Lululemon Athletica Inc LULU
Q1 2012 Earnings Call Transcript

Transcript Call Date 06/07/2012

Operator: Good day, ladies and gentlemen, and welcome to the lululemon athletica Q1 2012 Results Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. As a reminder, this conference is being recorded.

I would now like to introduce your host for today's conference call, (Ms. Teresa). You may begin.

Teresa - IR: Good morning, everybody and thank you for joining us on the first quarter 2012 conference call. A copy of today's press release is available on the Investor Relations section of lululemon's website at or furnished on Form 8-K with the SEC and available on the Commission's website at

Shortly after we end this morning, a recording of today's call will be available as a replay for 30 days on the Investor Relations' section of the Company's website.

Hosting our call today is Christine Day, the Company's CEO; and John Currie, the Company's CFO. Sheree Waterson, our Chief Product Officer will also be available during the Q&A portion of the call.

We would like to remind everyone of course that statements contained on this call which are not historical facts may be deemed to constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those projected in such statements due to a number of risks and uncertainties, all of which are described in the Company's filings with the SEC. Also for today's call we've got a limit of one hour, so when we get back to the Q&A, please limit yourself to one question at a time to give others the opportunity to also have their questions addressed.

With that, I'll turn it over to Christine.

Christine Day - CEO: Thank you Teresa. Good morning, everyone, and thank you for joining us today to discuss our first quarter results. We have started off the year with another strong quarter. While every call John and I speak to our financial achievements, we are equally aware of our broader goal to create leaders in the world to elevate our ambassadors and the ongoing commitment of the entire team from our factories to our stores to deliver high quality innovative product and an excellent guest experience that makes it all possible. Before going further, I want to recognize everyone at lululemon for once again coming together to achieve these excellent results.

Our investment in increased inventory levels led to strong growth and earnings performance in the first quarter, as our guests responded well to our spring styles. You will recall that in the first quarter of last year, we were very light in inventory as a result of having oversold in the fourth quarter of the prior year. One of our key goals for 2011 was to balance our inventory to meet demand in order to focus our resources on innovation versus chasing product. We announced during our last call that we entered 2012 with a strong inventory position to break the cycle of chase, this translated into a 53% increase in revenue to $285.7 million. We are excited about our new store openings as each of these was unique and special for the individual communities.

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