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þ
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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20-3842867
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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1818 Cornwall Avenue
Vancouver, British Columbia
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V6J 1C7
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
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þ
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Accelerated filer
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o
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Non-accelerated filer
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o
(Do not check if a smaller reporting company)
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Smaller reporting company
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o
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Emerging growth company
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o
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Page
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Item 1.
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Item 2.
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Item 3.
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Item 4.
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Item 1.
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Item 1A.
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Item 2.
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Item 6.
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July 29,
2018 |
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January 28,
2018 |
||||
ASSETS
|
||||||||
Current assets
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
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777,841
|
|
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$
|
990,501
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Accounts receivable
|
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23,535
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|
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19,173
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|
||
Inventories
|
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392,672
|
|
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329,562
|
|
||
Prepaid and receivable income taxes
|
|
62,203
|
|
|
48,948
|
|
||
Other prepaid expenses and other current assets
|
|
51,786
|
|
|
48,098
|
|
||
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1,308,037
|
|
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1,436,282
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|
||
Property and equipment, net
|
|
487,546
|
|
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473,642
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||
Goodwill and intangible assets, net
|
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24,255
|
|
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24,679
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|
||
Deferred income tax assets
|
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28,345
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|
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32,491
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|
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Other non-current assets
|
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32,974
|
|
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31,389
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||
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$
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1,881,157
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|
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$
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1,998,483
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|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
||||
Current liabilities
|
|
|
|
|
||||
Accounts payable
|
|
$
|
110,523
|
|
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$
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24,646
|
|
Accrued inventory liabilities
|
|
12,597
|
|
|
13,027
|
|
||
Accrued compensation and related expenses
|
|
62,794
|
|
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70,141
|
|
||
Current income taxes payable
|
|
3,021
|
|
|
15,700
|
|
||
Unredeemed gift card liability
|
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64,420
|
|
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82,668
|
|
||
Revolving credit facility
|
|
100,000
|
|
|
—
|
|
||
Other current liabilities
|
|
95,806
|
|
|
86,416
|
|
||
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449,161
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|
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292,598
|
|
||
Non-current income taxes payable
|
|
44,078
|
|
|
48,268
|
|
||
Deferred income tax liabilities
|
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1,582
|
|
|
1,336
|
|
||
Other non-current liabilities
|
|
66,121
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|
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59,321
|
|
||
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560,942
|
|
|
401,523
|
|
||
Stockholders' equity
|
|
|
|
|
||||
Undesignated preferred stock, $0.01 par value: 5,000 shares authorized; none issued and outstanding
|
|
—
|
|
|
—
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||
Exchangeable stock, no par value: 60,000 shares authorized; 9,776 and 9,781 issued and outstanding
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|
—
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|
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—
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||
Special voting stock, $0.000005 par value: 60,000 shares authorized; 9,776 and 9,781 issued and outstanding
|
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—
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|
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—
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|
||
Common stock, $0.005 par value: 400,000 shares authorized; 122,656 and 125,650 issued and outstanding
|
|
613
|
|
|
628
|
|
||
Additional paid-in capital
|
|
299,702
|
|
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284,253
|
|
||
Retained earnings
|
|
1,224,044
|
|
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1,455,002
|
|
||
Accumulated other comprehensive loss
|
|
(204,144
|
)
|
|
(142,923
|
)
|
||
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1,320,215
|
|
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1,596,960
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|
||
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$
|
1,881,157
|
|
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$
|
1,998,483
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|
|
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Quarter Ended
|
|
Two Quarters Ended
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||||||||||||
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July 29, 2018
|
|
July 30, 2017
|
|
July 29, 2018
|
|
July 30, 2017
|
||||||||
Net revenue
|
|
$
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723,500
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|
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$
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581,054
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$
|
1,373,206
|
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$
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1,101,361
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Cost of goods sold
|
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327,306
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283,632
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632,279
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|
|
547,044
|
|
||||
Gross profit
|
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396,194
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|
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297,422
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|
|
740,927
|
|
|
554,317
|
|
||||
Selling, general and administrative expenses
|
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261,986
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|
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225,524
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502,414
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|
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424,665
|
|
||||
Asset impairment and restructuring costs
