teen which was previously high single to low double digit.
10/ $LULU will launch footwear products in early'22. Watch out $NKE.
Lulu has seen some success in its bra segment which I think gives them inspiration to continue to expand the product pipeline and own the cult top to bottom.
Lulu has seen some success in its bra segment which I think gives them inspiration to continue to expand the product pipeline and own the cult top to bottom.
11/ Not much update on Mirror.
Quite a few management changes, mostly promotions. But two things caught my attention.
New EVP for International to join who is former Adidas Global GM
https://www.linkedin.com/in/andre-maestrini/
New board member from Loop Capital
https://www.loopcapital.com/kourtney-gibson
Quite a few management changes, mostly promotions. But two things caught my attention.
New EVP for International to join who is former Adidas Global GM
https://www.linkedin.com/in/andre-maestrini/
New board member from Loop Capital
https://www.loopcapital.com/kourtney-gibson
End/ Overall, a decent quarter. $LULU will continue to be on my watchlist.
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