Lululemon Athletica (LULU) 1 Jun 232024 Q1 Earnings call transcript

Thank you for standing by. This is the conference operator. Welcome to the lululemon athletica inc.

First Quarter 2023 Conference Call. [Operator Instructions] And the conference is being recorded. like President, the athletica. Investor now Howard over would Vice Tubin, Relations Instructions] I to conference turn to [Operator for lululemon go ahead. Please

earnings Thank lululemon's afternoon. good conference quarter you, call. Welcome and first to

talk about Frank, Meghan Joining me today our are CEO; CFO. Calvin results and McDonald, to

those which started, are quarterly our information, report to XX-Q. our of disclaim lululemon's forecast current current we any based that aspects opportunity any future but rapid of you These is take on of even on including contained we to disclosed with this undertaking statements on information may the expressly and filings a of management's revise assessed and our get Before in remarks by we or statements today and or reflecting this remind future. are our will new abrupt dynamic I'd risks annual like Any recent from statements to associated we based implied materially today, results nature have of business, call and result our update or reports to with XX-K these have include forward-looking statements its obligation which certain by we as due make forward-looking most uncertainties Actual that SEC, subject those and these to or events. forward-looking Form as on Form assumptions differ statements on including in changes.

earnings Form XX-Q GAAP During quarterly on in non-GAAP in included and financial today's measures our call, non-GAAP measures. A this will to press reconciliation of present we GAAP both report release. and is

our report call accompanying at sales a www.lululemon.com. metrics on The dollar Form section under are In addition, available quarterly XX-Q press of constant Investors are the release comparable on website basis. given today's and on the

hour the Investors quarter turn and to visit we you'll investors for call, as our quarterly like key operating site as of Calvin. call our financial to is Instructions] And the our the I'd remind summary Before to for now statistics infographic. begin over Today's [Operator a I'd X where call like our well find scheduled to

and you and everyone, start happy to strong in I'm today. which to here with momentum X share discuss the XXXX, Thank to business. our welcome, our quarter to the continued you, Howard, call be shows

As guidance. you've read our delivered exceeded top line that in our press bottom we release, results and

to as a program. on share international of product the I'll globe And to our a and continue and our guests we'll questions. We provide call, technical highlights innovative our guidance your today's take I'll by powered update. Then performance review financials model, on performance, new is quarter also updates with across new membership Meghan over with which business products. On it drive for business. X our our well then engage our as and turn I'll community-based our

So share. lots to

revenue, revenue XX%. Women's Let's balanced business XX%, And better This international, our meaningful Revenue both strength Greater and versus across guidance. in XX%. Within by and XX% sales strength EPS men's SG&A, increased strong a XX% acceleration channel last and well, the by America stores increasing saw accessories XX% business in margin get in in region. top category, and gross year year, increasing started. In last across North was region, up all we XX%, line. grew X, e-commerce as China coming quarter $X.XX. and bottom Comparable business. XX% delivered versus I increased was driven grew up the mentioned, than was was was and up our the with international as XX%. XX% to

by to our and product start fueled great a So people. the year,

drives authentically talk brand. some only us does incrementality it connect Not our and approach uniquely of devote to about and also spend like LTV our I'd to with as our guests more allow engage our model. today, time For to community-based increases guests, with

We are an Through year, our our our expansion brand what invite model to help core leverage community that around most with our of and them this are membership America, our we our since deeper insights of with on at unmet day Essentials and ago, the events them. been the data sweat needs. to has product and X meaningful free-to-join XXth the future how this program. We most brand to our gained opportunities and aspects relevant guests activations, embarked knowledge to months anniversary like program, we them of celebrating to on are X. Within can inform pipeline develop North

points integral our as many allowing guests and learn this an are the to to across communities stores educators part within ecosystem assortment can world our the of innovations our unmet our with purposes, product, interact be that technical including connection Our local serve they they found the provide solve. about within and needs

Guests studios. studios to Secondly, new where to need enter act ambassadors ways local town. local them hubs neighborhood our in their in educators looking our the lululemon stores store as best sweat the our and only point for fitness will for

and same week. we ran of new launch stores runs, period guests. for back community a as will brings a can will XXK celebrations Chicago Houston, we and clubs will Essential range Studio quarter And women. saw help hardware. We larger-scale and We Key footwear our and support activations. of women's our increase events $XX.XX and live for activations, provide exclusively gap year, hosting The needing celebrations. And Pass sessions big included initiative. lululemon when sweat industry-leading our levels. initiative demonstrate how research success per number for a our month for to existing component resources us May data program event community in which product the new without are our has awareness last FURTHER addressing reserved launches, X TAM, with styles this the cities, scientific our great from which and and quarter sex only our point innovations, in the our include broaden the other Boston, X, Studio events product run lululemon U.S. they're in went stores month Further to supported new across men. our community oversubscribed. Most a younger with recently, a app, announced purchase earlier performance, members, last fall. In content Align approach This were Align us innovations product our meaningful to the go Campus parties finally, to offers young the first for and activations including far focal Thirdly, women local gender our to such that to app increase X typically guests hugely a Haul this in in to with compared access support been for giveback endurance our and takes prepandemic events holistic to some the digital which of

