The COVID-19 pandemic has hammered most businesses in the past 18 months, but some have fared better than others.
While the retail industry has seen sales crater at the times when coronavirus cases were at their highest, some sellers have still managed to see some success in Burnaby.
Lululemon Athletica Inc., which operates a flag ship store in Burnaby’s Metropolis at Metrotown, handily beat expectations in its latest quarter with profits more than doubling on a 61% increase in sales. The company, which reports in U.S. dollars, says it earned US$208.1 million or US$1.59 per diluted share in the second quarter, up from US$86.8 million or 66 cents per share a year earlier.
So, why should one fashion giant do better than other clothing companies that have ended up closing stores, like Frank and Oak, which closed up shop at Metropolis?
One thing in Lululemon's favour, according to an interview with Glacier Media, is what retail analyst and Retail Insider Media owner Craig Patterson called its "cult following" of a customer base that has been willing to pay increasingly higher prices for clothes as inflation sets in and the company raises prices.
"When stores were closed, it was one of the few retailers that had fairly consistent lineups outside," he added.
"Consumers generally are being more casual in terms of what they're wearing, at least for now," said Patterson after Lululemon's earnings report. "Lululemon certainly addresses that trend from a fashion standpoint."
Adjusted profits for Lululemon more than doubled to US$215.8 million or US$1.65 per share, compared with US$96.3 million or 74 cents per share in the second quarter of 2020.
Revenues for the three months ended Aug. 1 surged to US$1.45 billion from US$902.9 million.
"Our performance in Q2 was driven by a strong response to our product offering, improving productivity in our stores, and sustained strength in e-commerce," stated chief financial officer Meghan Frank. "While we continue to navigate the COVID-19 environment, including supply chain headwinds, I'm excited with our momentum as we head into the second half of the year and pleased to be able to increase our guidance."
Lululemon expects full-year profits to be US$7.16 to $7.26 per share on US$6.19 billion to US$6.26 billion of revenues.
The company opened 11 new stores in the quarter and has 534 stores in its network.
Patterson said one thing to be wary of when looking at the strong sales numbers is that many of the purchases could have been pulled forward from future quarters because so many people are working at home.
- With additional reporting by the Canadian Press and Glen Korstrom, Business in Vancouver
