|
|
|
☑
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
Delaware
|
20-3842867
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
|
Title of each class
|
Trading symbol(s)
|
Name of each exchange on which registered
|
Common Stock, par value $0.005 per share
|
LULU
|
Nasdaq Global Select Market
|
Large Accelerated Filer
|
☑
|
Accelerated filer
|
☐
|
Non-accelerated filer
|
☐
|
Smaller reporting company
|
☐
|
Emerging growth company
|
☐
|
|
|
|
|
|
Page
|
|
|
|
Item 1.
|
||
|
||
|
||
|
||
|
||
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
|
|
|
|
|
|
Item 1.
|
||
Item 1A.
|
||
Item 2.
|
||
Item 5.
|
||
Item 6.
|
||
|
|
|
|
|
November 3,
2019 |
|
February 3,
2019 |
||||
ASSETS
|
||||||||
Current assets
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
586,153
|
|
|
$
|
881,320
|
|
Accounts receivable
|
|
35,744
|
|
|
35,786
|
|
||
Inventories
|
|
627,102
|
|
|
404,842
|
|
||
Prepaid and receivable income taxes
|
|
126,715
|
|
|
49,385
|
|
||
Other prepaid expenses and other current assets
|
|
75,962
|
|
|
57,949
|
|
||
|
|
1,451,676
|
|
|
1,429,282
|
|
||
Property and equipment, net
|
|
656,372
|
|
|
567,237
|
|
||
Right-of-use lease assets
|
|
652,492
|
|
|
—
|
|
||
Goodwill
|
|
24,478
|
|
|
24,239
|
|
||
Deferred income tax assets
|
|
26,339
|
|
|
26,549
|
|
||
Other non-current assets
|
|
43,787
|
|
|
37,404
|
|
||
|
|
$
|
2,855,144
|
|
|
$
|
2,084,711
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
||||
Current liabilities
|
|
|
|
|
||||
Accounts payable
|
|
$
|
116,281
|
|
|
$
|
95,533
|
|
Accrued inventory liabilities
|
|
10,074
|
|
|
16,241
|
|
||
Accrued compensation and related expenses
|
|
98,442
|
|
|
109,181
|
|
||
Current lease liabilities
|
|
131,385
|
|
|
—
|
|
||
Current income taxes payable
|
|
12,351
|
|
|
67,412
|
|
||
Unredeemed gift card liability
|
|
75,025
|
|
|
99,412
|
|
||
Other current liabilities
|
|
131,211
|
|
|
112,698
|
|
||
|
|
574,769
|
|
|
500,477
|
|
||
Non-current lease liabilities
|
|
563,925
|
|
|
—
|
|
||
Non-current income taxes payable
|
|
48,226
|
|
|
42,099
|
|
||
Deferred income tax liabilities
|
|
14,190
|
|
|
14,249
|
|
||
Other non-current liabilities
|
|
5,298
|
|
|
81,911
|
|
||
|
|
1,206,408
|
|
|
638,736
|
|
||
Commitments and contingencies
|
|
|
|
|
|
|
||
Stockholders' equity
|
|
|
|
|
||||
Undesignated preferred stock, $0.01 par value: 5,000 shares authorized; none issued and outstanding
|
|
—
|
|
|
—
|
|
||
Exchangeable stock, no par value: 60,000 shares authorized; 6,960 and 9,332 issued and outstanding
|
|
—
|
|
|
—
|
|
||
Special voting stock, $0.000005 par value: 60,000 shares authorized; 6,960 and 9,332 issued and outstanding
|
|
—
|
|
|
—
|
|
||
Common stock, $0.005 par value: 400,000 shares authorized; 123,336 and 121,600 issued and outstanding
|
|
617
|
|
|
608
|
|
||
Additional paid-in capital
|
|
343,335
|
|
|
315,285
|
|
||
Retained earnings
|
|
1,522,921
|
|
|
1,346,890
|
|
||
Accumulated other comprehensive loss
|
|
(218,137
|
)
|
|
(216,808
|
)
|
||
|
|
1,648,736
|
|
|
1,445,975
|
|
||
|
|
$
|
2,855,144
|
|
|
$
|
2,084,711
|
|
|
|
Quarter Ended
|
|
Three Quarters Ended
|
||||||||||||
|
|
November 3, 2019
|
|
October 28, 2018
|
|
November 3, 2019
|
|
October 28, 2018
|
||||||||
Net revenue
|
|
$
|
916,138
|
|
|
$
|
747,655
|
|
|
$
|
2,581,805
|
|
|
$
|
2,120,861
|
|
Cost of goods sold
|
|
411,094
|
|
|
340,878
|
|
|
1,169,245
|
|
|
973,157
|
|
||||
Gross profit
|
|
505,044
|
|
|
406,777
|
|
|
1,412,560
|
|
|
1,147,704
|
|
||||
Selling, general and administrative expenses
|
|
329,215
|
|
|
270,874
|
|
|
939,937
|
|
|
773,288
|
|
||||
Income from operations
|
|
175,829
|
|
|
135,903
|
|
|
472,623
|
|
|
374,416
|
|
||||
Other income (expense), net
|
|
1,925
|
|
|
2,044
|
|
|
6,154
|
|
|
6,553
|
|
||||
Income before income tax expense
|
|
177,754
|
|
|
137,947
|
|
|
478,777
|
|
|
380,969
|
|
||||
Income tax expense
|
|
51,772
|
|
|
43,534
|
|
|
131,202
|
|
|
115,633
|
|
||||
Net income
|
|
$
|
125,982
|
|
|
$
|
94,413
|
|
|
$
|
347,575
|
|
|
$
|
265,336
|
|
|
|
|
|
|
|
|
|
|
||||||||
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustment
|
|
9,880
|
|
|
(7,318
|
)
|
|
(1,329
|
)
|
|
(68,539
|
)
|
||||
Comprehensive income
|
|
$
|
135,862
|
|
|
$
|
87,095
|
|
|
$
|
346,246
|
|
|
$
|
196,797
|
|
|
|
|
|
|
|
|
|
|
||||||||
Basic earnings per share
|
|
$
|
0.97
|
|
|
$
|
0.71
|
|
|
$
|
2.67
|
|
|
$
|
1.98
|
|
Diluted earnings per share
|
|
$
|
0.96
|
|
|
$
|
0.71
|
|
|
$
|
2.65
|
|
|
$
|
1.97
|
|
Basic weighted-average number of shares outstanding
|
|
130,282
|
|
|
132,406
|
|
|
130,420
|
|
|
133,964
|
|
||||
Diluted weighted-average number of shares outstanding
