Lululemon Faces Sharp Quarterly Sales Drop
The high-end sportswear brand Lululemon Athletica Inc. reported sharp drop in sales in the last quarter due to store closures in the U.S. and Europe amid the coronavirus pandemic, The Wall Street Journal reported.
Lululemon reported that 295 of its roughly 490 locations in the world have reopened, and half of the locations in North America are now open. The brand expects all stores globally to reopen by the end of June.
Consequently, current sales dropped significantly and the net revenue fell 17 percent compared to the same quarter last year. Operating income, at $32.8 million, dropped 75 percent from last year.
CEO Calvin McDonald said he expects e-commerce sales to remain higher permanently, although it is too soon to estimate the impact of the transition to online sales on the company’s long-term strategy.
“These are very difficult times to evaluate the value of our retail fleet and to make dramatic changes to a strategy,” McDonald said, and added that he sees physical stores remaining a central part of the company’s growth.
The company will not provide financial guidance for the current year due to the economic uncertainty. Its share price, however, has more than doubled since the plummet in mid-March.