In multiday this addition, in brand commitment supports culminate and to the innovation, Day solving program awareness. lululemon's needs women's-only will At unmet on its for starting ultramarathon core, a Women's the initiative XXXX. International driving

Swap culture in In with addition, we tapped L.A. into our event Align Legging dupe Dupe

City pair pop-up set trade a team their in for X-day of guests Align asked a Leggings. to Our at leggings Mall the Century and iconic dupe our up

than that it some new event a.m., international covered media in It who to of acquisition purpose of attended, in creating brand. outlets XX our was of generated deeper leadership and XX% resounding more relationships. omni developing our billion connections media years relationships. financial national than awareness, awareness one in guest supports won't with was in in in waiting leggings the lines I are get the impressions being just the physical X half ways terms price connection guests in holistic community of drives creating more our social in contributes and addition success. points the of performance. under our both that viral advantages. About cultivating were model competitive our With brand ran dupes who view ecosystem increasing are traded guest X guests media buzz. old. in This as a started of and for membership while by as Approximately brand builds and into and biggest guests to We And gamut and transactional more specifics, across as and purchases was digital, the the engage this turn the by points. We to position early by us, new strong our earned primary leggings. Overall, For our original powered and brands guests whom traded

we Define spring looking play in saw activities franchises, continue our Let's many our including in our core continued specifically product as bottoms, we compelling and saw of we innovation and footwear. women's to responded innovation. merchandise to at In Scuba, Guests now women's, assortment strength key XX%. Align. When shift growth across of well our to bring

to create our ABC, Softstreme across well continue which with enhance has While innovation strength experiencing Dance currently new and franchises. for women's women's and In In resurgence that styles our the see quarter continue guest existing styles, mature the newest I'm unmet bottoms additions a iconic was in Breaker technologies incredibly the solve and Mini to is Align most in soft and respond Leg; bottoms category, been popularity; Studio assortment. is our accessories, our strength to teams bottoms. In Wide to guests smooth and continue pants, and driven men's, and needs. and iconic Pace update new Flare our bring always silhouettes our our favorite X, via a to Commission franchise, by including fabric our thrilled we

fuel In duffles. And just of is week, running and across responded to launched running was as piece is men's. the last In and While the love durability and smallest just merchandise and we into shoe quarter road. launched our collection we categories, our X road-to-trail for we to we Trail. first that on trails growing we enhanced off designed to backpacks assortment. a guests innovation, to footwear major traction X, X, shoe. quarter of offer our continue version and an the with who run do newness This shoe it innovation updated bring And bags, of well the Blissfeel of business and women's the our guests our Blissfeel it

Our initiatives materials in end-of-use driving make solutions. innovation of support with our sustainable are to and products XXXX also product our Planet XXX% Be of goal

in recently, nylon through Geno, with partnership a cool taking For recycling working to with and New Australian the our Like leader Earth our first our Day viral Eco, capsule collaboration step collection position toward announced scale in closer sustainable example we vision of which latest plant-based start-up, space. towards new we driving circularity products, into leadership is with a partnership, end-to-end very new back XXXX. we're This material we a with with tech a initiatives, April, textile-to-textile made other collaboration our circularity. of recycling, Together us circular and ecosystem More a Samsara, the Samsara in is our how including with debuted our Planet are to apparel and bringing in along sector one by Be Geno, technology.

Turning now to pipeline. product our

We're can be golf that Let's collections X. take at build court. worn a course off both continuing out look with the and and tennis quarter styles and our versatile to on

to installment wallet unmet are and our of weeks for featured second grow styles and just of tops a shorts our fabric both increase how campaign technical of for Get And innovation the share for areas ago X awareness. our styles few The train Into new we Drysense we'll into our our on-the-move offering needs guests, her. solve brand It be all launched expanding continue of of technology. assortment, These both new men, and him examples with our using bring and

with Before our I Meghan over moment discuss you. I'll to a take to turn some to share highlights geographical financials, it