|
|
130,805
|
|
|
133,077
|
|
|
130,975
|
|
|
134,512
|
|
|
|
Quarter Ended November 3, 2019
|
|||||||||||||||||||||||||||||||
|
|
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 August 4, 2019
|
|
7,381
|
|
|
7,381
|
|
|
$
|
—
|
|
|
122,921
|
|
|
$
|
615
|
|
|
$
|
329,915
|
|
|
$
|
1,404,866
|
|
|
$
|
(228,017
|
)
|
|
$
|
1,507,379
|
|
Net income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
125,982
|
|
|
|
|
125,982
|
|
|||||||||||||
Foreign currency translation adjustment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,880
|
|
|
9,880
|
|
|||||||||||||
Common stock issued upon exchange of exchangeable shares
|
|
(421
|
)
|
|
(421
|
)
|
|
—
|
|
|
421
|
|
|
2
|
|
|
(2
|
)
|
|
|
|
|
|
—
|
|
||||||||
Stock-based compensation expense
|
|
|
|
|
|
|
|
|
|
|
|
14,065
|
|
|
|
|
|
|
14,065
|
|
|||||||||||||
Common stock issued upon settlement of stock-based compensation
|
|
|
|
|
|
|
|
50
|
|
|
—
|
|
|
1,516
|
|
|
|
|
|
|
1,516
|
|
|||||||||||
Shares withheld related to net share settlement of stock-based compensation
|
|
|
|
|
|
|
|
(12
|
)
|
|
—
|
|
|
(2,093
|
)
|
|
|
|
|
|
(2,093
|
)
|
|||||||||||
Repurchase of common stock
|
|
|
|
|
|
|
|
(44
|
)
|
|
—
|
|
|
(66
|
)
|
|
(7,927
|
)
|
|
|
|
(7,993
|
)
|
||||||||||
Balance at November 3, 2019
|
|
6,960
|
|
|
6,960
|
|
|
$
|
—
|
|
|
123,336
|
|
|
$
|
617
|
|
|
$
|
343,335
|
|
|
$
|
1,522,921
|
|
|
$
|
(218,137
|
)
|
|
$
|
1,648,736
|
|
|
|
Quarter Ended October 28, 2018
|
|||||||||||||||||||||||||||||||
|
|
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 July 29, 2018
|
|
9,776
|
|
|
9,776
|
|
|
$
|
—
|
|
|
122,656
|
|
|
$
|
613
|
|
|
$
|
299,702
|
|
|
$
|
1,224,044
|
|
|
$
|
(204,144
|
)
|
|
$
|
1,320,215
|
|
Net income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
94,413
|
|
|
|
|
94,413
|
|
|||||||||||||
Foreign currency translation adjustment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(7,318
|
)
|
|
(7,318
|
)
|
|||||||||||||
Stock-based compensation expense
|
|
|
|
|
|
|
|
|
|
|
|
5,568
|
|
|
|
|
|
|
5,568
|
|
|||||||||||||
Common stock issued upon settlement of stock-based compensation
|
|
|
|
|
|
|
|
87
|
|
|
1
|
|
|
3,504
|
|
|
|
|
|
|
3,505
|
|
|||||||||||
Shares withheld related to net share settlement of stock-based compensation
|
|
|
|
|
|
|
|
(11
|
)
|
|
(1
|
)
|
|
(1,536
|
)
|
|
|
|
|
|
(1,537
|
)
|
|||||||||||
Repurchase of common stock
|
|
|
|
|
|
|
|
(65
|
)
|
|
—
|
|
|
(84
|
)
|
|
(8,005
|
)
|
|
|
|
(8,089
|
)
|
||||||||||
Balance at October 28, 2018
|
|
9,776
|
|
|
9,776
|
|
|
$
|
—
|
|
|
122,667
|
|
|
$
|
613
|
|
|
$
|
307,154
|
|
|
$
|
1,310,452
|
|
|
$
|
(211,462
|
)
|
|
$
|
1,406,757
|
|
|
|
Three Quarters Ended November 3, 2019
|
|||||||||||||||||||||||||||||||
|
|
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 February 3, 2019
|
|
9,332
|
|
|
9,332
|
|
|
$
|
—
|
|
|
121,600
|
|
|
$
|
608
|
|
|
$
|
315,285
|
|
|
$
|
1,346,890
|
|
|
$
|
(216,808
|
)
|
|
$
|
1,445,975
|
|
Net income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
347,575
|
|
|
|
|
347,575
|
|
|||||||||||||
Foreign currency translation adjustment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,329
|
)
|
|
(1,329
|
)
|
|||||||||||||
Common stock issued upon exchange of exchangeable shares
|
|
(2,372
|
)
|
|
(2,372
|
)
|
|
—
|
|
|
2,372
|
|
|
12
|
|
|
(12
|
)
|
|
|
|
|
|
—
|
|
||||||||
Stock-based compensation expense
|
|
|
|
|
|
|
|
|
|
|
|
36,070
|
|
|
|
|
|
|
36,070
|
|
|||||||||||||
Common stock issued upon settlement of stock-based compensation
|
|
|
|
|
|
|
|
547
|
|
|
3
|
|
|
15,027
|
|
|
|
|
|
|
15,030
|
|
|||||||||||
Shares withheld related to net share settlement of stock-based compensation
|
|
|
|
|
|
|
|
(129
|
)
|
|
(1
|
)
|
|
(21,492
|
)
|
|
|
|
|
|
(21,493
|
)
|
|||||||||||
Repurchase of common stock
|
|
|
|
|
|
|
|
(1,054
|
)
|
|
(5
|
)
|
|
(1,543
|
)
|
|
(171,544
|
)
|
|
|
|
(173,092
|
)
|
||||||||||
Balance at November 3, 2019
|
|
6,960
|
|
|
6,960
|
|
|
$
|
—
|
|
|
123,336
|
|
|
$
|
617
|
|
|
$
|
343,335
|
|
|
$
|
1,522,921
|
|
|
$
|
(218,137
|
)
|
|
$
|
1,648,736
|
|
|
|
Three Quarters Ended October 28, 2018
|
|||||||||||||||||||||||||||||||
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
265,336
|
|
|
|
|
265,336
|
|
|||||||||||||
Foreign currency translation adjustment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(68,539
|
)
|
|
(68,539
|
)
|
|||||||||||||
Common stock issued upon exchange of exchangeable shares
|
|
(5
|
)
|
|
(5
|
)
|
|
—
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
—
|
|
||||||||
Stock-based compensation expense
|
|
|
|
|
|
|
|
|
|
|
|
18,616
|
|
|
|
|
|
|
18,616
|
|