|
|
—
|
|
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3,186
|
|
|
—
|
|
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15,517
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|
||||
Income from operations
|
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134,208
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|
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68,712
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238,513
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|
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114,135
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|
||||
Other income (expense), net
|
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1,591
|
|
|
812
|
|
|
4,509
|
|
|
1,719
|
|
||||
Income before income tax expense
|
|
135,799
|
|
|
69,524
|
|
|
243,022
|
|
|
115,854
|
|
||||
Income tax expense
|
|
40,029
|
|
|
20,813
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|
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72,099
|
|
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35,897
|
|
||||
Net income
|
|
$
|
95,770
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|
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$
|
48,711
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$
|
170,923
|
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$
|
79,957
|
|
|
|
|
|
|
|
|
|
|
||||||||
Other comprehensive (loss) income:
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustment
|
|
(18,249
|
)
|
|
72,854
|
|
|
(61,221
|
)
|
|
41,079
|
|
||||
Comprehensive income
|
|
$
|
77,521
|
|
|
$
|
121,565
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|
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$
|
109,702
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|
|
$
|
121,036
|
|
|
|
|
|
|
|
|
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|
||||||||
Basic earnings per share
|
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$
|
0.71
|
|
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$
|
0.36
|
|
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$
|
1.27
|
|
|
$
|
0.59
|
|
Diluted earnings per share
|
|
$
|
0.71
|
|
|
$
|
0.36
|
|
|
$
|
1.26
|
|
|
$
|
0.58
|
|
Basic weighted-average number of shares outstanding
|
|
133,986
|
|
|
136,171
|
|
|
134,744
|
|
|
136,604
|
|
||||
Diluted weighted-average number of shares outstanding
|
|
134,530
|
|
|
136,303
|
|
|
135,230
|
|
|
136,747
|
|
|
|
Exchangeable Stock
|
|
Special Voting Stock
|
|
Common Stock
|
|
Additional Paid-in Capital
|
|
Retained Earnings
|
|
Accumulated Other Comprehensive Loss
|
|
Total
|
|||||||||||||||||||
|
|
Shares
|
|
Shares
|
|
Par Value
|
|
Shares
|
|
Par Value
|
|
|
|
|
|||||||||||||||||||
Balance at January 28, 2018
|
|
9,781
|
|
|
9,781
|
|
|
$
|
—
|
|
|
125,650
|
|
|
$
|
628
|
|
|
$
|
284,253
|
|
|
$
|
1,455,002
|
|
|
$
|
(142,923
|
)
|
|
$
|
1,596,960
|
|
Net income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
170,923
|
|
|
|
|
170,923
|
|
|||||||||||||
Foreign currency translation adjustment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(61,221
|
)
|
|
(61,221
|
)
|
|||||||||||||
Common stock issued upon exchange of exchangeable shares
|
|
(5
|
)
|
|
(5
|
)
|
|
—
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
—
|
|
||||||||
Stock-based compensation expense
|
|
|
|
|
|
|
|
|
|
|
|
13,048
|
|
|
|
|
|
|
13,048
|
|
|||||||||||||
Common stock issued upon settlement of stock-based compensation
|
|
|
|
|
|
|
|
437
|
|
|
2
|
|
|
13,750
|
|
|
|
|
|
|
13,752
|
|
|||||||||||
Shares withheld related to net share settlement of stock-based compensation
|
|
|
|
|
|
|
|
(81
|
)
|
|
—
|
|
|
(7,001
|
)
|
|
|
|
|
|
(7,001
|
)
|
|||||||||||
Repurchase of common stock
|
|
|
|
|
|
|
|
(3,355
|
)
|
|
(17
|
)
|
|
(4,348
|
)
|
|
(401,881
|
)
|
|
|
|
(406,246
|
)
|
||||||||||
Balance at July 29, 2018
|
|
9,776
|
|
|
9,776
|
|
|
$
|
—
|
|
|
122,656
|
|
|
$
|
613
|
|
|
$
|
299,702
|
|
|
$
|
1,224,044
|
|
|
$
|
(204,144
|
)
|
|
$
|
1,320,215
|
|
|
|
Two Quarters Ended
|
||||||
|
|
July 29, 2018
|
|
July 30, 2017
|
||||
Cash flows from operating activities
|
|
|
|
|
||||
Net income
|
|
$
|
170,923
|
|
|
$
|
79,957
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
||||
Depreciation and amortization
|
|
55,429
|
|
|
51,569
|
|
||
Deferred income taxes
|
|
2,464
|
|
|
(12,746
|
)
|
||
Stock-based compensation expense
|
|
13,048
|
|
|
8,710
|
|
||
Asset impairment for ivivva restructuring
|
|
—
|
|
|
11,593
|
|
||
Settlement of derivatives not designated in a hedging relationship
|
|
(1,807
|
)
|
|
—
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
||||
Inventories
|
|
(73,065
|
)
|
|
(10,041
|
)
|
||
Prepaid and receivable income taxes
|
|
(13,255
|
)
|
|
15,029
|
|
||
Other prepaid expenses and other current and non-current assets
|
|
(7,724
|
)
|
|
(20,376
|
)
|
||
Accounts payable
|
|
86,885
|
|
|
(6,784
|
)
|
||
Accrued inventory liabilities
|
|
615
|
|
|
9,571
|
|
||
Accrued compensation and related expenses
|
|
(4,926
|
)
|
|
(8,970
|
)
|
||
Current income taxes payable
|
|
(11,828
|
)
|
|
(25,310
|
)
|
||
Unredeemed gift card liability
|
|
(17,043
|
)
|
|
(15,192
|
)
|
||
Non-current income taxes payable
|
|
(4,190
|
)
|
|
—
|
|
||
Other current and non-current liabilities
|
|
14,500
|
|
|
25,028
|
|
||
Net cash provided by operating activities
|
|
210,026
|
|
|
102,038
|
|
||
Cash flows from investing activities
|
|
|
|
|
||||
Purchase of property and equipment
|
|
(84,007
|
)
|
|
(49,889
|
)
|
||
Settlement of net investment hedges
|
|
(4,514
|
)
|
|
—
|
|
||
Other investing activities
|
|
(771
|
)
|
|
—
|
|
||
Net cash used in investing activities
|
|
(89,292
|
)
|
|
(49,889
|
)
|
||
Cash flows from financing activities
|
|
|
|
|
||||
Proceeds from settlement of stock-based compensation
|
|
13,752
|
|
|
915
|
|
||
Taxes paid related to net share settlement of stock-based compensation
|
|
(7,001
|
)
|
|
(2,024
|
)
|
||
Repurchase of common stock
|
|
(406,246
|
)
|
|
(90,801
|
)
|
||
Net increase in revolving credit facility
|
|
100,000
|
|
|
—
|
|
||
Other financing activities
|
|
(744
|
)
|
|
—
|
|
||
Net cash used in financing activities
|
|
(300,239
|
)
|
|
(91,910
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
|
(33,155
|
)
|
|
26,127
|
|
||
Decrease in cash and cash equivalents
|
|
(212,660
|
)
|
|
(13,634
|
)
|
||
Cash and cash equivalents, beginning of period
|
|
$
|
990,501
|
|
|
$
|
734,846
|
|
Cash and cash equivalents, end of period
|
|
$
|
777,841
|
|
|
$
|
721,212
|
|
Note 1
|
||
Note 2
|
||
Note 3
|
||
Note 4
|
||
Note 5
|
||
Note 6
|
||
Note 7
|
||
Note 8
|
||
Note 9
|
||
Note 10
|
||
Note 11
|
||
Note 12
|
||
Note 13
|
|
|
July 29, 2018
|
||||||||||
|
|
As Reported
|
|
Adjustment for ASC 606
|
|
Balances Without Adoption of ASC 606
|
||||||
|
|
(In thousands)
|
||||||||||
Other prepaid expenses and other current assets
|
|
$
|
51,786
|
|
|
$
|
(2,751
|
)
|
|
$
|
49,035
|
|
Current assets
|
|
1,308,037
|
|
|
(2,751
|
)
|
|
1,305,286
|
|
|||
Total assets
|
|
1,881,157
|
|
|
(2,751
|
)
|
|
1,878,406
|
|
|||
|
|
|
|
|
|
|
||||||
Other current liabilities
|
|
95,806
|
|
|
2,751
|
|
|
98,557
|
|
|||
Current liabilities
|
|
449,161
|
|
|
2,751
|
|
|
451,912
|
|
|||
Total liabilities
|
|
560,942
|
|
|
2,751
|
|
|
563,693
|
|
|
|
Stock Options
|
|
Performance-Based Restricted Stock Units
|
|
Restricted Shares
|
|
Restricted Stock Units
|
||||||||||||||||||||
|
|
Number
|
|
Weighted-Average Exercise Price
|
|
Number
|
|
Weighted-Average Grant Date Fair Value
|
|
Number
|
|
Weighted-Average Grant Date Fair Value
|
|
Number
|
|
Weighted-Average Grant Date Fair Value
|
||||||||||||
|
|
(In thousands, except per share amounts)
|
||||||||||||||||||||||||||
Balance at January 28, 2018
|
|
1,117
|
|
|
$
|
56.44
|
|
|
329
|
|
|
$
|
60.42
|
|
|
21
|
|
|
$
|
52.45
|
|
|
427
|
|
|
$
|
57.54
|
|
Granted
|
|
308
|
|
|
86.99
|
|
|
85
|
|
|
87.19
|
|
|
6
|
|
|
124.19
|
|
|
248
|
|
|
87.18
|
|
||||
Exercised/released
|
|
245
|
|
|
56.20
|
|
|
39
|
|
|
63.04
|
|
|
21
|
|
|
52.45
|
|
|
145
|
|
|
59.37
|
|
||||
Forfeited/expired
|
|
277
|
|
|
58.49
|
|
|
127
|
|
|
61.35
|
|
|
—
|
|
|
—
|
|
|
40
|
|
|
64.58
|
|
||||
Balance at July 29, 2018
|
|
903
|
|
|
$
|
66.31
|
|
|
248
|
|
|
$
|
68.72
|
|
|
6
|
|
|
$
|
124.19
|
|
|
490
|
|
|
$
|
71.45
|
|
Exercisable at July 29, 2018
|
|
186
|
|
|
$
|
56.47
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Two Quarters Ended
July 29, 2018 |
|
Expected term
|
|
3.75 years
|
|
Expected volatility
|
|
36.88
|
%
|
Risk-free interest rate
|
|
2.46
|
%
|
Dividend yield
|
|
—
|
%
|
•
|
Level 1 - defined as observable inputs such as quoted prices in active markets;
|
•
|
Level 2 - defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and
|
•
|
Level 3 - defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.