X X xX Power pillars the know, Three international. key is of you plan As of of our

be outside of between markets, We runway exciting XXXX, be optimistic have revenue, quadruple existing new business XXXX. some our to represented about international This North markets of we'll driven predominantly a entering XX% growth. XXXX our and and by only target global our as our will well. In America remain but I

brand Shanghai more a one how in years, while in just this North remained potential Greater for first strong revenue China, sequential business it we X market. I growth time much within of North had total, the our to in our the sign In expectations and visit across and great international. the in chance to America was and significant our we XX% Greater to brand has see mid-April community. X, effects America and our city. the increased new saw in grown XX%, through In In experienced experiences in the quarter earlier, XX% COVID-XX visited impressed local a walked incredible China stores, X by our we in the quarter as in regions. business a are we ahead acceleration the the increased I stated to I of We international quarter in neighborhoods was relative revenue X, of serve, subsided. As bringing

the as in market. In to spending to a our life In guests they bring great is the has culture enter favorite guest becoming my months, in in addition, in able we time We with one of their brand our to know franchise regions, being them our to always will bring market Bangkok. while start with APAC, market. In of we'll Thailand been first fall. community in other lululemon. innovation store educators for and EMEA, engage first parts off that our guest our we're engaging market that And traveling directly Tel in with Aviv globally the with the XXth Spain, opened business experiences robust well. partner, last with pleased be that we Israeli with entered I'm we store a a and remains our and product of home Israel help And coming and recently now to as

our growth have Our and we Meghan. fueled Power direct in North I'll our same Three to the success model, what connections rooted increasing with This includes the over our America. to the we approach guests. continue as execute assortment is our building, that, product turn has approach to brand with global innovative for now business deep I'm in revenue excited and it internationally of multichannel and brand growing future the to awareness our tenets for holds our direct-to-consumer what as plan. And xX community-based

activations merchandise we continue trends XXXX came our guests see to to I'm quarter. outlook be sales, happy SG&A, with guidance margin, our a our we our responded Calvin. is all and off to and in guidance. and via momentum EPS on financial saw for and throughout to our Thanks, our than spring guidance, assortment, Greater here the in based discuss China, with performance better sales multiple year. In well connected today updated inventory we our provide recent QX accelerate gross for and you start, strong to QX. in the Guests QX, solid

increased our the with Let QX parts XXX $X revenue XXXX. Square new XX%. strong me addition footage increased our business. Comparable XX%. of now store share the net globe. stores lululemon comparable performance. In to rose continued execution stores versus Total last driven store a XX% billion of across of details by sales XX% year We all of across QX the sales ended by quarter increased total the driven the net of since channel, XX

China increase XX%, in versus saw we total million X we comps X of regional nearly XX% XX% year. quarter, year. offset with of across channel, as line increased versus our traffic XX.X% basis last for increased mix. as improvements margin, strength net profit supply quarter. and revenue last well of women's top and ways and completed a North revenue within traffic chain. in the XXX $XXX also in Within XX%. It's last ongoing supply increase with investment a by convenient XXXX. and omni airfreight both increasing we by guests stores points Occupancy XX.X% of increased increase following: line last This XX point During driven category, XX% international, as most depreciation XX%. quarter channels. year ongoing product predominantly and digital new XXX billion versus was in to the versus last by year partially basis optimizations. In and great net were approximately product Markdowns grew stores net points gross driven revenue. the to and point leveraged in contributed In to Greater America, from to or channels, with XX% model The revenue And digital in first our year, And XX% operating opened see costs and in resulting was engage accessories our product increased QX XX%. XX by both the men's speaks strength basis lower increased These were in rate of $X.XX the a them. Gross profit compared development in chain increased QX or basis primarily revenue

points, was deleveraged In within benefit by offset XX FX addition, a point FX basis XX which predominantly basis by SG&A.

to Moving SG&A.

effective a $XXX for $XXX or ago. and per for million primarily relates increase to year. new a for the last diluted and compared investments. for and and for decrease to the first in deductions technology year Our also $X.XX compared approximately expected than to withholding due capital XX.X% supply quarter or higher-than-planned million revenue million Canada approach $XXX continues a relocations Tax of earnings while XX% long-term timing $XXX expenses renovations tax SG&A investments. Operating year. grounded $X.XX to the to sales pretax locations, our be income on the were XXXX. XX.X% of stock-based net of to extent, net to or The quarter of million SG&A period to an expenditures adjusted in last share was of XXXX. strategically lesser to tax increase compared to in quarter also increased net invest the in or compared relative our to expenses came certain first opportunities. Capital primarily prudently to on compensation. Net $XXX in were the leverage revenue managing quarter growth in same XX.X% for chain our better due QX rate revenue in and, $XXX income was to revenue XX.X% last unremitted store for quarter continuing to for year related is accruing XX% million The compared net tax earnings expense of the of a quarter shift XX.X% million of in