|||||||||||||
Common stock issued upon settlement of stock-based compensation
|
|
|
|
|
|
|
|
524
|
|
|
3
|
|
|
17,254
|
|
|
|
|
|
|
17,257
|
|
|||||||||||
Shares withheld related to net share settlement of stock-based compensation
|
|
|
|
|
|
|
|
(92
|
)
|
|
(1
|
)
|
|
(8,537
|
)
|
|
|
|
|
|
(8,538
|
)
|
|||||||||||
Repurchase of common stock
|
|
|
|
|
|
|
|
(3,420
|
)
|
|
(17
|
)
|
|
(4,432
|
)
|
|
(409,886
|
)
|
|
|
|
(414,335
|
)
|
||||||||||
Balance at October 28, 2018
|
|
9,776
|
|
|
9,776
|
|
|
$
|
—
|
|
|
122,667
|
|
|
$
|
613
|
|
|
$
|
307,154
|
|
|
$
|
1,310,452
|
|
|
$
|
(211,462
|
)
|
|
$
|
1,406,757
|
|
|
|
Three Quarters Ended
|
||||||
|
|
November 3, 2019
|
|
October 28, 2018
|
||||
Cash flows from operating activities
|
|
|
|
|
||||
Net income
|
|
$
|
347,575
|
|
|
$
|
265,336
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
||||
Depreciation and amortization
|
|
114,444
|
|
|
87,115
|
|
||
Stock-based compensation expense
|
|
36,070
|
|
|
18,616
|
|
||
Settlement of derivatives not designated in a hedging relationship
|
|
(3,375
|
)
|
|
(4,670
|
)
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
||||
Inventories
|
|
(225,124
|
)
|
|
(177,890
|
)
|
||
Prepaid and receivable income taxes
|
|
(77,330
|
)
|
|
(27,645
|
)
|
||
Other prepaid expenses and other current and non-current assets
|
|
(63,107
|
)
|
|
(18,402
|
)
|
||
Accounts payable
|
|
21,085
|
|
|
129,617
|
|
||
Accrued inventory liabilities
|
|
(5,940
|
)
|
|
(392
|
)
|
||
Accrued compensation and related expenses
|
|
(10,223
|
)
|
|
18,009
|
|
||
Current income taxes payable
|
|
(54,700
|
)
|
|
9,817
|
|
||
Unredeemed gift card liability
|
|
(24,183
|
)
|
|
(17,827
|
)
|
||
Non-current income taxes payable
|
|
6,127
|
|
|
5,844
|
|
||
Right-of-use lease assets and current and non-current lease liabilities
|
|
9,794
|
|
|
—
|
|
||
Other current and non-current liabilities
|
|
23,993
|
|
|
29,348
|
|
||
Net cash provided by operating activities
|
|
95,106
|
|
|
316,876
|
|
||
Cash flows from investing activities
|
|
|
|
|
||||
Purchase of property and equipment
|
|
(214,217
|
)
|
|
(156,746
|
)
|
||
Settlement of net investment hedges
|
|
3,378
|
|
|
(8,397
|
)
|
||
Other investing activities
|
|
(1,636
|
)
|
|
(771
|
)
|
||
Net cash used in investing activities
|
|
(212,475
|
)
|
|
(165,914
|
)
|
||
Cash flows from financing activities
|
|
|
|
|
||||
Proceeds from settlement of stock-based compensation
|
|
15,030
|
|
|
17,257
|
|
||
Taxes paid related to net share settlement of stock-based compensation
|
|
(21,493
|
)
|
|
(8,538
|
)
|
||
Repurchase of common stock
|
|
(173,092
|
)
|
|
(414,335
|
)
|
||
Other financing activities
|
|
—
|
|
|
(745
|
)
|
||
Net cash used in financing activities
|
|
(179,555
|
)
|
|
(406,361
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
|
1,757
|
|
|
(31,495
|
)
|
||
Decrease in cash and cash equivalents
|
|
(295,167
|
)
|
|
(286,894
|
)
|
||
Cash and cash equivalents, beginning of period
|
|
$
|
881,320
|
|
|
$
|
990,501
|
|
Cash and cash equivalents, end of period
|
|
$
|
586,153
|
|
|
$
|
703,607
|
|
Note 1
|
||
Note 2
|
||
Note 3
|
||
Note 4
|
||
Note 5
|
||
Note 6
|
||
Note 7
|
||
Note 8
|
||
Note 9
|
||
Note 10
|
||
Note 11
|
||
Note 12
|
|
|
Stock Options
|
|
Performance-Based Restricted Stock Units
|
|
Restricted Shares
|
|
Restricted Stock Units
|
|
Restricted Stock Units
(Liability Accounting)
|
|||||||||||||||||||||||||
|
|
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
|
|
Number
|
|
Weighted-Average Fair Value
|
|||||||||||||||
|
|
(In thousands, except per share amounts)
|
|||||||||||||||||||||||||||||||||
Balance at February 3, 2019
|
|
870
|
|
|
$
|
73.34
|
|
|
280
|
|
|
$
|
78.01
|
|
|
6
|
|
|
$
|
124.19
|
|
|
440
|
|
|
$
|
73.73
|
|
|
44
|
|
|
$
|
146.12
|
|
Granted
|
|
324
|
|
|
167.99
|
|
|
93
|
|
|
142.29
|
|
|
7
|
|
|
175.82
|
|
|
121
|
|
|
168.41
|
|
|
—
|
|
|
—
|
|
|||||
Exercised/released
|
|
247
|
|
|
60.95
|
|
|
97
|
|
|
72.04
|
|
|
6
|
|
|
124.19
|
|
|
182
|
|
|
70.38
|
|
|
15
|
|
|
179.67
|
|
|||||
Forfeited/expired
|
|
54
|
|
|
88.90
|
|
|
15
|
|
|
94.30
|
|
|
—
|
|
|
—
|
|
|
29
|
|
|
95.27
|
|
|
—
|
|
|
—
|
|
|||||
Balance at November 3, 2019
|
|
893
|
|
|
$
|
110.17
|
|
|
261
|
|
|
$
|
102.23
|
|
|
7
|
|
|
$
|
175.82
|
|
|
350
|
|
|
$
|
106.39
|
|
|
29
|
|
|
$
|
200.69
|
|
Exercisable at November 3, 2019
|
|
152
|
|
|
$
|
72.32
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Quarters Ended
November 3, 2019 |
|
Expected term
|
|
3.75 years
|
|
Expected volatility
|
|
38.43
|
%
|
Risk-free interest rate
|
|
2.19
|
%
|
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.
