LULU Sept 2015 Investor Presentation

download LULU Sept 2015 Investor Presentation

of 9

  • date post

    07-Aug-2018
  • Category

    Documents

  • view

    216
  • download

    0

Embed Size (px)

Transcript of LULU Sept 2015 Investor Presentation

  • 8/20/2019 LULU Sept 2015 Investor Presentation

    1/9

    9/17/201

    lululemon athletica inc. 2015 Stifel Consumer Conference • September 17, 2015

    This presentation contains "forward ‐looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 that involve risks, uncertainties and assumptions, such as statements regarding our future financial condition or results of operations, our prospects and strategies for future growth, the development and introduction of new products, and the implementation of our marketing and branding strategies. In many cases, you can identify forward ‐looking statements by terms such as "may," "will," "should," "expects," "plans," "anticipates," "outlook," "believes," "intends," "estimates," "predicts," "potential" or the negative of these terms or other comparable terminology. These forward ‐looking statements are based on management's current expectations but they involve a number of risks and uncertainties. Actual results and the timing of events could differ materially from those anticipated in the forward ‐looking statements as a result of risks and uncertainties, which include, without limitation: an economic downturn or economic uncertainty in our key markets; increasing product costs and decreasing selling prices; our inability to anticipate consumer preferences and successfully develop and introduce new, innovative and updated products; our inability to accurately forecast customer demand for our products; our inability to manage our growth and the increased complexity of our business effectively; the fluctuating costs of raw materials; our reliance on and limited control over third ‐party suppliers to provide fabrics for and to produce our products; our highly competitive market and increasing competition; an unforeseen disruption of our information systems; our inability to deliver our products to the market and to meet customer expectations due to problems with our distribution system; our inability to cancel store leases if an existing or new store is not profitable; increasing labor costs and other factors associated with the production of our products in China or other countries; our inability to successfully open new store locations in a timely manner; our failure to maintain the value and reputation of our brand; our failure to comply with trade and other regulations; our competitors manufacturing and selling products based on our fabrics and manufacturing technology at lower prices than we can; our failure to protect our intellectual property rights; and other risks and uncertainties set out in filings made from time to time with the United States Securities and Exchange Commission and available at www.sec.gov , including, without limitation, our most recent reports on Form 10‐K and Form 10‐Q. You are urged to consider these factors carefully in evaluating the forward ‐looking statements contained herein and are cautioned not to place undue reliance on such forward ‐looking statements, which are qualified in their entirety by these cautionary statements. The forward ‐looking statements made herein speak only as of the date of this presentation and the company undertakes no obligation to publicly update such forward ‐looking statements to reflect subsequent events or circumstances.

    forward looking statements

    | 2

  • 8/20/2019 LULU Sept 2015 Investor Presentation

    2/9

    9/17/201

    Strategy Overview

    | 3

    Guest Experience

    Product Relentless product innovation • $3B women’s business

    • $1B men’s business

    Store and website experience • Web penetration >25% • DD square footage growth CAGR • Omni‐channel and CRM excellence

    Brand & Community

    Grow our collective • Invest/evolve community strategy

    • Increase brand awareness globally

    Operational Excellence

    Supply chain and infrastructure investments

    • Flexible, reliable supply chain • Unlock product margin recovery: +300 bps goal

    International Profitable, overseas expansion • APAC

    • EMEA 40 stores by 2017, ramping faster beyond

    1H:15 Progress

    | 4

    Product • Women’s pant wall launch – DD comps

    • 25% men’s comp year to date

    Guest Experience

    • 33% e‐commerce comp year to date • Positive store comps – Q2 all regions positive • Successful store expansions

    Brand & Community

    • ‘Get Quiet, Live Loud’ 16‐city tour • Sea Wheeze half ‐marathon

    Operational Excellence

    • Team and systems investments • Critical senior management adds

    International • 4 new stores open in 3 countries

    • 17 showrooms operated in 9 countries

  • 8/20/2019 LULU Sept 2015 Investor Presentation

    3/9

    9/17/201

    product – pant wall launch

    largest coordinated product launch – focused on extending design, quality, and innovation

    | 5

    guest experience – Robson relocation

    square footage increase of 40% with sales increase tracking to +75%

    | 6

  • 8/20/2019 LULU Sept 2015 Investor Presentation

    4/9

    9/17/201

    brand and community ‐ SeaWheeze

    more than 10,000 participants from 17+ countries helping extend brand awareness

    | 7

    international growth – Hong Kong IFC Mall

    on track for US$8M annually and sales per square foot of $6,000

    | 8

  • 8/20/2019 LULU Sept 2015 Investor Presentation

    5/9

    9/17/201

    financial overview

    Q2 financial results Second Quarter 2015

    Revenue $453.0 million

    Combined Comp +11%

    Gross Margin 46.8%

    SG A 32.1%

    Diluted EPS $0.34

    E commerce penetration 18.2%

    Store openings 20

    Inventory $281 million / +55%

    * Q2 results were reported on Sept. 10, 2015

    | 10

  • 8/20/2019 LULU Sept 2015 Investor Presentation

    6/9

    9/17/201

    Q2 gross margin – what happened?

    Q2 2014 Gross Margin 50.5%

    Product Margin (110) bps

    Markdowns (30) bps

    Air Freight (50) bps

    FX (70) bps

    Buying Costs 0

    Occupancy & Depreciation (110) bps

    2015 Gross Margin 46.8%

    (55) bps Cost variances ‐ port disruptions

    (35) bps Raw materials liability actions

    (20) bps Selling mix (31% men’s comp)

    | 11

    2015 gross margin outlook Guidance

    Q2 Q3 Q4

    2014 Gross Margin 50.5% 50.3% 51.5%

    Product Margin (110) bps delever similar to Q2

    start to stabilize sequentially better

    Markdowns (30) bps delever similar to Q2

    delever similar to prior Qs

    Air Freight (50) bps delever sequentially better

    lever

    Buying Costs 0 flat flat

    FX (70) bps delever sequentially worse

    delever sequentially better

    Occupancy & Depreciation (110) bps delever similar to Q2

    delever sequentially better

    2015 Gross Margin 46.8% ~47% TBD

    | 12

  • 8/20/2019 LULU Sept 2015 Investor Presentation

    7/9

    9/17/201

    2016 gross margin recovery outlook

    Product Margin

    Air Freight (finished & raw materials)

    +300 bps improvement (pre FX) vs. 2014

    Improved Costing

    Raw Materials Efficiencies

    Logistics & Distribution

    Other GM Components

    Foreign Exchange deleverage

    Occupancy & Depreciation deleverage sequentially better than FY15

    Buying Costs leverage

    | 13

    2015 inventory outlook Q2 Q3 Q4

    Inventory Balance +55% still elevated better aligned

    Markdowns as % of Sales 30 bps similar to 1H:15 similar to 1H:15

    Excess Clearance Movement

    170K units online

    warehouse sale +

    outlets

    100K units physical

    warehouse sale +

    outlets

    130K units physical

    warehouse sale +

    outlets

    | 14

  • 8/20/2019 LULU Sept 2015 Investor Presentation

    8/9

  • 8/20/2019 LULU Sept 2015 Investor Presentation

    9/9

    9/17/201

    lululemon athletica inc. 2015 Stifel Consumer Conference • September 17, 2015