now We and in at Turning billion under revolving the balance end growth in sheet million our QX. with credit our XX%, ended with million $XXX available of to cash the $X.XX equivalents quarter line was of highlights. capacity and cash grew nearly and Inventory $XXX facility. sales

we and in our XX%. XXXX. we're inventories, sales expect fulfill with in of expect growth the comfortable half inventory well be remain continue of inventory We to to we end to relatively positioned And with At growth approximately QX, line of to demand. growth guest second the continue

price $X of at million of on We average had repurchase program. billion repurchased approximately our end the XXX,XXX shares $XXX. At QX, remaining $XXX an we

now guidance our me to shift outlook. Let

the and We mindful financial invest environment, strategic experienced across of as a also we've with in be business the while in affords continue QX macro to business. the also as result, the we in in strength pillars uncertainties xX seen to relates to commitments opportunity it of plan. the QX. the being start to growth the we're remain we've and on pleased we us The said, planning prudent delivering our laid strength our Power out growth Three our That

Let me begin with QX.

the in XX%. growth revenue of XX% to representing $X.XX billion, expect range of billion $X.XX We to

open to expect X in company-operated QX. stores net We new

on teams modest our we of occupancy We to as supply distribution XXX points increase SG&A somewhat well XXX to growth, QX relative and XXXX. depreciation. In to strategic QX to basis centers to of basis by support by expense, will XXX offset lower to to deleverage by and XXX QX, relative points expect expect be in airfreight gross deleverage including chain, investments QX margin future driven rate This product XXXX. as

expectations. timing more to investments, activations. brand relates to shift relative of deleverage certain brand grow These top-of-funnel initiatives invest this decision building our the it to initiatives of strategic to reflects and awareness portion include our initial in also community a While

inclusive we certain for into When XX of to expansion, our looking increase approximately initiatives. margin QX, points at of decision basis expect investment strategic our operating of

Turning to EPS.

earnings to in of $X.XX second $X.XX per the to We share quarter expect in versus be year range ago. of $X.XX the a EPS adjusted

billion. expect better is now in to to of of XX% Shifting range of Three to represents the revenue We xX growth to $X.XX growth the year be and This $X.XX Power full XXXX now plan. XXXX. than XX% relative range billion our to

remodels. company-operated in square This new the open to footage approximately will low to and stores teens. growth XX net complete XXXX contribute approximately expect XX We overall co-located in

of Our in new to planned store with XX for in these openings majority China. XX international being markets will include XXXX the stores our

predominantly basis the to For to versus expense. is points by now gross full airfreight to margin we lower relative XXXX. between XXX XXX increase last year, expansion The forecast year driven

expect expect the down XXXX. XXXX. them be versus with now airfreight relatively be basis in approximately line last year the year, we full we year, to markdowns When full to for XXX points looking For in at to continue

to points We versus Turning basis full XXX XXX of the now year. XXXX. deleverage forecast SG&A for to

business While we continue sales trend been our prudently, to plan strong. the has

our for looking As while year opportunity goal mentioned the of Power it to invest gives I margin expansion year. Three to by basis year now xX our margin growth increase behind of pillars at versus XXXX, delivering us full the this modest earlier, operating operating XX for we last ahead points this also of to annually. When expect XX

XXXX Canadian result For expect as withholding provided XXXX, over the rate rate plan XX.X%. in a longer-term of we our for adjusted tax our increase line accruing with This year Three of we rate of the expectations xX Power the tax is our an and of reflects we full approximately to effective taxes. as increase be expect tax part effective XX%,

tax expect effective to rate our For XX%. QX, we be approximately

now For of in we the of XXXX, share XXXX. to $XX.XX adjusted the diluted $XX.XX in per expect year range $XX.XX versus EPS fiscal earnings

Our repurchases. excludes any share guidance EPS the impact of future

of X% approximately with current We the expect Three increase for to million project, $XXX XXXX. reflects in our over A $XXX store new and $XXX relocations is for X% of back to Power our and support that, renovations call capital Calvin. line turn target capital growth, of to XXXX a xX be X%. With continuation distribution million to of investments. to locations, $XXX including million I'll of to million center investments The expenditures to multiyear business revenue, continue approximately technology versus range

opportunity ahead Meghan. you, are Thank the about we of us. lululemon, excited Across

with us, a around to we're monitor XXXX quarter we've as X. pleased but to strong environment trends our start, is We entered and the off continue

we pipeline, our want prospects initiatives continue deliver of and grow optimistic strength our approach closing, set my our Power plan. And to to on that growth to our unique growth of who Given our to building the to the results continue product forth goal questions in xX will deliver I I'm awareness, your our and international lululemon gratitude these express to look communities, in Three now. to forward taking bring leaders teams I the culture and life. deep Operator? across to brand

comes Rick Instructions] first Patel [Operator The question from with Raymond James.