|
|
|
November 3, 2019
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Balance Sheet Classification
|
||||||||
|
|
(In thousands)
|
|
|
||||||||||||||
Money market funds
|
|
$
|
278,080
|
|
|
$
|
278,080
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Cash and cash equivalents
|
Treasury bills
|
|
26,619
|
|
|
26,619
|
|
|
—
|
|
|
—
|
|
|
Cash and cash equivalents
|
||||
Term deposits
|
|
66,736
|
|
|
—
|
|
|
66,736
|
|
|
—
|
|
|
Cash and cash equivalents
|
||||
Forward currency contract assets
|
|
2,934
|
|
|
—
|
|
|
2,934
|
|
|
—
|
|
|
Other prepaid expenses and other current assets
|
||||
Forward currency contract liabilities
|
|
3,964
|
|
|
—
|
|
|
3,964
|
|
|
—
|
|
|
Other current liabilities
|
|
|
February 3, 2019
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Balance Sheet Classification
|
||||||||
|
|
(In thousands)
|
|
|
||||||||||||||
Money market funds
|
|
$
|
471,888
|
|
|
$
|
471,888
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Cash and cash equivalents
|
Treasury bills
|
|
99,958
|
|
|
99,958
|
|
|
—
|
|
|
—
|
|
|
Cash and cash equivalents
|
||||
Term deposits
|
|
63,522
|
|
|
—
|
|
|
63,522
|
|
|
—
|
|
|
Cash and cash equivalents
|
||||
Forward currency contract assets
|
|
516
|
|
|
—
|
|
|
516
|
|
|
—
|
|
|
Other prepaid expenses and other current assets
|
||||
Forward currency contract liabilities
|
|
1,042
|
|
|
—
|
|
|
1,042
|
|
|
—
|
|
|
Other current liabilities
|
|
|
November 3, 2019
|
|
February 3, 2019
|
||||||||||||||||||||
|
|
Gross Notional
|
|
Assets
|
|
Liabilities
|
|
Gross Notional
|
|
Assets
|
|
Liabilities
|
||||||||||||
|
|
(In thousands)
|
||||||||||||||||||||||
Derivatives designated as net investment hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Forward currency contracts
|
|
$
|
196,000
|
|
|
$
|
—
|
|
|
$
|
3,317
|
|
|
$
|
328,000
|
|
|
$
|
—
|
|
|
$
|
1,042
|
|
Derivatives not designated in a hedging relationship:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Forward currency contracts
|
|
241,000
|
|
|
2,934
|
|
|
647
|
|
|
309,000
|
|
|
516
|
|
|
—
|
|
||||||
Net derivatives recognized on consolidated balance sheets:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Forward currency contracts
|
|
|
|
$
|
2,934
|
|
|
$
|
3,964
|
|
|
|
|
$
|
516
|
|
|
$
|
1,042
|
|
|
|
Quarter Ended
|
|
Three Quarters Ended
|
||||||||||||
|
|
November 3, 2019
|
|
October 28, 2018
|
|
November 3, 2019
|
|
October 28, 2018
|
||||||||
|
|
(In thousands)
|
||||||||||||||
(Losses) gains recognized in foreign currency translation adjustment:
|
|
|
|
|
|
|
|
|
||||||||
Derivatives designated as net investment hedges
|
|
$
|
(839
|
)
|
|
$
|
2,291
|
|
|
$
|
1,103
|
|
|
$
|
18,829
|
|
|
|
Quarter Ended
|
|
Three Quarters Ended
|
||||||||||||
|
|
November 3, 2019
|
|
October 28, 2018
|
|
November 3, 2019
|
|
October 28, 2018
|
||||||||
|
|
(In thousands)
|
||||||||||||||
(Losses) gains recognized in selling, general and administrative expenses:
|
|
|
|
|
|
|
|
|
||||||||
Foreign exchange (losses) gains
|
|
$
|
(2,945
|
)
|
|
$
|
395
|
|
|
$
|
(1,700
|
)
|
|
$
|
12,999
|
|
Derivatives not designated in a hedging relationship
|
|
(94
|
)
|
|
(1,715
|
)
|
|
(1,603
|
)
|
|
(17,301
|
)
|
||||
Net foreign exchange and derivative (losses) gains
|
|
$
|
(3,039
|
)
|
|
$
|
(1,320
|
)
|
|
$
|
(3,303
|
)
|
|
$
|
(4,302
|
)
|
|
|
Quarter Ended
|
|
Three Quarters Ended
|
||||
|
|
November 3, 2019
|
|
November 3, 2019
|
||||
|
|
(In thousands)
|
||||||
Net lease expense:
|
|
|
|
|
||||
Operating lease expense
|
|
$
|
44,497
|
|
|
$
|
130,171
|
|
Short-term lease expense
|
|
2,680
|
|
|
6,996
|
|
||
Variable lease expense
|
|
17,972
|
|
|
51,661
|
|
||
|
|
$
|
65,149
|
|
|
$
|
188,828
|
|
|
|
November 3, 2019
|
||
|
|
(In thousands)
|
||
Final quarter of fiscal 2019
|
|
$
|
39,438
|
|
2020
|
|
144,260
|
|
|
2021
|
|
148,987
|
|
|
2022
|
|
123,962
|
|
|
2023
|
|
97,445
|
|
|
After 2024
|
|
225,243
|
|
|
Future minimum lease payments
|
|
$
|
779,335
|
|
Impact of discounting
|
|
(84,025
|
)
|
|
Present value of lease liabilities
|
|
$
|
695,310
|
|
|
|
|
||
Balance sheet classification:
|
|
|
||
Current lease liabilities
|
|
$
|
131,385
|
|
Non-current lease liabilities
|
|
563,925
|
|
|
|
|
$
|
695,310
|
|
|
|
November 3, 2019
|
|
Weighted-average remaining lease term
|
|
6.02 years
|
|
Weighted-average discount rate
|
|
3.69
|
%
|
|
|
Quarter Ended
|
|
Three Quarters Ended
|
||||
|
|
November 3, 2019
|
|
November 3, 2019
|
||||
|
|
(In thousands)
|
||||||
Cash paid for amounts included in the measurement of lease liabilities
|
|
$
|
44,398
|
|
|
$
|
129,071
|
|
Leased assets obtained in exchange for new operating lease liabilities
|
|
35,902
|
|
|
143,776
|
|
|
|
Quarter Ended
|
|
Three Quarters Ended
|
||||
|
|
October 28, 2018
|
|
October 28, 2018
|
||||
|
|
(In thousands)
|
||||||
Total rent expense:
|
|
|
|
|
||||
Minimum rent expense
|
|
$
|
42,514
|
|
|
$
|
119,123
|
|
Common area expenses
|
|
6,161
|
|
|
16,831
|
|
||
Rent contingent on sales
|
|
2,772
|
|
|
9,244
|
|
||
|
|
$
|
51,447
|
|
|
$
|
145,198
|
|
|
|
|
|
|
||||
Property taxes for leased locations
|
|
$
|
4,401
|
|
|
$
|
12,817
|
|
|
|
Payments Due by Fiscal Year
|
||||||||||||||||||||||||||
|
|
Total
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
Thereafter
|
||||||||||||||
|
|
(In thousands)
|
||||||||||||||||||||||||||
Operating leases (minimum rent)
|
|
$
|
783,913
|
|
|
$
|
169,822
|
|
|
$
|
147,541
|
|
|
$
|
123,032
|
|
|
$
|
99,471
|
|
|
$
|
73,213
|
|
|
$
|
170,834
|
|
|
|
Quarter Ended
|
|