|
|
|
July 29, 2018
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Balance Sheet Classification
|
||||||||
|
|
(In thousands)
|
|
|
||||||||||||||
Money market funds
|
|
$
|
143,478
|
|
|
$
|
143,478
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Cash and cash equivalents
|
Term deposits
|
|
337,818
|
|
|
—
|
|
|
337,818
|
|
|
—
|
|
|
Cash and cash equivalents
|
||||
Net forward currency contract assets
|
|
3,254
|
|
|
—
|
|
|
3,254
|
|
|
—
|
|
|
Other prepaid expenses and other current assets
|
||||
Net forward currency contract liabilities
|
|
5,891
|
|
|
—
|
|
|
5,891
|
|
|
—
|
|
|
Other current liabilities
|
|
|
January 28, 2018
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Balance Sheet Classification
|
||||||||
|
|
(In thousands)
|
|
|
||||||||||||||
Term deposits
|
|
$
|
258,238
|
|
|
$
|
—
|
|
|
$
|
258,238
|
|
|
$
|
—
|
|
|
Cash and cash equivalents
|
Net forward currency contract assets
|
|
7,889
|
|
|
—
|
|
|
7,889
|
|
|
—
|
|
|
Other prepaid expenses and other current assets
|
||||
Net forward currency contract liabilities
|
|
8,771
|
|
|
—
|
|
|
8,771
|
|
|
—
|
|
|
Other current liabilities
|
|
|
July 29, 2018
|
|
July 30, 2017
|
||||
|
|
(In thousands)
|
||||||
Derivatives designated as net investment hedges
|
|
$
|
339,000
|
|
|
$
|
78,000
|
|
Derivatives not designated in a hedging relationship
|
|
321,000
|
|
|
65,000
|
|
|
|
July 29, 2018
|
|
July 30, 2017
|
||||
|
|
(In thousands)
|
||||||
Net forward currency contract assets, recognized within other prepaid expenses and other current assets:
|
|
|
|
|
||||
Derivatives designated as net investment hedges
|
|
$
|
3,254
|
|
|
$
|
—
|
|
Derivatives not designated in a hedging relationship
|
|
—
|
|
|
5,937
|
|
||
Net forward currency contract liabilities, recognized within other current liabilities:
|
|
|
|
|
||||
Derivatives designated as net investment hedges
|
|
—
|
|
|
7,068
|
|
||
Derivatives not designated in a hedging relationship
|
|
5,891
|
|
|
—
|
|
|
|
Quarter Ended
|
|
Two Quarters Ended
|
||||||||||||
|
|
July 29, 2018
|
|
July 30, 2017
|
|
July 29, 2018
|
|
July 30, 2017
|
||||||||
|
|
(In thousands)
|
||||||||||||||
Gains (losses) recognized in foreign currency translation adjustment:
|
|
|
|
|
|
|
|
|
||||||||
Derivatives designated as net investment hedges
|
|
$
|
5,721
|
|
|
$
|
(8,925
|
)
|
|
$
|
16,538
|
|
|
$
|
(8,925
|
)
|
|
|
Quarter Ended
|
|
Two Quarters Ended
|
||||||||||||
|
|
July 29, 2018
|
|
July 30, 2017
|
|
July 29, 2018
|
|
July 30, 2017
|
||||||||
|
|
(In thousands)
|
||||||||||||||
Gains (losses) recognized in selling, general and administrative expenses:
|
|
|
|
|
|
|
|
|
||||||||
Foreign exchange gains (losses)
|
|
$
|
2,960
|
|
|
$
|
(9,303
|
)
|
|
$
|
12,605
|
|
|
$
|
(3,511
|
)
|
Derivatives not designated in a hedging relationship
|
|
(5,539
|
)
|
|
7,634
|
|
|
(15,587
|
)
|
|
7,634
|
|
||||
Net foreign exchange and derivative (losses) gains
|
|
$
|
(2,579
|
)
|
|
$
|
(1,669
|
)
|
|
$
|
(2,982
|
)
|
|
$
|
4,123
|
|
|
|
Quarter Ended
|
|
Two Quarters Ended
|
||||||||||||
|
|
July 29, 2018
|
|
July 30, 2017
|
|
July 29, 2018
|
|
July 30, 2017
|
||||||||
|
|
(In thousands)
|
||||||||||||||
Costs recorded in cost of goods sold:
|
|
|
|
|
|
|
|
|
||||||||
Provision to reduce inventories to net realizable value
|
|
$
|
—
|
|
|
$
|
962
|
|
|
$
|
—
|
|
|
$
|
2,904
|
|
Expected loss on committed inventory purchases
|
|
—
|
|
|
(941
|
)
|
|
—
|
|
|
2,536
|
|
||||
Accelerated depreciation
|
|
—
|
|
|
2,223
|
|
|
—
|
|
|
2,223
|
|
||||
|
|
—
|
|
|
2,244
|
|
|
—
|
|
|
7,663
|
|
||||
Costs recorded in operating expenses:
|
|
|
|
|
|
|
|
|
||||||||
Impairment of property and equipment
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,593
|
|
||||
Employee related costs
|
|
—
|
|
|
2,458
|
|
|
—
|
|
|
3,196
|
|
||||
Lease termination and other restructuring costs
|
|
—
|
|
|
728
|
|
|
—
|
|
|
728
|
|
||||
Asset impairment and restructuring costs
|
|
—
|
|
|
3,186
|
|
|
—
|
|
|
15,517
|
|
||||
Restructuring and related costs
|
|
$
|
—
|
|
|
$
|
5,430
|
|
|
$
|
—
|
|
|
$
|
23,180
|
|
|
|
Quarter Ended
|
|
Two Quarters Ended
|
||||||||||||
|
|
July 29, 2018
|
|
July 30, 2017
|
|
July 29, 2018
|
|
July 30, 2017
|
||||||||
|
|
(In thousands, except per share amounts)
|
||||||||||||||
Net income
|
|
$
|
95,770
|
|
|
$
|
48,711
|
|
|
$
|
170,923
|
|
|
$
|
79,957
|
|
Basic weighted-average number of shares outstanding
|
|
133,986
|
|
|
136,171
|
|
|
134,744
|
|
|
136,604
|
|
||||
Assumed conversion of dilutive stock options and awards
|
|
544
|
|
|
132
|
|
|
486
|
|
|
143
|
|
||||
Diluted weighted-average number of shares outstanding
|
|
134,530
|
|
|
136,303
|
|
|
135,230
|
|
|
136,747
|
|
||||
Basic earnings per share
|
|
$
|
0.71
|
|
|
$
|
0.36
|
|
|
$
|
1.27
|
|
|
$
|
0.59
|
|
Diluted earnings per share
|
|
$
|
0.71
|
|
|
$
|
0.36
|
|
|
$
|
1.26
|
|
|
$
|
0.58
|
|
|
|
July 29,
2018 |
|
January 28,
2018 |
||||
|
|
(In thousands)
|
||||||
Inventories:
|
|
|
|
|
||||
Finished goods
|
|
$
|
411,801
|
|
|
$
|
344,695
|
|
Provision to reduce inventories to net realizable value
|
|
(19,129
|
)
|
|
(15,133
|
)
|
||
|
|
$
|
392,672
|
|
|
$
|
329,562
|
|
|
|
July 29,
2018 |
|
January 28,
2018 |
||||
|
|
(In thousands)
|
||||||
Property and equipment, net:
|
|
|
|
|
||||
Land
|
|
$
|
78,829
|
|
|
$
|
83,048
|
|
Buildings
|
|
38,100
|
|
|
39,278
|
|
||
Leasehold improvements
|
|
313,062
|
|
|
301,449
|
|
||
Furniture and fixtures
|
|
94,270
|
|
|
91,778
|
|
||
Computer hardware
|
|
64,060
|
|
|
61,734
|
|
||
Computer software
|
|
181,909
|
|
|
173,997
|
|
||
Equipment and vehicles
|
|
14,993
|
|
|
14,806
|
|
||
Work in progress