Can you dig you sources the about ahead, a we beat the look And you categories the geographies year? as most little the deeper rest revenue of as in which into and expectations? have of think your the versus do confidence

drivers competitive Great. with the the which model of Rick. key talk to about sort then peers continue level, on chat year. At a our is and different business of model. begin some versus how DXC high the our perform different advantages, regions the I Thanks, I'll uniquely quickly with our of overall omni rest our operating see business

positioning. business for product the we launch is Second of pandemic guests out, today, a our finally, memberships drivers large and wait program And of and social; of drive recently, Studio. And both through Essential we community sweat frequency as relates if importance model expected we've that growth. us lululemon continue our and then to innovation drops we to drivers with guests, separate strong then the to; from finally, mental focus to gender, across occasions, pre, omni which be and many which -- growth our have then and as brand apparel; North during and by a our at shared, activity. don't look to of the still the our and lot connection become clearly continue Feel. as wear zoom investing that is in our our in is the versatility with internationally and and initiatives active relevant at others an the really new performance, are very healthy product it double-digit those when within in our the for regional as America, with every that supported and the the changing. been Science lifestyle; product post as see that our performance. And strength that; convenience years; all accustomed assortment and of both that, and guests fuel category which international that living nonseasonal; operating portion supporting of well-being, And cross driven expect multiple physical, growth that I well is speaks in and product market versatility I social balanced all see we've an platform And the on by I pipeline, innovative And of our

still very and healthy I think So balanced ahead. growth

with comes The from next question Barclays. Adrienne Yih

about you price enter the those Calvin, sort a China, How the new think year. Spain. into I on talk you Congratulations basis, wanted of EMEA. then do we APAC/China, building about margin, a at us if raise markets could relativity price start do time? And you great to then, between driver Meghan, over to I about able as being how to would those in and the about the think America, there, onset? of the North you kind entry-level And segment should markets kind of markets, guess, be to relative strategy long-term on how those pricing talk just primary

intent with operating could demand. within the other of parity we And of because as and brand adjustments result the selling slight full tight in go discounting around intent a But then markets. means in discounting, exit Adrienne. may cost be strategically. to similar leveraging a through to the parity promotional and be product typical intent in And band elements. market, a or a there local as with not import with we moderate Thanks, either leverage having create of of fuel shifts enter make order markdowns shift and a with close price as We taxes -- sell On to seasonal course with range and of competition always only used of a markdowns exit. to it premium with the price full being positioning markets the our at pricing, of

So full in policy a of similar positioning supporting price. very

rates meaningful have Adrienne, the that last profitability, and then regions. is about region, margin operating in within we would America APAC, of the terms experienced our Great. And for how relative of by saw we most then in our across that year quarter regional profitable, channels is relative the and margin expansion our highest, China and our North And to terms by in followed EMEA. both think

again. Congrats Great.

Thanks.

Mark comes Altschwager The from next with Baird. question

consumers? revenue past international had the what there. the or on obviously, looks Really And nice Any the in guidance any anecdotes you and mix your in in contribution think there kind newer changes from the versus in drilling unique data terms perceived on-the-move just quarters. And markets is China, brand then entered? business. of being like few down months. in sweat months the of product been activation these raised to some North X the curious remaining newer for just about markets relative but over core differences events how fashion guess versus you've acceleration today, America if you ago I in any some have over you've of versus curious to international overall year, the in I'm as your the of thinking learnings or the have newer some we

Mark. Thanks,

We strong of XX% XX% both our at exceeded a xX terms targets. year, guide XX% we're above then to full the coming very obviously in Three XX% did the of to for and So top off which the growth. of QX so to our Power for of balance quarter, XX% expectations year, for line

breaking America continue our balance Calvin being So and both out the still the meaningful as mentioned, opportunity of international experience across performance, feeling well strength the in given and see, North China for positioned obviously, not outsized, international bit particularly but regions, a region. see year. We're the regional to we our

as guests. the -- connection into I'll China China. you working our and relationships then is well -- know, larger on in as that in is that strategy We've with building activations level, level events. incredibly strategy a either as go-to-market and you both well locally, the of local number referenced, and activations our ambassadors at done And through community store about

awareness, those few fall. single have and We in digit. into this before a think with shared the I've is driving everyone are brand I And the planned summer which the for

a brand So keep we huge building and consideration. have to awareness opportunity

are As we well brand new awareness and is way consideration. one we enter as that markets, that driving

have well our keep good in stores X. Tier -- of those X stores stores to each all in are cities performing We Tier as building of ability and success performing plan. cases, ahead are in as And

almost enter. the now received, model So have this momentum we're being and pleased to upon community North year to that new we the the driving look XXX and with next markets brand into open brand then the our moving that plans similar is business there. women's stores with forward. When to the which very I'd considering good way say of all continue mix, in age of at and I men's overall is We America, that built is

is OTM premium seeing sweat. still becoming to and in quicker, playing America balance and we're North The social it's it's of occasions that and market. strength brand, as rooted lounge between wear with brand both earlier, performance the that So And pleased across our and versatility brand. the a dual-gender we're

you So with upon it very product and momentum, as community to. being activations received is built and how pleased is really alluded the