Three Quarters Ended
|
||||||||||||
|
|
November 3, 2019
|
|
October 28, 2018
|
|
November 3, 2019
|
|
October 28, 2018
|
||||||||
|
|
(In thousands, except per share amounts)
|
||||||||||||||
Net income
|
|
$
|
125,982
|
|
|
$
|
94,413
|
|
|
$
|
347,575
|
|
|
$
|
265,336
|
|
Basic weighted-average number of shares outstanding
|
|
130,282
|
|
|
132,406
|
|
|
130,420
|
|
|
133,964
|
|
||||
Assumed conversion of dilutive stock options and awards
|
|
523
|
|
|
671
|
|
|
555
|
|
|
548
|
|
||||
Diluted weighted-average number of shares outstanding
|
|
130,805
|
|
|
133,077
|
|
|
130,975
|
|
|
134,512
|
|
||||
Basic earnings per share
|
|
$
|
0.97
|
|
|
$
|
0.71
|
|
|
$
|
2.67
|
|
|
$
|
1.98
|
|
Diluted earnings per share
|
|
$
|
0.96
|
|
|
$
|
0.71
|
|
|
$
|
2.65
|
|
|
$
|
1.97
|
|
|
|
November 3,
2019 |
|
February 3,
2019 |
||||
|
|
(In thousands)
|
||||||
Inventories:
|
|
|
|
|
||||
Finished goods
|
|
$
|
652,838
|
|
|
$
|
420,931
|
|
Provision to reduce inventories to net realizable value
|
|
(25,736
|
)
|
|
(16,089
|
)
|
||
|
|
$
|
627,102
|
|
|
$
|
404,842
|
|
|
|
November 3,
2019 |
|
February 3,
2019 |
||||
|
|
(In thousands)
|
||||||
Property and equipment, net:
|
|
|
|
|
||||
Land
|
|
$
|
72,225
|
|
|
$
|
78,636
|
|
Buildings
|
|
30,298
|
|
|
38,030
|
|
||
Leasehold improvements
|
|
442,796
|
|
|
362,571
|
|
||
Furniture and fixtures
|
|
105,593
|
|
|
103,733
|
|
||
Computer hardware
|
|
90,414
|
|
|
69,542
|
|
||
Computer software
|
|
311,475
|
|
|
230,689
|
|
||
Equipment and vehicles
|
|
19,365
|
|
|
15,009
|
|
||
Work in progress
|
|
73,332
|
|
|
74,271
|
|
||
Property and equipment, gross
|
|
1,145,498
|
|
|
972,481
|
|
||
Accumulated depreciation
|
|
(489,126
|
)
|
|
(405,244
|
)
|
||
|
|
$
|
656,372
|
|
|
$
|
567,237
|
|
Other non-current assets:
|
|
|
|
|
||||
Security deposits
|
|
$
|
18,766
|
|
|
$
|
15,793
|
|
Cloud computing arrangement implementation costs
|
|
14,237
|
|
|
2,395
|
|
||
Deferred lease assets
|
|
—
|
|
|
9,286
|
|
||
Other
|
|
10,784
|
|
|
9,930
|
|
||
|
|
$
|
43,787
|
|
|
$
|
37,404
|
|
Other current liabilities:
|
|
|
|
|
||||
Accrued duty, freight, and other operating expenses
|
|
$
|
71,913
|
|
|
$
|
49,945
|
|
Sales tax collected
|
|
13,193
|
|
|
16,091
|
|
||
Accrued capital expenditures
|
|
10,621
|
|
|
11,295
|
|
||
Deferred revenue
|
|
10,427
|
|
|
8,045
|
|
||
Sales return allowances
|
|
8,858
|
|
|
11,318
|
|
||
Accrued rent
|
|
7,114
|
|
|
7,331
|
|
||
Forward currency contract liabilities
|
|
3,964
|
|
|
1,042
|
|
||
Lease termination liabilities
|
|
314
|
|
|
2,293
|
|
||
Other
|
|
4,807
|
|
|
5,338
|
|
||
|
|
$
|
131,211
|
|
|
$
|
112,698
|
|
Other non-current liabilities:
|
|
|
|
|
||||
Tenant inducements
|
|
$
|
—
|
|
|
$
|
42,138
|
|
Deferred lease liabilities
|
|
—
|
|
|
33,406
|
|
||
Other
|
|
5,298
|
|
|
6,367
|
|
||
|
|
$
|
5,298
|
|
|
$
|
81,911
|
|
|
|
Quarter Ended
|
|
Three Quarters Ended
|
||||||||||||
|
|
November 3, 2019
|
|
October 28, 2018
|
|
November 3, 2019
|
|
October 28, 2018
|
||||||||
|
|
(In thousands)
|
||||||||||||||
Net revenue:
|
|
|
|
|
|
|
|
|
||||||||
Company-operated stores
|
|
$
|
579,521
|
|
|
$
|
476,877
|
|
|
$
|
1,669,699
|
|
|
$
|
1,396,376
|
|
Direct to consumer
|
|
246,697
|
|
|
189,375
|
|
|
674,177
|
|
|
514,623
|
|
||||
Other
|
|
89,920
|
|
|
81,403
|
|
|
237,929
|
|
|
209,862
|
|
||||
|
|
$
|
916,138
|
|
|
$
|
747,655
|
|
|
$
|
2,581,805
|
|
|
$
|
2,120,861
|
|
Segmented income from operations:
|
|
|
|
|
|
|
|
|
||||||||
Company-operated stores
|
|
$
|
147,734
|
|
|
$
|
117,804
|
|
|
$
|
422,973
|
|
|
$
|
342,959
|
|
Direct to consumer
|
|
103,282
|
|
|
76,435
|
|
|
268,038
|
|
|
205,735
|
|
||||
Other
|
|
16,944
|
|
|
15,019
|
|
|
46,196
|
|
|
39,336
|
|
||||
|
|
267,960
|
|
|
209,258
|
|
|
737,207
|
|
|
588,030
|
|
||||
General corporate expense
|
|
92,131
|
|
|
73,355
|
|
|
264,584
|
|
|
213,614
|
|
||||
Income from operations
|
|
175,829
|
|
|
135,903
|
|
|
472,623
|
|
|
374,416
|
|
||||
Other income (expense), net
|
|
1,925
|
|
|
2,044
|
|
|
6,154
|
|
|
6,553
|
|
||||
Income before income tax expense
|
|
$
|
177,754
|
|
|
$
|
137,947
|
|
|
$
|
478,777
|
|
|
$
|
380,969
|
|
|
|
|
|
|
|
|
|
|
||||||||
Capital expenditures:
|
|
|
|
|
|
|
|
|
||||||||
Company-operated stores
|
|
$
|
47,939
|
|
|
$
|
38,053
|
|
|
$
|
128,675
|
|
|
$
|
85,054
|
|
Direct to consumer
|
|
1,165
|
|
|
540
|
|
|
14,975
|
|
|
1,854
|
|
||||
Corporate and other
|
|
29,349
|
|
|
34,146
|
|
|
70,567
|
|
|
69,838
|
|
||||
|
|
$
|
78,453
|
|
|
$
|
72,739
|
|
|
$
|
214,217
|
|
|
$
|
156,746
|
|
Depreciation and amortization:
|
|
|
|
|
|
|
|
|
||||||||
Company-operated stores
|
|
$
|
26,434
|
|
|
$
|
19,383
|
|
|
$
|
71,206
|
|
|
$
|
54,954
|
|
Direct to consumer
|
|
3,498
|
|
|
2,336
|
|
|
8,930
|
|
|
7,237
|
|
||||
Corporate and other
|
|
14,090
|
|
|
9,967
|
|
|
34,308
|
|
|
24,924
|
|
||||
|
|
$
|
44,022
|
|
|
$
|
31,686
|
|
|
$
|
114,444
|
|
|
$
|
87,115
|
|
|
|
Quarter Ended
|
|
Three Quarters Ended
|
||||||||||||
|
|
November 3, 2019
|
|
October 28, 2018
|
|
November 3, 2019
|
|
October 28, 2018
|
||||||||
|
|
(In thousands)
|
||||||||||||||
United States
|
|
$
|
645,600
|
|
|
$
|
527,331
|
|
|
$
|
1,821,090
|
|
|
$
|
1,502,013
|
|
Canada
|
|
159,552
|
|
|
137,991
|
|
|
428,802
|
|
|
374,418
|
|
||||
Outside of North America
|
|
110,986
|
|
|
82,333
|
|
|
331,913
|
|
|
244,430
|
|
||||
|
|
$
|
916,138
|
|
|
$
|
747,655
|
|
|
$
|
2,581,805
|
|
|
$
|
2,120,861
|
|
•
|
Net revenue increased 23% to $916.1 million. On a constant dollar basis, net revenue increased 23%.
