TORONTO – Strong North American sales helped drive fourth-quarter results at Lululemon Athletica Inc., but the Vancouver-based retailer says its hopes for future growth centre largely on international markets.
Chief executive Laurent Potdevin said Thursday the company is on track to meet a previously announced goal of having 20 stores a piece in both Europe and Asia by the end of 2017.
The company will open stores in the U.K., Germany, Hong Kong, Singapore and Dubai this financial year, he said, adding the company sees considerable promise in locations beyond North America.
“As we grow in new markets, we see growing demand for our strong brand,” Potdevin said in a conference call to discuss the company’s fourth-quarter results.
“We are on track to expand our global footprint and believe our international business could match and ultimately exceed our overall North American revenues over the long-term.”
However, the company has no plans to shelve expansion plans in Canada and the United States, Potdevin said, adding the company hopes to see double-digit square footage growth during the coming year.
Potdevin hopes to build on momentum established last year by introducing redesigned staples of its fashion-oriented athletic gear. The second quarter of 2015 will see the store roll out a selection of women’s tank tops offering varying levels of support, while the third quarter will offer customers a revamped selection of pants.
The overhaul is part of an effort to regain ground lost during a high-profile gaffe with its signature black yoga pants in 2013. Customers criticized the company for producing a product made of fabric that was too sheer.
Chief financial officer Stuart Haselden, who joined the company last month after several years with J. Crew, said plans for 2015 will build upon groundwork laid during the financial year ended Feb. 1.
He said fourth quarter performance was particularly encouraging, citing a 16 per cent spike in sales that saw revenue jump to US$602.5 million from $521 million a year ago.
The increase in sales came as Lululemon earned a fourth-quarter profit of US$110.9 million or 78 cents per share compared with a profit of $109.7 million or 75 cents per share a year ago.
The company offered a relatively rosy forecast for its 2015 financial year despite foreign exchange challenges, weather complications and shipping disruptions that are expected to take their toll in the first part of the year.
The company said revenue for the year is expected to be between US$1.97 billion and US$2.02 billion, some of which it expects will come from continued growth in its menswear product line.
Capital expenditures for the year are expected to range between US$130 million and US$135 million.
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