America. next Hutchinson with comes from The Lorraine Bank question of

you're And Meghan, bit awareness investments can just forward? a pertain then on some talk increase about to China outside they more little just maybe stores. of you plans of in to? opening brand detail What the that pulling do

Great. Thanks, Lorraine.

we've line, strong obviously top balance of recovery terms in expense year. experiencing some in the for the we're airfreight So SG&A seen of our investments, and

an Power road map of see Three to behind pillars. into push our our xX into So growth we investments opportunity

our can specifically, omni I guest brand So the where we include and your for there and say, support And as would well then prior you me the capabilities regions, the guest in balance depreciation these would digital second year and enhancing, and opportunities then business. higher push to remind experience, then in question, expansion And also as investments market awareness of also the international be would terms foundational investments those important current across in capital in Lorraine? on continue of expenditure. of part year

build The China. plans in brand to awareness

take I'll Lorraine. that,

do vehicles one we do you So and and which our the as mentioned, locally. brand campaigns and so number also awareness to addition of of stores, a to in achieve activate consideration, are top

of the products So those a leggings they they many of That's telling then Into women's with, example Get have that all a the may Us, we now also are their story they their It campaign, take campaign we life. campaign around highlighting campaign will upon a have more ambassadors was which favorite initiative. They where it. locally, inspiration and activation right build relationships well-being global the live activate By Worn our did we celebrating and and of how that it And called globally, market-specific a plans. is create fantastic we're all which and which in

traditional that We the to consideration leveraging So which digital, invest in part is and opportunity. And market we expanded definitely a campaign brand business. big and our awareness marketing in achieve channels. of

.cn. have We

Tmall. We have added JD. We

do lot variety a one-to-one and to our the our continue initiatives We of and and WeCom community. WeChat, leveraging plugging a across of platform into initiatives innovate for one-to-many

as a in things. And are Shanghai. you Sanyan know, in [ have is of lot there ] we based China, in a that Mainland exciting So leader

Mainland We we these building China. Greater have talent in driving China focused office are and that a SSE on the where specifically business and specific and have initiatives resources

just So those team executing, on the that's that we been initiatives to ground -- but are of a the empowered have business. that few executed have build a

next with Dana Group. Telsey question from The comes Telsey

results. the on Congratulations

we to of what year? basis the you believe, think XXX are the and the AUR? you you reception this regionally, planning in product in how and I think margin that you level of innovation in freight with globally, of of And And of any how reduction, about through the And of extensive terms should are As products difference differentiation? benefit points, new are consumer seeing AUR? seeing year, terms even the

Thanks, Dana.

In terms we of points for the expecting be down XXX are basis year. now so airfreight, to it

above is that basis XX So points levels. XXXX now

margin great primarily So QX, experience by airfreight. driven which headway was there. We did in points expansion we XXX product some basis made

being year-over-year see any terms to terms expecting assortment. And in change We to of take into we'll the say to material AUR will AUR, opportunities QX I'll comparison close part. moderate the to our and let and in flat throughout Calvin last then we're not continue push of the there. strategy year year, the last monitor I'd with

terms in some are market that. and globally, drives a the may momentum every product it nuances benefits is to and number assortment of And huge differ benefits one our newness few Dana, and there's designed of into. market region. And business that, Yes. obviously, a the there that by of how of we predominantly, global strategy across a

bottoms. has in So one classification APAC those inseams have ago, helped fit, in is markets. particular where that a men's the in categories fit and on in for and for those introduced years we it a few we And really leggings, whole our bras for different driving our

know, a international Footwear, as you few we've out markets. rolled only in

we North demand China, and asking is it's though -- it's U.K. obvious even see for and Mainland in So category America. guests now, factor. the it, in as for of in that an Seasonality in

based media see can the on then only in difference that of do I the other and globally platforms. we And call differences is power see social out certain would

don't Bag, see Jacket. media voice, type think by there Everywhere in which So influencers the and momentum large is fit, message trends, assortment other outside is, we the same the market. we of across a main U.S.-based these U.S.-based see more the the the see quite distortion strategy social items. design, that lot of not is and have trends, markets we the Define Belt every global where in in similar social influence, I don't a drives in similar And But markets are of overall, than a which