|
•
|
Total comparable sales, which includes comparable store sales and direct to consumer, increased 16%. On a constant dollar basis, total comparable sales increased 17%.
|
–
|
Comparable store sales increased 10%, or increased 11% on a constant dollar basis.
|
–
|
Direct to consumer net revenue increased 29%, or increased 30% on a constant dollar basis.
|
•
|
Gross profit increased 24% to $505.0 million.
|
•
|
Gross margin increased 70 basis points to 55.1%.
|
•
|
Income from operations increased 29% to $175.8 million.
|
•
|
Operating margin increased 100 basis points to 19.2%.
|
•
|
Income tax expense increased 19% to $51.8 million. Our effective tax rate for the third quarter of fiscal 2019 was 29.1% compared to 31.6% for the third quarter of fiscal 2018. The adjusted effective tax rate for the third quarter of fiscal 2018 was 27.8%.
|
•
|
Diluted earnings per share were $0.96 compared to $0.71 in the third quarter of fiscal 2018. Adjusted diluted earnings per share for the third quarter of fiscal 2018 were $0.75.
|
|
|
Quarter Ended
|
||||||||||||
|
|
November 3, 2019
|
|
October 28, 2018
|
|
November 3, 2019
|
|
October 28, 2018
|
||||||
|
|
(In thousands)
|
|
(Percentages)
|
||||||||||
Net revenue
|
|
$
|
916,138
|
|
|
$
|
747,655
|
|
|
100.0
|
%
|
|
100.0
|
%
|
Cost of goods sold
|
|
411,094
|
|
|
340,878
|
|
|
44.9
|
|
|
45.6
|
|
||
Gross profit
|
|
505,044
|
|
|
406,777
|
|
|
55.1
|
|
|
54.4
|
|
||
Selling, general and administrative expenses
|
|
329,215
|
|
|
270,874
|
|
|
35.9
|
|
|
36.2
|
|
||
Income from operations
|
|
175,829
|
|
|
135,903
|
|
|
19.2
|
|
|
18.2
|
|
||
Other income (expense), net
|
|
1,925
|
|
|
2,044
|
|
|
0.2
|
|
|
0.3
|
|
||
Income before income tax expense
|
|
177,754
|
|
|
137,947
|
|
|
19.4
|
|
|
18.5
|
|
||
Income tax expense
|
|
51,772
|
|
|
43,534
|
|
|
5.7
|
|
|
5.8
|
|
||
Net income
|
|
$
|
125,982
|
|
|
$
|
94,413
|
|
|
13.8
|
%
|
|
12.6
|
%
|
|
|
Quarter Ended
|
||||||||||||
|
|
November 3, 2019
|
|
October 28, 2018
|
|
November 3, 2019
|
|
October 28, 2018
|
||||||
|
|
(In thousands)
|
|
(Percentages)
|
||||||||||
Company-operated stores
|
|
$
|
579,521
|
|
|
$
|
476,877
|
|
|
63.3
|
%
|
|
63.8
|
%
|
Direct to consumer
|
|
246,697
|
|
|
189,375
|
|
|
26.9
|
|
|
25.3
|
|
||
Other
|
|
89,920
|
|
|
81,403
|
|
|
9.8
|
|
|
10.9
|
|
||
Net revenue
|
|
$
|
916,138
|
|
|
$
|
747,655
|
|
|
100.0
|
%
|
|
100.0
|
%
|
•
|
Net revenue from company-operated stores we opened or significantly expanded subsequent to October 28, 2018 contributed $61.1 million to the increase. We opened 53 net new company-operated stores since the third quarter of fiscal 2018, including 22 stores in Asia, 21 stores in North America, seven stores in Europe, and three stores in Australia/New Zealand.
|
•
|
Based on a shifted calendar, a comparable store sales increase of 10% in the third quarter of fiscal 2019 compared to the third quarter of fiscal 2018. Comparable store sales increased 11% on a constant dollar basis. The increase in comparable store sales was primarily a result of increased store traffic.
|
•
|
an increase in product margin of 120 basis points which was primarily due to lower product costs, a favorable mix of higher margin product, and lower markdowns; and
|
•
|
a decrease in occupancy and depreciation costs as a percentage of revenue of 10 basis points.
|
•
|
an increase in costs related to our operating channels of $34.0 million, comprised of:
|
–
|
an increase in employee costs of $17.8 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 incentive compensation expenses;
|
–
|
an increase in variable costs of $12.0 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 $4.2 million primarily due to increases in digital marketing expenses, information technology costs, and other costs associated with our operating locations;
|
•
|
an increase in head office costs of $22.7 million, comprised of:
|
–
|
an increase in employee costs of $14.2 million due to increased incentive and stock-based compensation expense and due to increased wages, primarily from additional employees to support the growth in our business; and
|
–
|
an increase in other costs of $8.4 million primarily due to increases in depreciation, information technology costs, and other head office costs; and
|
•
|
an increase in net foreign exchange and derivative revaluation losses of $1.7 million.
|
|
|
Quarter Ended
|
||||||||||||
|
|
November 3, 2019
|
|
October 28, 2018
|
|
November 3, 2019
|
|
October 28, 2018
|
||||||
|
|
(In thousands)
|
|
(Percentage of segment revenue)
|
||||||||||
Segmented income from operations:
|
|
|
|
|
|
|
|
|
||||||
Company-operated stores
|
|
$
|
147,734
|
|
|
$
|
117,804
|
|
|
25.5
|
%
|
|
24.7
|
%
|
Direct to consumer
|
|
103,282
|
|
|
76,435
|
|
|
41.9
|
|
|
40.4
|
|
||
Other
|
|
16,944
|
|
|
15,019
|
|
|
18.8
|
|
|
18.5
|
|
||
|
|
267,960
|
|
|
209,258
|
|
|
|
|
|
||||
General corporate expense
|
|
92,131
|
|
|
73,355
|
|
|
|
|
|
||||
Income from operations
|
|
$
|
175,829
|
|
|
$
|
135,903
|
|
|
|
|
|
|
|
Three Quarters Ended
|
||||||||||||
|
|
November 3, 2019
|
|
October 28, 2018
|
|
November 3, 2019
|
|
October 28, 2018
|
||||||
|
|
(In thousands)
|
|
(Percentages)
|
||||||||||
Net revenue
|
|
$
|
2,581,805
|
|
|
$
|
2,120,861
|
|
|
100.0
|
%
|
|
100.0
|
%
|
Cost of goods sold
|
|
1,169,245
|
|
|
973,157
|
|
|
45.3
|
|
|
45.9
|
|
||
Gross profit
|
|
1,412,560
|
|
|
1,147,704
|
|
|
54.7
|
|
|
54.1
|
|
||
Selling, general and administrative expenses
|
|
939,937
|
|
|
773,288
|
|
|
36.4
|
|
|
36.5
|
|
||
Income from operations
|
|
472,623
|
|
|
374,416
|
|
|
18.3
|
|
|
17.7
|
|
||
Other income (expense), net
|
|
6,154
|
|
|
6,553
|
|
|
0.2
|
|
|
0.3
|
|
||
Income before income tax expense
|
|
478,777
|
|
|
380,969
|
|
|
18.5
|
|
|
18.0
|
|
||
Income tax expense
|
|
131,202
|
|
|
115,633
|
|
|
5.1
|
|
|
5.5
|
|
||
Net income
|
|
$
|
347,575
|
|
|
$
|
265,336
|
|
|
13.5
|
%
|
|
12.5
|
%
|
|
|
Three Quarters Ended
|
||||||||||||
|
|
November 3, 2019
|
|
October 28, 2018
|
|
November 3, 2019
|
|
October 28, 2018
|
||||||
|
|
(In thousands)
|
|
(Percentages)
|
||||||||||
Company-operated stores
|
|
$
|
1,669,699
|
|
|
$
|
1,396,376
|
|
|
64.7
|
%
|
|
65.8
|
%
|
Direct to consumer
|
|
674,177
|
|
|
514,623
|
|
|
26.1
|
|
|
24.3
|
|
||
Other
|
|
237,929
|
|
|
209,862
|
|
|
9.2
|
|
|
9.9
|
|
||
Net revenue
|
|
$
|
2,581,805
|
|
|
$
|
2,120,861
|
|
|
100.0
|
%
|
|
100.0
|
%
|
•
|
Net revenue from company-operated stores we opened or significantly expanded subsequent to October 28, 2018 contributed $161.2 million to the increase. We opened 53 net new company-operated stores since the third quarter of fiscal 2018, including 22 stores in Asia, 21 stores in North America, seven stores in Europe, and three stores in Australia/New Zealand.