|
|
78,503
|
|
|
51,260
|
|
||
Property and equipment, gross
|
|
863,726
|
|
|
817,350
|
|
||
Accumulated depreciation
|
|
(376,180
|
)
|
|
(343,708
|
)
|
||
|
|
$
|
487,546
|
|
|
$
|
473,642
|
|
Goodwill and intangible assets, net:
|
|
|
|
|
||||
Goodwill
|
|
$
|
25,496
|
|
|
$
|
25,496
|
|
Changes in foreign currency exchange rates
|
|
(1,241
|
)
|
|
(890
|
)
|
||
|
|
24,255
|
|
|
24,606
|
|
||
Intangible assets, net
|
|
—
|
|
|
73
|
|
||
|
|
$
|
24,255
|
|
|
$
|
24,679
|
|
Other non-current assets:
|
|
|
|
|
||||
Security deposits
|
|
$
|
13,869
|
|
|
$
|
11,599
|
|
Deferred lease assets
|
|
8,908
|
|
|
10,458
|
|
||
Other
|
|
10,197
|
|
|
9,332
|
|
||
|
|
$
|
32,974
|
|
|
$
|
31,389
|
|
Other current liabilities:
|
|
|
|
|
||||
Accrued duty, freight, and other operating expenses
|
|
$
|
44,808
|
|
|
$
|
33,695
|
|
Sales tax collected
|
|
13,205
|
|
|
11,811
|
|
||
Sales return allowance
|
|
8,911
|
|
|
6,293
|
|
||
Accrued rent
|
|
6,234
|
|
|
7,074
|
|
||
Forward currency contract liabilities
|
|
5,891
|
|
|
8,771
|
|
||
Accrued capital expenditures
|
|
4,671
|
|
|
5,714
|
|
||
Lease termination liabilities
|
|
3,219
|
|
|
6,427
|
|
||
Other
|
|
8,867
|
|
|
6,631
|
|
||
|
|
$
|
95,806
|
|
|
$
|
86,416
|
|
Other non-current liabilities:
|
|
|
|
|
||||
Deferred lease liabilities
|
|
$
|
30,061
|
|
|
$
|
27,186
|
|
Tenant inducements
|
|
30,510
|
|
|
26,250
|
|
||
Other
|
|
5,550
|
|
|
5,885
|
|
||
|
|
$
|
66,121
|
|
|
$
|
59,321
|
|
|
|
Quarter Ended
|
|
Two Quarters Ended
|
||||||||||||
|
|
July 29, 2018
|
|
July 30, 2017
|
|
July 29, 2018
|
|
July 30, 2017
|
||||||||
|
|
(In thousands)
|
||||||||||||||
Net revenue:
|
|
|
|
|
|
|
|
|
||||||||
Company-operated stores
|
|
$
|
486,368
|
|
|
$
|
413,944
|
|
|
$
|
919,499
|
|
|
$
|
793,043
|
|
Direct to consumer
|
|
167,405
|
|
|
113,049
|
|
|
325,248
|
|
|
210,272
|
|
||||
Other
|
|
69,727
|
|
|
54,061
|
|
|
128,459
|
|
|
98,046
|
|
||||
|
|
$
|
723,500
|
|
|
$
|
581,054
|
|
|
$
|
1,373,206
|
|
|
$
|
1,101,361
|
|
Segmented income from operations:
|
|
|
|
|
|
|
|
|
||||||||
Company-operated stores
|
|
$
|
125,868
|
|
|
$
|
92,609
|
|
|
$
|
225,155
|
|
|
$
|
170,139
|
|
Direct to consumer
|
|
67,033
|
|
|
38,748
|
|
|
129,300
|
|
|
72,846
|
|
||||
Other
|
|
13,094
|
|
|
6,952
|
|
|
24,317
|
|
|
9,760
|
|
||||
|
|
205,995
|
|
|
138,309
|
|
|
378,772
|
|
|
252,745
|
|
||||
General corporate expense
|
|
71,787
|
|
|
64,167
|
|
|
140,259
|
|
|
115,430
|
|
||||
Restructuring and related costs
|
|
—
|
|
|
5,430
|
|
|
—
|
|
|
23,180
|
|
||||
Income from operations
|
|
134,208
|
|
|
68,712
|
|
|
238,513
|
|
|
114,135
|
|
||||
Other income (expense), net
|
|
1,591
|
|
|
812
|
|
|
4,509
|
|
|
1,719
|
|
||||
Income before income tax expense
|
|
$
|
135,799
|
|
|
$
|
69,524
|
|
|
$
|
243,022
|
|
|
$
|
115,854
|
|
|
|
|
|
|
|
|
|
|
||||||||
Capital expenditures:
|
|
|
|
|
|
|
|
|
||||||||
Company-operated stores
|
|
$
|
27,765
|
|
|
$
|
16,634
|
|
|
$
|
47,001
|
|
|
$
|
23,802
|
|
Direct to consumer
|
|
593
|
|
|
6,861
|
|
|
1,314
|
|
|
8,841
|
|
||||
Corporate and other
|
|
21,335
|
|
|
6,515
|
|
|
35,692
|
|
|
17,246
|
|
||||
|
|
$
|
49,693
|
|
|
$
|
30,010
|
|
|
$
|
84,007
|
|
|
$
|
49,889
|
|
Depreciation and amortization:
|
|
|
|
|
|
|
|
|
||||||||
Company-operated stores
|
|
$
|
18,489
|
|
|
$
|
15,881
|
|
|
$
|
35,571
|
|
|
$
|
31,081
|
|
Direct to consumer
|
|
2,302
|
|
|
4,353
|
|
|
4,901
|
|
|
6,347
|
|
||||
Corporate and other
|
|
7,865
|
|
|
8,172
|
|
|
14,957
|
|
|
14,141
|
|
||||
|
|
$
|
28,656
|
|
|
$
|
28,406
|
|
|
$
|
55,429
|
|
|
$
|
51,569
|
|
|
|
Quarter Ended
|
|
Two Quarters Ended
|
||||||||||||
|
|
July 29, 2018
|
|
July 30, 2017
|
|
July 29, 2018
|
|
July 30, 2017
|
||||||||
|
|
(In thousands)
|
||||||||||||||
United States
|
|
$
|
512,413
|
|
|
$
|
413,634
|
|
|
$
|
974,683
|
|
|
$
|
793,101
|
|
Canada
|
|
124,278
|
|
|
108,446
|
|
|
236,427
|
|
|
200,092
|
|
||||
Outside of North America
|
|
86,809
|
|
|
58,974
|
|
|
162,096
|
|
|
108,168
|
|
||||
|
|
$
|
723,500
|
|
|
$
|
581,054
|
|
|
$
|
1,373,206
|
|
|
$
|
1,101,361
|
|
•
|
Net revenue
increase
d
25%
to
$723.5 million
. On a constant dollar basis, net revenue
increased
24%
.
|
•
|
Total comparable sales, which includes comparable store sales and direct to consumer,
increased
20%
. On a constant dollar basis, total comparable sales
increased
19%
.
|
–
|
Comparable store sales
increased
10%
, or
increased
10%
on a constant dollar basis.
|
–
|
Direct to consumer net revenue
increased
48%
, or
increased
47%
on a constant dollar basis.
|
•
|
Gross profit
increase
d
33%
to
$396.2 million
. It increased
32%
compared to adjusted gross profit for the
second
quarter of fiscal
2017
.
|
•
|
Gross margin
increase
d
360
basis points to
54.8%
. It increased
320
basis points compared to adjusted gross margin for the
second
quarter of fiscal
2017
.
|
•
|
Income from operations
increase
d
95%
to
$134.2 million
. It increased
81%
compared to adjusted income from operations for the
second
quarter of fiscal
2017
.
|
•
|
Operating margin
increase
d
670
basis points to
18.5%
. It increased
570
basis points compared to adjusted operating margin for the
second
quarter of fiscal
2017
.
|
•
|
Income tax expense
increase
d
92%
to
$40.0 million
. Our effective tax rate for the
second
quarter of fiscal
2018
was
29.5%
compared to
29.9%
for the
second
quarter of fiscal
2017
. The adjusted effective tax rate was
29.6%
in the
second
quarter of fiscal
2017
.
|
•
|
Diluted earnings per share were
$0.71
compared to
$0.36
in the
second
quarter of fiscal
2017
. Adjusted diluted earnings per share were
$0.39
for the
second
quarter of fiscal
2017
.
