Fashion

Lululemon’s CEO reassures the market: “Our financial health is strong


New York – In a
recent earnings, Calvin McDonald, CEO at Lululemon, discussed the company’s
fourth-quarter results, as well as the near future of the company in the
light of the coronavirus pandemic. The yoga apparel brand’s leadership is
confident in their results in the short and middle term.

“The safety and well-being of our people and our guests in the affected
regions remains our highest priority. The current situation is clearly
dynamic. Broadly speaking, and similar to many of our peers, we are seeing
virus-related impact on performance across our markets,” said McDonald.

Luluemon’s CEO articulates their five “levers for success”

He also explained that they have closed their stores in North America,
Europe, and New Zealand. Australia is operating on reduced hours, in China,
all stores but the location in Wuhan are open on regular schedules and
other Asian markets have gone back to normal, exception made of Malaysia.
“In addition, we are closely monitoring our supply chain and staying in
constant contact with our vendors, as they too navigate this situation,”
added the company’s top executive.

Joining other traded apparel companies, Lululemon won’t be providing
financial guidance at this time. Nevertheless, McDonald want to reassure
their staff, shareholders and other stakeholders, saying that “The
underlying health of our business is strong, which provides us with many
levers to successfully manage through this period.” Those include:

A strong balance sheet. “We ended the year with 1.1 billion dollars in
cash, no long-term debt, and a 400 million dollars untapped revolver.”

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”Our investments in key technologies, including RFID and strong
partnerships with our vendors, will enable us to maximize inventory across
our network, while managing our overall levels.”

The power of their product. “Our assortment is less seasonal in nature,
as many of our core styles are relevant year round, and can be held for
future use.”

”Our e-commerce sites, mobile apps and omni capabilities, allows our
guests to shop in multiple ways, which is complemented by our agile store
formats.”

”At our core, we solved sweaty problems for athletes, and we do not
believe the current situation will change the trend toward people wanting
to live an active and healthy lifestyle. These are some of the reasons
we’re confident in our abilities to navigate the near-term, while working
to realize the opportunities over the longer term.”

Additionally, Lululemon’s management called out initial learnings from
China, “which show us that our business will bounce back. We are not yet
back to pre-closing volumes, but the business is getting stronger week by
week. There is considerable work under way across the business to respond
to the current situation, and I’d like to specifically update you on two of
these work streams. The first is the support phase and the second is how we
will enable the recovery phase,” highlighted the company’s CEO during the
fourth-quarter earnings call.

Image: Lululemon Media room



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