|
•
|
Based on a shifted calendar, a comparable store sales increase of 9% in the first three quarters of fiscal 2019 compared to the first three quarters of fiscal 2018. Comparable store sales increased 10% on a constant dollar basis. The increase in comparable store sales was primarily a result of increased store traffic.
|
•
|
an increase in costs related to our operating channels of $99.4 million, comprised of:
|
–
|
an increase in employee costs of $52.1 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 incentive compensation expenses;
|
–
|
an increase in variable costs of $30.1 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 $17.1 million primarily due to an increase in digital marketing expenses, information technology costs, security costs, repairs and maintenance costs, and other costs associated with our operating locations;
|
•
|
an increase in head office costs of $68.3 million, comprised of:
|
–
|
an increase in employee costs of $41.6 million primarily due to increased incentive and stock-based compensation expense, increased wages, and increased travel expenses, primarily from additional employees to support the growth in our business; and
|
–
|
an increase in other costs of $26.6 million primarily due to an increase in depreciation, professional fees, information technology costs, brand and community costs, and other head office costs.
|
|
|
Three Quarters Ended
|
||||||||||||
|
|
November 3, 2019
|
|
October 28, 2018
|
|
November 3, 2019
|
|
October 28, 2018
|
||||||
|
|
(In thousands)
|
|
(Percentage of segment revenue)
|
||||||||||
Segmented income from operations:
|
|
|
|
|
|
|
|
|
||||||
Company-operated stores
|
|
$
|
422,973
|
|
|
$
|
342,959
|
|
|
25.3
|
%
|
|
24.6
|
%
|
Direct to consumer
|
|
268,038
|
|
|
205,735
|
|
|
39.8
|
|
|
40.0
|
|
||
Other
|
|
46,196
|
|
|
39,336
|
|
|
19.4
|
|
|
18.7
|
|
||
|
|
737,207
|
|
|
588,030
|
|
|
|
|
|
|
|
||
General corporate expense
|
|
264,584
|
|
|
213,614
|
|
|
|
|
|
|
|
||
Income from operations
|
|
$
|
472,623
|
|
|
$
|
374,416
|
|
|
|
|
|
|
|
|
|
Quarter Ended
November 3, 2019 |
|
Three Quarters Ended
November 3, 2019 |
||||||||||
|
|
(In thousands)
|
|
(Percentages)
|
|
(In thousands)
|
|
(Percentages)
|
||||||
Change
|
|
$
|
168,483
|
|
|
23
|
%
|
|
$
|
460,944
|
|
|
22
|
%
|
Adjustments due to foreign exchange rate changes
|
|
6,776
|
|
|
—
|
|
|
27,744
|
|
|
1
|
|
||
Change in constant dollars
|
|
$
|
175,259
|
|
|
23
|
%
|
|
$
|
488,688
|
|
|
23
|
%
|
|
|
Quarter Ended
November 3, 2019 |
|
Three Quarters Ended
November 3, 2019 |
||||||||||||||
|
|
Total Comparable Sales1,2
|
|
Comparable Store Sales2
|
|
Direct to Consumer Net Revenue
|
|
Total Comparable Sales1,2
|
|
Comparable Store Sales2
|
|
Direct to Consumer Net Revenue
|
||||||
Change
|
|
16
|
%
|
|
10
|
%
|
|
29
|
%
|
|
15
|
%
|
|
9
|
%
|
|
30
|
%
|
Adjustments due to foreign exchange rate changes
|
|
1
|
|
|
1
|
|
|
1
|
|
|
1
|
|
|
1
|
|
|
2
|
|
Change in constant dollars
|
|
17
|
%
|
|
11
|
%
|
|
30
|
%
|
|
16
|
%
|
|
10
|
%
|
|
32
|
%
|
(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 full fiscal months, or open for at least 12 full fiscal months after being significantly expanded.
|
|
|
Quarter Ended
October 28, 2018 |
|
Three Quarters Ended
October 28, 2018 |
||||||||||||||||||||
|
|
GAAP Results
|
|
U.S. Tax Reform
|
|
Adjusted Results
(Non-GAAP)
|
|
GAAP Results
|
|
U.S. Tax Reform
|
|
Adjusted Results
(Non-GAAP) |
||||||||||||
|
|
(In thousands, except per share amounts)
|
||||||||||||||||||||||
Income tax expense
|
|
$
|
43,534
|
|
|
$
|
(5,163
|
)
|
|
$
|
38,371
|
|
|
$
|
115,633
|
|
|
$
|
(5,163
|
)
|
|
$
|
110,471
|
|
Effective tax rate
|
|
31.6
|
%
|
|
(3.8
|
)%
|
|
27.8
|
%
|
|
30.4
|
%
|
|
(1.4
|
)%
|
|
29.0
|
%
|
||||||
Diluted earnings per share
|
|
$
|
0.71
|
|
|
$
|
0.04
|
|
|
$
|
0.75
|
|
|
$
|
1.97
|
|
|
$
|
0.04
|
|
|
$
|
2.01
|
|
|
|
Three Quarters Ended
|
||||||
|
|
November 3, 2019
|
|
October 28, 2018
|
||||
|
|
(In thousands)
|
||||||
Total cash provided by (used in):
|
|
|
|
|
||||
Operating activities
|
|
$
|
95,106
|
|
|
$
|
316,876
|
|
Investing activities
|
|
(212,475
|
)
|
|
(165,914
|
)
|
||
Financing activities
|
|
(179,555
|
)
|
|
(406,361
|
)
|
||
Effect of exchange rate changes on cash
|
|
1,757
|
|
|
(31,495
|
)
|
||
Decrease in cash and cash equivalents
|
|
$
|
(295,167
|
)
|
|
$
|
(286,894
|
)
|
•
|
an increase in cash used in operating activities of $350.1 million as a result of changes in operating assets and liabilities, primarily due to the following:
|
–
|
$113.9 million related to income taxes, primarily due to payments for withholding taxes on repatriated foreign earnings, as well as timing of tax installments;
|
–
|
$108.5 million related to accounts payable, primarily due to a change in our payment terms in the prior fiscal year;
|
–
|
$52.8 million related to inventory, primarily due to an increase in inventory purchases to support our growth; and
|
–
|
$44.7 million related to other prepaid expenses and other current and non-current assets.