|
|
|
Quarter Ended
|
||||||||||||
|
|
July 29, 2018
|
|
July 30, 2017
|
|
July 29, 2018
|
|
July 30, 2017
|
||||||
|
|
(In thousands)
|
|
(Percentages)
|
||||||||||
Net revenue
|
|
$
|
723,500
|
|
|
$
|
581,054
|
|
|
100.0
|
%
|
|
100.0
|
%
|
Cost of goods sold
|
|
327,306
|
|
|
283,632
|
|
|
45.2
|
|
|
48.8
|
|
||
Gross profit
|
|
396,194
|
|
|
297,422
|
|
|
54.8
|
|
|
51.2
|
|
||
Selling, general and administrative expenses
|
|
261,986
|
|
|
225,524
|
|
|
36.2
|
|
|
38.8
|
|
||
Asset impairment and restructuring costs
|
|
—
|
|
|
3,186
|
|
|
—
|
|
|
0.6
|
|
||
Income from operations
|
|
134,208
|
|
|
68,712
|
|
|
18.5
|
|
|
11.8
|
|
||
Other income (expense), net
|
|
1,591
|
|
|
812
|
|
|
0.2
|
|
|
0.2
|
|
||
Income before income tax expense
|
|
135,799
|
|
|
69,524
|
|
|
18.8
|
|
|
12.0
|
|
||
Income tax expense
|
|
40,029
|
|
|
20,813
|
|
|
5.5
|
|
|
3.6
|
|
||
Net income
|
|
$
|
95,770
|
|
|
$
|
48,711
|
|
|
13.2
|
%
|
|
8.4
|
%
|
|
|
Quarter Ended
|
||||||||||||
|
|
July 29, 2018
|
|
July 30, 2017
|
|
July 29, 2018
|
|
July 30, 2017
|
||||||
|
|
(In thousands)
|
|
(Percentages)
|
||||||||||
Company-operated stores
|
|
$
|
486,368
|
|
|
$
|
413,944
|
|
|
67.2
|
%
|
|
71.2
|
%
|
Direct to consumer
|
|
167,405
|
|
|
113,049
|
|
|
23.1
|
|
|
19.5
|
|
||
Other
|
|
69,727
|
|
|
54,061
|
|
|
9.6
|
|
|
9.3
|
|
||
Net revenue
|
|
$
|
723,500
|
|
|
$
|
581,054
|
|
|
100.0
|
%
|
|
100.0
|
%
|
•
|
Net revenue from company-operated stores we opened or significantly expanded subsequent to
July 30, 2017
, and therefore not included in comparable store sales, contributed
$50.6 million
to the
increase
. We opened
42
net new lululemon branded company-operated stores since the
second
quarter of fiscal
2017
, including
22
stores in North America,
12
stores in Asia,
six
stores in Europe, and
two
stores in Australia/New Zealand.
|
•
|
A comparable store sales
increase
of
10%
in the
second
quarter of fiscal
2018
compared to the
second
quarter of fiscal
2017
resulted in a
$35.7 million
increase
to net revenue. Comparable store sales
increased
10%
, or
$34.6 million
on a constant dollar basis. The
increase
in comparable store sales was primarily a result of increased store traffic, and due to improved conversion rates and increased dollar value per transaction.
|
•
|
an increase in product margin of 260 basis points, which was primarily due to lower product costs, a favorable mix of higher margin product, and lower markdowns;
|
•
|
a decrease in occupancy and depreciation costs as a percentage of revenue of 70 basis points;
|
•
|
a favorable impact of foreign exchange rates of 20 basis points; and
|
•
|
the costs incurred in the
second
quarter of fiscal 2017 in connection with the restructuring of our ivivva operations, which reduced gross margin in that quarter by 40 basis points.
|
•
|
an increase
in costs related to our operating channels of
$29.7 million
, comprised of:
|
–
|
an increase
in employee costs of
$14.6 million
primarily from a growth in labor hours and benefits, mainly associated with new company-operated stores and other new operating locations, and due to higher retail bonus expenses;
|
–
|
an increase
in variable costs of
$9.0 million
primarily due to an increase in distribution costs, credit card fees, and packaging costs as a result of increased net revenue; and
|
–
|
an increase
in other costs of
$6.1 million
primarily due to an increase in digital marketing expenses, brand and community costs, and other costs associated with our operating locations;
|
•
|
an increase
in head office costs of
$5.9 million
, comprised of:
|
–
|
an increase
in employee costs of
$3.6 million
primarily due to additional employees to support the growth in our business; and
|
–
|
an increase
in other costs of
$2.2 million
primarily due to increases in brand and community costs, information technology costs, and other head office costs; and
|
•
|
an increase
in net foreign exchange and derivative revaluation losses of
$0.9 million
. There were net foreign exchange and derivative revaluation losses of
$2.6 million
in the
second
quarter of fiscal
2018
compared to net foreign exchange and derivative revaluation losses of
$1.7 million
in the
second
quarter of fiscal
2017
. The net foreign exchange gains and losses primarily relate to the revaluation of U.S. dollar denominated monetary assets and liabilities held by Canadian subsidiaries. During the second quarter of fiscal 2017, we began entering into forward currency contracts designed to economically hedge these foreign exchange revaluation gains and losses.
|
|
|
Quarter Ended
|
||||||||||||
|
|
July 29, 2018
|
|
July 30, 2017
|
|
July 29, 2018
|
|
July 30, 2017
|
||||||
|
|
(In thousands)
|
|
(Percentage of segment revenue)
|
||||||||||
Segmented income from operations:
|
|
|
|
|
|
|
|
|
||||||
Company-operated stores
|
|
$
|
125,868
|
|
|
$
|
92,609
|
|
|
25.9
|
%
|
|
22.4
|
%
|
Direct to consumer
|
|
67,033
|
|
|
38,748
|
|
|
40.0
|
|
|
34.3
|
|
||
Other
|
|
13,094
|
|
|
6,952
|
|
|
18.8
|
|
|
12.9
|
|
||
|
|
205,995
|
|
|
138,309
|
|
|
|
|
|
||||
General corporate expense
|
|
71,787
|
|
|
64,167
|
|
|
|
|
|
||||
Restructuring and related costs
|
|
—
|
|
|
5,430
|
|
|
|
|
|
||||
Income from operations
|
|
$
|
134,208
|
|
|
$
|
68,712
|
|
|
|
|
|
|
|
Two Quarters Ended
|
||||||||||||
|
|
July 29, 2018
|
|
July 30, 2017
|
|
July 29, 2018
|
|
July 30, 2017
|
||||||
|
|
(In thousands)
|
|
(Percentages)
|
||||||||||
Net revenue
|
|
$
|
1,373,206
|
|
|
$
|
1,101,361
|
|
|
100.0
|
%
|
|
100.0
|
%
|
Cost of goods sold
|
|
632,279
|
|
|
547,044
|
|
|
46.0
|
|
|
49.7
|
|
||
Gross profit
|
|
740,927
|
|
|
554,317
|
|
|
54.0
|
|
|
50.3
|
|
||
Selling, general and administrative expenses
|
|
502,414
|
|
|
424,665
|
|
|
36.6
|
|
|
38.6
|
|
||
Asset impairment and restructuring costs
|
|
—
|
|
|
15,517
|
|
|
—
|
|
|
1.3
|
|
||
Income from operations
|
|
238,513
|
|
|
114,135
|
|
|
17.4
|
|
|
10.4
|
|
||
Other income (expense), net
|
|
4,509
|
|
|
1,719
|
|
|
0.3
|
|
|
0.1
|
|
||
Income before income tax expense
|
|
243,022
|
|
|
115,854
|
|
|
17.7
|
|
|
10.5
|
|
||
Income tax expense
|
|
72,099
|
|
|
35,897
|
|
|
5.3
|
|
|
3.2
|
|
||
Net income
|
|
$
|
170,923
|
|
|
$
|
79,957
|
|
|
12.4
|
%
|
|
7.3
|
%
|
|
|
Two Quarters Ended
|
||||||||||||
|
|
July 29, 2018
|
|
July 30, 2017
|
|
July 29, 2018
|
|
July 30, 2017
|
||||||
|
|
(In thousands)
|
|
(Percentages)
|
||||||||||
Company-operated stores
|
|
$
|
919,499
|
|
|
$
|
793,043
|
|
|
67.0
|
%
|
|
72.0
|
%
|
Direct to consumer
|
|
325,248
|
|
|
210,272
|
|
|
23.7
|
|
|
19.1
|
|
||
Other
|
|
128,459
|
|
|
98,046
|
|
|
9.3
|
|
|
8.9
|
|
||
Net revenue
|
|
$
|
1,373,206
|
|
|
$
|
1,101,361
|
|
|
100.0
|
%
|
|
100.0
|
%
|
•
|
Net revenue from company-operated stores we opened or significantly expanded subsequent to
July 30, 2017
, and therefore not included in comparable store sales, contributed
$93.2 million
to the increase. We opened
42
net new lululemon branded company-operated stores since the
second
quarter of fiscal
2017
, including
22
stores in North America,
12
stores in Asia,
six
stores in Europe, and
two
stores in Australia/New Zealand.