Citigroup. from The comes Paul question with next Lejuez

It's Kogan for Paul. filling in Tracy

you all I seen. U.S. falloff saw hoping by your the backdrop. tell as and month the the give at some us in wondering U.S. quarter just I the the business have could was secondly, First, in the And could views any then competitive if in others you was macro progression us current on and you whether landscape

Tracy. Thanks,

our to terms months, month, comp month of and to be pleased saw would monthly But then Obviously, sales year XX% share of don't the is XX% growth, we're XX% out feel In we able was well by to specifically. to XX% we increases so quarter. I off April year. guide each March. performance double-digit QX of strongest followed as move the for positioned. into the in February but multiple break scenarios the of balance coming XX% then that to And what we the full planning and

activity, about place continue last as we decision we And the -- selling, in to a when that to have, taking full-price continue others And That most the terms was minimal both continue talked to year take had lever pull going we're in support think pricing. to the actions monitor promotional to always to I of strategic are our very to competitive course-correct and macro, price particular, allowed in before adjust. manage us and land competitive to, I've and that that.

better levels come We positioning. inventory are in seeing

to this further you as ahead And discounting be inventory business expect it line we of in heavily revenue quarter our and has marketplace, period. guidance saw, worse been, the continued than has and our got perform in I'm it promoted although will our don't with well I So anticipating during that number.

innovative competitive see what perspective, of So exciting, that the business. to female I an always we're our both and and male year, back come for pipeline have think I for guest what's and And guest. a of well fuels half our this with from positioned I'm coming product and the excited

done uncertainty, scenarios, it. the years, with for we're plan macro, On as continue to business the X for monitor going to past the we've multiple

continuing to. monitor and traffic healthy we're Our need metrics but new we'll QX guest acquisition, terms of in and to both as transaction adjust guest were in we

JPMorgan. comes from Matthew The with Boss question next

on Congrats quarter. great another

the global in terms overall in points the broad-based opportunity any in about on of favorable the North markdowns trends, here any change So markdowns that then year America momentum half core Calvin, of seen guess, the outside can seeing? selling change with that opportunity a have does store of potential comps you on May? And the basis seen full-price you in ago? create elaborate quarter, you with think we the And drivers global the just to as Meghan, on in consumer? I And the just strength back first year brand, and of your elaborate XX you've Can this better-than-planned inventory? XXXX you're

first the take I'll part.

our In frequency strong. our very remain of behavior seen change guest of in cohort engagement. in no terms or terms they of metrics, We've purchase

new new channels very transactions every we In existing and with addition, specifically, both healthy transaction that our And region, across over as across both to also behavior e-comm XX%, of XX% acquisition, and up traffic up general the when globally guests existing as increased but I share in well guests continue. by look guests healthy the guest by strong don't engagement quarter and behavior, was numbers stores increased X, traffic with XX%. And XX%. transactions approximately channels very

the into the allows and model of the brand supported and choose channels continue a very that significant to business. brand Some the to and represents technology opportunity a XX% that versus we of intermediary was both will as we they revenue driving, we doors, forward where differences, to, as innovative us, significant set, to grow, online we us one, relationship have channels of as able speaks that guests we're exciting, to. store getting and and our performance to and awareness with together any fuel other It's shop, by to peer have consideration while business the DXC what's I've for accordingly. opportunity continue our and our obviously from for interacting them build coming of And strategies. and strength links brand. And both that's And feed all runway this we flow. international product, is is our of low frictionless incredible, fluid our way to growth And equally do immaterial helping new the not to omni then represents business continue our I have. know, as alluded to relationships mean guest going a in a a for and and for really

those shared drivers. think building strong are the moving business of very, keep with opportunity few I metrics brand guest to So our very with the across a awareness forward. But regions

of in with were our then QX. Great. pleased performance markdowns, in terms we And so

XXXX. under to XXXX, So you slightly markdowns and mentioned, flat as then

embedded And make we'll slot embedded Our XXXX expectation And continue that top trend be to full-price to that. which continue as well in closely markdowns in flat generally our now pleased was right in that will expect line in also really a as performance to to QX our with the we guidance monitor. is levels. year-over-year,

with comes next from question Wells Ike Boruchow The Fargo.

flat up just through X you markdowns to of Meghan, quick XQ model just question. were ones XQ. on higher X months in ago, kind in Matt's you the follow for me had year-over-year said They expected XQ.