|
|
|
November 3,
2019 |
|
February 3,
2019 |
||
United States
|
|
301
|
|
|
285
|
|
Canada
|
|
63
|
|
|
64
|
|
China (1)
|
|
34
|
|
|
22
|
|
Australia
|
|
31
|
|
|
29
|
|
United Kingdom
|
|
14
|
|
|
12
|
|
Japan
|
|
7
|
|
|
5
|
|
New Zealand
|
|
7
|
|
|
7
|
|
Germany
|
|
6
|
|
|
5
|
|
South Korea
|
|
5
|
|
|
4
|
|
Singapore
|
|
4
|
|
|
3
|
|
France
|
|
2
|
|
|
1
|
|
Sweden
|
|
2
|
|
|
1
|
|
Ireland
|
|
1
|
|
|
1
|
|
Netherlands
|
|
1
|
|
|
—
|
|
Switzerland
|
|
1
|
|
|
1
|
|
Total company-operated stores
|
|
479
|
|
|
440
|
|
(1)
|
Included within China as of November 3, 2019, were six company-operated stores in the Hong Kong Special Administrative Region, two company-operated stores in the Macao Special Administration Region, and one company-operated store in the Taiwan Province. As of February 3, 2019, there were five company-operated stores in the Hong Kong Special Administrative Region, one company-operated store in the Macao Special Administration Region, and one company-operated store in the Taiwan Province.
|
•
|
the following impacts to the consolidated statements of operations:
|
–
|
a decrease in our net revenue upon translation of the sales made by our Canadian operations into U.S. dollars for the purposes of consolidation;
|
–
|
a decrease 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 gains by our Canadian subsidiaries on U.S. dollar denominated monetary assets and liabilities; and
|
–
|
derivative valuation losses on forward currency contracts not designated in a hedging relationship;
|
•
|
the following impacts to the consolidated balance sheets:
|
–
|
a decrease in the foreign currency translation adjustment which arises on the translation of our Canadian subsidiaries' balance sheets into U.S. dollars; and
|
–
|
an increase 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 whether due to port congestion, labor disputes, product regulations and/or inspections or other factors, natural disasters or health pandemics, or other transportation disruptions; 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)
|
||||||
August 5, 2019 - September 1, 2019
|
|
34,143
|
|
|
$
|
177.24
|
|
|
34,143
|
|
|
$
|
329,549,525
|
|
September 2, 2019 - October 6, 2019
|
|
4,372
|
|
|
184.16
|
|
|
4,372
|
|
|
328,744,372
|
|
||
October 7, 2019 - November 3, 2019
|
|
5,954
|
|
|
190.61
|
|
|
5,954
|
|
|
327,609,459
|
|
||
Total
|
|
44,469
|
|
|
|
|
44,469
|
|
|
|
(1)
|
Monthly information is presented by reference to our fiscal periods during our third quarter of fiscal 2019.
|
(2)
|
A stock repurchase program was approved by our board of directors in November 2017 for the repurchase of up to $200 million common shares and 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.
|
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)
|
|||||
August 5, 2019 - September 1, 2019
|
|
6,426
|
|
|
$
|
181.78
|
|
|
6,426
|
|
|
4,758,460
|
|
September 2, 2019 - October 6, 2019
|
|
9,067
|
|
|
189.75
|
|
|
9,067
|
|
|
4,749,393
|
|
|
October 7, 2019 - November 3, 2019
|
|
6,000
|
|
|
203.11
|
|
|
6,000
|
|
|
4,743,393
|
|
|
Total
|
|
21,493
|
|
|
|
|
21,493
|
|
|
|
(1)
|
Monthly information is presented by reference to our fiscal periods during our third quarter of fiscal 2019.
|
(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
|
|
|
|
|
|
|
|
||||||
10.1*
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 November 3, 2019, formatted in iXBRL: (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/ PATRICK J. GUIDO
|
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.1*
|
|
Outside Director Compensation Plan
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 November 3, 2019, formatted in iXBRL: (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.
|
Non-Employee Director Compensation Plan
|
Annual Cash Retainer:(1)
|
|
|
|
|
|
Board Member
|
|
$85,000
|
|
|
|
Additional Annual Retainers:
|
|
|
Non-Executive Chairman of the Board
|
|
$135,000
|
Lead Director
|
|
$50,000
|
Audit Committee Chair
|
|
$20,000
|
Audit Committee Member
|
|
$10,000
|
Compensation Committee Chair
|
|
$15,000
|
Compensation Committee Member
|
|
$7,500
|
Nominating Committee Chair
|
|
$10,000
|
Nominating Committee Member
|
|
$5,000
|
|
|
|
Annual Grant of Restricted Stock(2)
|
|
$130,000(3)
|
|
|
|
Expense Reimbursement – for travel, lodging and other reasonable out-of-pocket expenses incurred in attending board and committee meetings.
|
|
|
|
|
|
(1)
|
The cash retainers will be paid in arrears, quarterly or semi-annually at the Company’s discretion. All amounts listed are in United States dollars.
|
(2)
|
Each share of restricted stock will be fully vested on the earlier of the first anniversary of the grant date and the Company's next annual meeting. Each non-employee director receives an initial restricted stock award in connection with the director’s election or appointment to the board. The initial awards are pro-rated for the partial year of service based on the date of election or appointment. Thereafter, on the date of each annual meeting of stockholders, each person who is either elected to the board at the annual meeting or continues to serve on the board upon the conclusion of the annual meeting will receive the restricted stock award.
|
(3)
|
The number of shares issued for restricted stock awards will equal the specified dollar value of the restricted stock award divided by the applicable per share ASC 718 charge as of the grant date as determined by the Company for financial reporting purposes.
|
|
By:
|
|
/s/ CALVIN MCDONALD
|
|
|
|
Calvin McDonald
|
|
|
|
Chief Executive Officer and Director
|
|
|
|
(principal executive officer)
|
|
By:
|
|
/s/ PATRICK J. GUIDO
|
|
|
|
Patrick J. Guido
|
|
|
|
Chief Financial Officer
|
|
|
|
(principal financial and accounting officer)
|
|
By:
|
|
/s/ CALVIN MCDONALD
|
|
|
|
Calvin McDonald
|
|
|
|
Chief Executive Officer and Director
|
|
|
|
(principal executive officer)
|
|
By:
|
|
/s/ PATRICK J. GUIDO
|
|
|
|
Patrick J. Guido
|
|
|
|
Chief Financial Officer
|
|
|
|
(principal financial and accounting officer)
|