|
•
|
A comparable store sales
increase
of
9%
in the first
two quarters
of fiscal
2018
compared to the first
two quarters
of fiscal
2017
resulted in a
$58.6 million
increase
to net revenue. Comparable store sales
increased
8%
, or
$53.1 million
on a constant dollar basis. The
increase
in comparable store sales was primarily a result of increased store traffic and improved conversion rates.
|
•
|
an increase in product margin of 190 basis points, which was primarily due to lower product costs, a favorable mix of higher margin product, lower markdowns, and lower inventory provision expense;
|
•
|
a decrease in occupancy and depreciation costs as a percentage of revenue of 80 basis points;
|
•
|
a favorable impact of foreign exchange rates of 30 basis points; and
|
•
|
the costs incurred in the first
two quarters
of fiscal 2017 in connection with the restructuring of our ivivva operations, which reduced gross margin in that quarter by 70 basis points.
|
•
|
an increase
in costs related to our operating channels of
$52.2 million
, comprised of:
|
–
|
an increase
in employee costs of
$22.5 million
, primarily from a growth in labor hours and benefits, mainly associated with new company-operated stores and other new operating locations, and due to higher retail bonus expenses;
|
–
|
an increase
in variable costs of
$17.7 million
, primarily due to an increase in distribution costs, credit card fees, and packaging costs as a result of increased net revenue; and
|
–
|
an increase
in other costs of
$12.1 million
, primarily due to an increase in digital marketing expenses, brand and community costs, and other costs associated with our operating locations; and
|
•
|
an increase
in head office costs of
$18.4 million
, comprised of:
|
–
|
an increase
in employee costs of
$12.7 million
primarily due to additional employees to support the growth in our business; and
|
–
|
an increase
in other costs of
$5.7 million
primarily due to an increase in brand and community costs, depreciation, and information technology related costs, partially offset by a decrease in professional fees.
|
|
|
Two Quarters Ended
|
||||||||||||
|
|
July 29, 2018
|
|
July 30, 2017
|
|
July 29, 2018
|
|
July 30, 2017
|
||||||
|
|
(In thousands)
|
|
(Percentage of segment revenue)
|
||||||||||
Segmented income from operations:
|
|
|
|
|
|
|
|
|
||||||
Company-operated stores
|
|
$
|
225,155
|
|
|
$
|
170,139
|
|
|
24.5
|
%
|
|
21.5
|
%
|
Direct to consumer
|
|
129,300
|
|
|
72,846
|
|
|
39.8
|
|
|
34.6
|
|
||
Other
|
|
24,317
|
|
|
9,760
|
|
|
18.9
|
|
|
10.0
|
|
||
|
|
378,772
|
|
|
252,745
|
|
|
|
|
|
|
|
||
General corporate expense
|
|
140,259
|
|
|
115,430
|
|
|
|
|
|
|
|
||
Restructuring and related costs
|
|
—
|
|
|
23,180
|
|
|
|
|
|
||||
Income from operations
|
|
$
|
238,513
|
|
|
$
|
114,135
|
|
|
|
|
|
|
|
|
|
Quarter Ended
July 29, 2018 |
|
Two Quarters Ended
July 29, 2018 |
||||||||||
|
|
(In thousands)
|
|
(Percentages)
|
|
(In thousands)
|
|
(Percentages)
|
||||||
Change in net revenue
|
|
$
|
142,446
|
|
|
25
|
%
|
|
$
|
271,845
|
|
|
25
|
%
|
Adjustments due to foreign exchange rate changes
|
|
(2,751
|
)
|
|
(1
|
)
|
|
(11,892
|
)
|
|
(1
|
)
|
||
Change in net revenue in constant dollars
|
|
$
|
139,695
|
|
|
24
|
%
|
|
$
|
259,953
|
|
|
24
|
%
|
|
|
Quarter Ended
July 29, 2018 |
|
Two Quarters Ended
July 29, 2018 |
||
Change in total comparable sales
(1),(2)
|
|
20
|
%
|
|
20
|
%
|
Adjustments due to foreign exchange rate changes
|
|
(1
|
)
|
|
(1
|
)
|
Change in total comparable sales in constant dollars
(1),(2)
|
|
19
|
%
|
|
19
|
%
|
|
|
Quarter Ended
July 29, 2018 |
|
Two Quarters Ended
July 29, 2018 |
||||||||||
|
|
(In thousands)
|
|
(Percentages)
|
|
(In thousands)
|
|
(Percentages)
|
||||||
Change in comparable store sales
(2)
|
|
$
|
35,687
|
|
|
10
|
%
|
|
$
|
58,623
|
|
|
9
|
%
|
Adjustments due to foreign exchange rate changes
|
|
(1,131
|
)
|
|
—
|
|
|
(5,521
|
)
|
|
(1
|
)
|
||
Change in comparable store sales in constant dollars
(2)
|
|
$
|
34,556
|
|
|
10
|
%
|
|
$
|
53,102
|
|
|
8
|
%
|
|
|
Quarter Ended
July 29, 2018 |
|
Two Quarters Ended
July 29, 2018 |
||
Change in direct to consumer net revenue
|
|
48
|
%
|
|
55
|
%
|
Adjustments due to foreign exchange rate changes
|
|
(1
|
)
|
|
(2
|
)
|
Change in direct to consumer net revenue in constant dollars
|
|
47
|
%
|
|
53
|
%
|
(1)
|
Total comparable sales includes comparable store sales and direct to consumer sales.
|
(2)
|
Comparable store sales reflects net revenue from company-operated stores that have been open for at least 12 months, or open for at least 12 months after being significantly expanded.
