lululemon athletica’s (LULU) CEO Laurent Potdevin on Q1 2016 Results – Earnings Call Transcript
While store traffic comps wasn’t as strong in Q1 as in Q4, we delivered a total revenue increase on a constant currency basis of 19%, driven by an 8% combined comp, the result of continued positive comps in our stores and e-commerce growth in the high teens.
Sponsoring Canadian beach volleyball team
This summer will mark the first Olympic Games where lululemon has partnered with Canada’s beach volleyball team, to create one of a kind equipment designed specifically for them. The custom gear was developed with real-time feedback from the athletes of the Canadian women’s and men’s Beach Volleyball Team. Rigorous testing on-court and in-house at lululemon’s white [ph] space, resulted in the ultimate designs that will allow the athletes to perform at their best, without distraction, while looking fantastic.
Square footage growth of 18%
in Q1, we opened two new lululemon stores along with six new ivivva locations. This supported our total square footage growth in Q1 of 18%, keeping pace throughout our 12% annual goal.
Ecom penetration was flat but no red flags
Hey Sharon, it’s Stuart. So yeah, the e-comm growth, still double digits, high teens. We are not going to feel bad about that. It is a little lower than what we have seen last year. We feel like the penetration has the potential to go well above 20%; easily could reach 25% to 30%, I think we talked about that in our five year goals. I would expect, as the digital team is able to ramp up the full impact of our full web site, as we are able to bring online, particularly in the second half of the year, the full capabilities of our CRM efforts. We are going to see healthy trends in that e-comm sales trends, and would expect penetrations to increase over time. And so, we are not seeing any red flags per se, in the Q1 results.
Traffic trends improved in last couple of weeks
the traffic was softer in the first quarter versus what we saw in Q4, and it was softer late in the quarter as well, and that persisted in the first couple of weeks of May, in Q2. We have seen the traffic trends improve in the last couple of weeks.