|
|
|
Quarter Ended
July 29, 2018 |
|
Quarter Ended
July 30, 2017 |
||||||||||||||||||||
|
|
GAAP Results
|
|
Adjustments
|
|
Adjusted Results
(Non-GAAP) |
|
GAAP Results
|
|
Restructuring of ivivva Operations Adjustments
|
|
Adjusted Results
(Non-GAAP) |
||||||||||||
|
|
(In thousands, except per share amounts)
|
||||||||||||||||||||||
Gross profit
|
|
$
|
396,194
|
|
|
$
|
—
|
|
|
$
|
396,194
|
|
|
$
|
297,422
|
|
|
$
|
2,244
|
|
|
$
|
299,666
|
|
Gross margin
|
|
54.8
|
%
|
|
—
|
%
|
|
54.8
|
%
|
|
51.2
|
%
|
|
0.4
|
%
|
|
51.6
|
%
|
||||||
Income from operations
|
|
134,208
|
|
|
—
|
|
|
134,208
|
|
|
68,712
|
|
|
5,430
|
|
|
74,142
|
|
||||||
Operating margin
|
|
18.5
|
%
|
|
—
|
%
|
|
18.5
|
%
|
|
11.8
|
%
|
|
1.0
|
%
|
|
12.8
|
%
|
||||||
Income before income tax expense
|
|
135,799
|
|
|
—
|
|
|
135,799
|
|
|
69,524
|
|
|
5,430
|
|
|
74,954
|
|
||||||
Income tax expense
|
|
40,029
|
|
|
—
|
|
|
40,029
|
|
|
20,813
|
|
|
1,390
|
|
|
22,203
|
|
||||||
Effective tax rate
|
|
29.5
|
%
|
|
—
|
%
|
|
29.5
|
%
|
|
29.9
|
%
|
|
(0.3
|
)%
|
|
29.6
|
%
|
||||||
Diluted earnings per share
|
|
$
|
0.71
|
|
|
$
|
—
|
|
|
$
|
0.71
|
|
|
$
|
0.36
|
|
|
$
|
0.03
|
|
|
$
|
0.39
|
|
|
|
Two Quarters Ended
July 29, 2018 |
|
Two Quarters Ended
July 30, 2017 |
||||||||||||||||||||
|
|
GAAP Results
|
|
Adjustments
|
|
Adjusted Results
(Non-GAAP) |
|
GAAP Results
|
|
Restructuring of ivivva Operations Adjustments
|
|
Adjusted Results
(Non-GAAP)
|
||||||||||||
|
|
(In thousands, except per share amounts)
|
||||||||||||||||||||||
Gross profit
|
|
$
|
740,927
|
|
|
$
|
—
|
|
|
$
|
740,927
|
|
|
$
|
554,317
|
|
|
$
|
7,663
|
|
|
$
|
561,980
|
|
Gross margin
|
|
54.0
|
%
|
|
—
|
%
|
|
54.0
|
%
|
|
50.3
|
%
|
|
0.7
|
%
|
|
51.0
|
%
|
||||||
Income from operations
|
|
238,513
|
|
|
—
|
|
|
238,513
|
|
|
114,135
|
|
|
23,180
|
|
|
137,315
|
|
||||||
Operating margin
|
|
17.4
|
%
|
|
—
|
%
|
|
17.4
|
%
|
|
10.4
|
%
|
|
2.1
|
%
|
|
12.5
|
%
|
||||||
Income before income tax expense
|
|
243,022
|
|
|
—
|
|
|
243,022
|
|
|
115,854
|
|
|
23,180
|
|
|
139,034
|
|
||||||
Income tax expense
|
|
72,099
|
|
|
—
|
|
|
72,099
|
|
|
35,897
|
|
|
6,073
|
|
|
41,970
|
|
||||||
Effective tax rate
|
|
29.7
|
%
|
|
—
|
%
|
|
29.7
|
%
|
|
31.0
|
%
|
|
(0.8
|
)%
|
|
30.2
|
%
|
||||||
Diluted earnings per share
|
|
$
|
1.26
|
|
|
$
|
—
|
|
|
$
|
1.26
|
|
|
$
|
0.58
|
|
|
$
|
0.13
|
|
|
$
|
0.71
|
|
|
|
Two Quarters Ended
|
||||||
|
|
July 29, 2018
|
|
July 30, 2017
|
||||
|
|
(In thousands)
|
||||||
Total cash provided by (used in):
|
|
|
|
|
||||
Operating activities
|
|
$
|
210,026
|
|
|
$
|
102,038
|
|
Investing activities
|
|
(89,292
|
)
|
|
(49,889
|
)
|
||
Financing activities
|
|
(300,239
|
)
|
|
(91,910
|
)
|
||
Effect of exchange rate changes on cash
|
|
(33,155
|
)
|
|
26,127
|
|
||
Decrease in cash and cash equivalents
|
|
$
|
(212,660
|
)
|
|
$
|
(13,634
|
)
|
•
|
an
increase
of
$91.0 million
in net income, and an
increase
of
$10.0 million
in non-cash expenses primarily related to an increase in deferred income taxes, stock-based compensation, and depreciation, partially offset by a decrease in asset impairment costs related to the restructuring of our ivivva operations.
|
•
|
an
increase
of
$7.0 million
in the change in operating assets and liabilities, primarily due to the following:
|
–
|
an increase
of
$93.7 million
related to accounts payable, primarily due to a change in our payment terms;
|
–
|
partially offset by
an increase
of
$72.0 million
related to inventory, primarily due to an increase in inventory purchases, and a
decrease
of
$19.0 million
in income taxes.
|
|
|
July 29,
2018 |
|
January 28,
2018 |
||
United States
(1)
|
|
275
|
|
|
274
|
|
Canada
|
|
60
|
|
|
60
|
|
Australia
|
|
29
|
|
|
28
|
|
China
(2)
|
|
16
|
|
|
15
|
|
United Kingdom
|
|
11
|
|
|
9
|
|
New Zealand
|
|
6
|
|
|
6
|
|
Germany
|
|
4
|
|
|
2
|
|
Japan
|
|
4
|
|
|
2
|
|
South Korea
|
|
4
|
|
|
3
|
|
Singapore
|
|
3
|
|
|
3
|
|
Ireland
|
|
1
|
|
|
1
|
|
Sweden
|
|
1
|
|
|
—
|
|
Switzerland
|
|
1
|
|
|
1
|
|
Total company-operated stores
|
|
415
|
|
|
404
|
|
(1)
|
Included within the United States as of
January 28, 2018
, was
one
company-operated store in the Commonwealth of Puerto Rico. This store permanently closed during the second quarter of fiscal 2018.
|
(2)
|
Included within China as of
July 29, 2018
and
January 28, 2018
, were
three
company-operated stores in the Hong Kong Special Administrative Region and
one
company-operated store in the Taiwan Province.
|
•
|
the following impacts to the consolidated statements of operations:
|
–
|
an increase in our net revenue upon translation of the sales made by our Canadian operations into U.S. dollars for the purposes of consolidation;
|
–
|
an increase in our selling, general and administrative expenses incurred by our Canadian operations upon translation into U.S. dollars for the purposes of consolidation;
|
–
|
foreign exchange revaluation losses by our Canadian subsidiaries on U.S. dollar denominated monetary assets and liabilities; and
|
–
|
derivative valuation gains on forward currency contracts not designated in a hedging relationship;
|
•
|
the following impacts to the consolidated balance sheets:
|
–
|
an increase in the foreign currency translation adjustment which arises on the translation of our Canadian subsidiaries' balance sheets into U.S. dollars; and
|
–
|
a decrease in the foreign currency translation adjustment from derivative valuation losses on forward currency contracts, entered into as net investment hedges of a Canadian subsidiary.
|
•
|
political unrest, terrorism, labor disputes, and economic instability resulting in the disruption of trade from foreign countries in which our products are manufactured;
|
•
|
the imposition of new laws and regulations, including those relating to labor conditions, quality and safety standards, imports, duties, taxes and other charges on imports, as well as trade restrictions and restrictions on currency exchange or the transfer of funds;
|
•
|
reduced protection for intellectual property rights, including trademark protection, in some countries, particularly China;
|
•
|
disruptions or delays in shipments; and
|
•
|
changes in local economic conditions in countries where our manufacturers, suppliers, or guests are located.
|
•
|
identify suitable store locations, the availability of which is outside of our control;
|
•
|
negotiate acceptable lease terms, including desired tenant improvement allowances;
|
•
|
hire, train and retain store personnel and field management;
|
•
|
immerse new store personnel and field management into our corporate culture;
|
•
|
source sufficient inventory levels; and
|
•
|
successfully integrate new stores into our existing operations and information technology systems.
|
•
|
the classification of our board of directors into three classes, with one class elected each year;
|
•
|
prohibiting cumulative voting in the election of directors;
|
•
|
the ability of our board of directors to issue preferred stock without stockholder approval;
|
•
|
the ability to remove a director only for cause and only with the vote of the holders of at least 66 2/3% of our voting stock;
|
•
|
a special meeting of stockholders may only be called by our chairman or Chief Executive Officer, or upon a resolution adopted by an affirmative vote of a majority of the board of directors, and not by our stockholders;
|
•
|
prohibiting stockholder action by written consent; and
|
•
|
our stockholders must comply with advance notice procedures in order to nominate candidates for election to our board of directors or to place stockholder proposals on the agenda for consideration at any meeting of our stockholders.
|
Period
(1)
|
|
Total Number of Shares Purchased
(2)
|
|
Average Price Paid per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
(2)
|
|
Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
(2)
|
||||||
April 30, 2018 - May 27, 2018
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
198,999,583
|
|
May 28, 2018 - July 1, 2018
|
|
3,300,000
|
|
|
121.00
|
|
|
3,300,000
|
|
|
199,699,583
|
|
||
July 2, 2018 - July 29, 2018
|
|
55,122
|
|
|
125.85
|
|
|
55,122
|
|
|
192,762,533
|
|
||
Total
|
|
3,355,122
|
|
|
|
|
3,355,122
|
|
|
|
(1)
|
Monthly information is presented by reference to our fiscal periods during our
second
quarter of fiscal
2018
.
|
(2)
|
Our stock repurchase program was approved by our board of directors in November 2017 for the repurchase of up to $200 million common shares. In June 2018, our board of directors approved an increase to this stock repurchase program, authorizing the repurchase of up to a total of $600 million of our common shares on the open market or in privately negotiated transactions. Common shares repurchased on the open market are at prevailing market prices, including under plans complying with the provisions of Rule 10b5-1 and Rule 10b-18 of the Securities Exchange Act of 1934. The timing and actual number of common shares to be repurchased will depend upon market conditions, eligibility to trade, and other factors. The repurchases are expected to be completed by November 2019.
|
Period
(1)
|
|
Total Number of Shares Purchased
(2)
|
|
Average Price Paid per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
(2)
|
|
Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
(2)
|
|||||
April 30, 2018 - May 27, 2018
|
|
7,786
|
|
|
$
|
99.25
|
|
|
7,786
|
|
|
4,862,611
|
|
May 28, 2018 - July 1, 2018
|
|
9,843
|
|
|
124.49
|
|
|
9,843
|
|
|
4,852,768
|
|
|
July 2, 2018 - July 29, 2018
|
|
6,152
|
|
|
123.61
|
|
|
6,152
|
|
|
4,846,616
|
|
|
Total
|
|
23,781
|
|
|
|
|
23,781
|
|
|
|
(1)
|
Monthly information is presented by reference to our fiscal periods during our
second
quarter of fiscal
2018
.
|
(2)
|
Our Employee Share Purchase Plan (ESPP) was approved by our board of directors and stockholders in September 2007. All shares purchased under the ESPP are purchased on the Nasdaq Global Select Market (or such other stock exchange as we may designate from time to time). Unless our board of directors terminates the ESPP earlier, the ESPP will continue until all shares authorized for purchase under the ESPP have been purchased. The maximum number of shares authorized to be purchased under the ESPP is 6,000,000.
|
|
|
|
|
|
|
Incorporated by Reference
|
|||||||
Exhibit
No.
|
|
Exhibit Title
|
|
Filed
Herewith
|
|
Form
|
|
Exhibit
No.
|
|
File No.
|
|
Filing
Date
|
|
|
|
|
|
|
|
|
|||||||
3.1
|
|
|
X
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3.2
|
|
|
X
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.1
|
|
|
|
|
8-K
|
|
10.1
|
|
|
001-33608
|
|
6/6/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.2
|
|
|
|
|
8-K
|
|
10.1
|
|
|
001-33608
|
|
6/12/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.3*
|
|
|
|
|
8-K
|
|
10.1
|
|
|
001-33608
|
|
7/24/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31.1
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31.2
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32.1**
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101
|
|
The following unaudited interim consolidated financial statements from the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended July 29, 2018, formatted in XBRL: (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations and Comprehensive Income, (iii) Consolidated Statements of Stockholders' Equity, (iv) Consolidated Statements of Cash Flows (v) Notes to the Unaudited Interim Consolidated Financial Statements
|
|
X
|
|
|
|
|
|
|
|
|
|
*
|
Denotes a compensatory plan, contract, or arrangement, in which our directors or executive officers may participate.
|
**
|
Furnished herewith.
|
|
|
lululemon athletica inc.
|
|
|
|
By:
|
|
/s/ P
ATRICK
J. G
UIDO
|
|
|
Patrick J. Guido
|
|
|
Chief Financial Officer
|
|
|
(principal financial and accounting officer)
|
|
|
|
|
|
|
Incorporated by Reference
|
|||||||
Exhibit
No.
|
|
Exhibit Title
|
|
Filed
Herewith
|
|
Form
|
|
Exhibit
No.
|
|
File No.
|
|
Filing
Date
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3.1
|
|
Certificate of Amendment to Certificate of Incorporation filed July 20, 2017
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3.2
|
|
Certificate of Amendment to Certificate of Incorporation filed June 12, 2018
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.1
|
|
Amendment No. 1 to Credit Agreement, dated June 6, 2018, among lululemon athletica inc. and the other parties thereto
|
|
|
|
8-K
|
|
10.1
|
|
|
001-33608
|
|
6/6/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.2
|
|
Stock Repurchase Agreement, dated June 7, 2018, between lululemon athletica inc. and funds affiliated with Advent International Corporation
|
|
|
|
8-K
|
|
10.1
|
|
|
001-33608
|
|
6/12/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.3*
|
|
Executive Employment Agreement with Calvin McDonald, dated July 18, 2018
|
|
|
|
8-K
|
|
10.1
|
|
|
001-33608
|
|
7/24/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31.1
|
|
Certification of principal executive officer Pursuant to Exchange Act Rule 13a-14(a)
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
31.2
|
|
Certification of principal financial and accounting officer Pursuant to Exchange Act Rule 13a-14(a)
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32.1**
|
|
Certification of principal executive officer and principal financial and accounting officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101
|
|
The following unaudited interim consolidated financial statements from the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended July 29, 2018, formatted in XBRL: (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations and Comprehensive Income, (iii) Consolidated Statements of Stockholders' Equity, (iv) Consolidated Statements of Cash Flows (v) Notes to the Unaudited Interim Consolidated Financial Statements
|
|
X
|
|
|
|
|
|
|
|
|
*
|
Denotes a compensatory plan, contract, or arrangement, in which our directors or executive officers may participate.
|
**
|
Furnished herewith.
|
1.
|
The Corporation was originally incorporated in the State of Delaware under the name of Lulu Holding Inc. and the original certificate of incorporation was filed with the Secretary of State of the State of Delaware on November 21, 2005.
|
2.
|
This amendment to the certificate of incorporation of the Corporation has been declared advisable by the board of directors of the Corporation, duly adopted by the stockholders of the Corporation and duly executed and acknowledged by the officers of the Corporation in accordance with Sections 103, 242 and 245 of DGCL.
|
3.
|
Section 8.2.2 of the Corporation’s certificate of incorporation is hereby amended to remove the language indicated below by
strikeout
:
|
4.
|
This amendment will be effective on and as of the date of filing of this certificate of amendment with the Secretary of State of the State of Delaware.
|
|
lululemon athletica inc.
|
|
|
By:
|
/s/ LAURENT POTDEVIN
|
|
Name:
|
Laurent Potdevin
|
|
Title:
|
Chief Executive Officer
|
1.
|
The Corporation was originally incorporated in the State of Delaware under the name of Lulu Holding Inc. and the original certificate of incorporation was filed with the Secretary of State of the State of Delaware on November 21, 2005.
|
2.
|
This amendment to the certificate of incorporation of the Corporation has been declared advisable by the board of directors of the Corporation, duly adopted by the stockholders of the Corporation and duly executed and acknowledged by the officers of the Corporation in accordance with Sections 103, 242 and 245 of DGCL.
|
3.
|
The Corporation’s certificate of incorporation is hereby amended to add the following provision as Article XIII:
|
4.
|
This amendment will be effective on and as of the date of filing of this certificate of amendment with the Secretary of State of the State of Delaware.
|
|
lululemon athletica inc.
|
|
|
By:
|
/s/ PATRICK J. GUIDO
|
|
Name:
|
Patrick J. Guido
|
|
Title:
|
Chief Financial Officer
|
|
By:
|
|
/s/ G
LENN
M
URPHY
|
|
|
|
Glenn Murphy
|
|
|
|
Chairman of the Board
|
|
|
|
(principal executive officer)
|
|
By:
|
|
/s/
P
ATRICK
J. G
UIDO
|
|
|
|
Patrick J. Guido
|
|
|
|
Chief Financial Officer
|
|
|
|
(principal financial and accounting officer)
|
|
By:
|
|
/s/ G
LENN
M
URPHY
|
|
|
|
Glenn Murphy
|
|
|
|
Chairman of the Board
|
|
|
|
(principal executive officer)
|
|
By:
|
|
/s/ P
ATRICK
J. G
UIDO
|
|
|
|
Patrick J. Guido
|
|
|
|
Chief Financial Officer
|
|
|
|
(principal financial and accounting officer)
|