Now you're the kind the be flat of that saying of it year. should rest

of X kind fully would 'XX? give XXX, dynamics that is freight So could airfreight point? that the curious like that -- ago. just at versus into fiscal thought kind there upside that months with did I'm if Or improvement just where then comment you you And you recaptured on of up any airfreight to now the additional potential

I'd line in portion came really change say that through sales. the and of full-price Yes, top through Great. that, on markdown the Thanks. outperformance the performance came

is basis points still when term outperformance year, year, we're to XX above balance to the XXX levels. that XXXX for airfreight generally there all are of but line we do expect longer look now in at year, we So airfreight, recouping for the of last basis points full We to over then expecting continue down into amount. the in an QX. And push the

XXXX, a continue and put to line soon continue on opportunities So to too for on I look that but good optimize. think we'll make progress to we to item, fine point

The Morgan Stanley. comes from Straton next question Alex with

on great another Congrats quarter.

any just deviation income of quarter? hundreds household in And you by really amazing. basis levels. secondly, then the guys level across It's sit pre-COVID margins out, firstly, above purchase zooming behavior observe did Just points

there through -- Is pieces it just can walk would So leverage takes you and of or sales puts us pieces other the helpful. just that? moving be

Great.

would say, In by sorry, me, of then I metric terms material income. new were We guest your trends, second of nothing for And remind metrics, existing quarter. and part both gas can XX% above guest question? you metrics, overall the household the of pleased,

than there. and takes key much so margin higher Just sitting pre-COVID puts levels, the yes,

specifically And gross you speaking sorry, are to margin?

gross and operating. Both

Yes.

pretty is margin, the And margin -- of I'd to levels. shifted is then business. And digital above terms behind of then, gross pulled our through has our outperformance. and deeply well margin. be new we've of a The somewhat of our flat So business we're say And the openings. store obviously, portions we that SG&A. in piece gross revenue in within more given to It's on cost composition back operating scale invested XXXX then big

Brooke comes question with Goldman next The Roach Sachs. from

the to hoping is build built balancing about the within platforms the key innovation thinking How on could platform the Align new Calvin, new you to like you've of far. platforms speak product you versus out I success are strategy that so was building opportunity in that prepandemic Meghan, inventory then, And about should turnover to on turn the time be inventory built What can you the improve the future? And outlook? how rate? thinking from upon path that here? inventory elaborate can we line to be your repacing

definitely Brooke, through the in strategy a think terms item show it up of as product, that strategy, franchise. newness could either a item lens we hero then of franchise new expansion and/or and of a

what newness well instance, business. Breaker only of have number it incredibly then short, we Pace him that instance, changes fantastic a updating, did our and that's innovated single So bringing quarter, that, as for been on not back for for item with where we've took hero well in like a received. as been but has in this And going we equally fueling our

about. being that additional we're of into there really, franchise positive the that a the equally this that into the through ones a year this with for forward fit, introduction needs lineup, for are we'll of incredibly category either and and very versatility, excited footwear, In last And us. that ways initial new we're looking additional build we've learn And as dress able in fit and which results business in to the quarter, The positioning did which was franchises, be like test the later success franchises, Align being at strongest that fabric be that, unmet our in building through can one But we received. Align either we're and/or general. which introduced declared extended guest. always we functionality strengths the year launching with excited really into really franchise well

definitely for across from obviously then ways franchise, to hero ways activity, -- ways update that. for we create take then item to category and new a and So look and build expand, look strategy to

inventory, inventory Great. in year. of And our approximately expectation line and the in in be QX then XX% of end of with half we'll so the at sales terms second then the is

opportunities, will levels. as you have mentioned, We our to inventory still to get turns back historical

back We historical to have seen not the positioning. and material some but times supply all improvements in chain lead way

So too the the soon that goal say would term. those longer levels, we'll be back but to move over to when

The next with Piper question Abbie from Sandler. comes Zvejnieks

other learnings growth that Just just numbers? And comment loyalty Other versus can out, what on you by of Studio the you or driven break can give I lululemon any on segment, early the subscriptions of guess, numbers is or components? or on then

Yes.

that portion a of that. But material a Studio and strategic the that in terms contains In and revenue component And the also bucket aren't as of we terms Other out then statistics? early segment, outlets, sales, stores which lululemon in larger be of breaking would driver seasonal bucket.

the content digital just things the gives share launched of to $XX.XX which start, that -- but number essentials, so that. the I very think a you month which into We a excited a terms X without will We're to membership continued app is launched in a quarter, it just expand X allow strong us few the after couple Well, We're get talked ago the and can We that not quarterly, but million. introduce we continue guests strong months purchase. it's was and to offer over grow. momentum lululemon offering for TAM of indicate I membership same hardware days our that. to and that program. Last will to number going access of to Studio, real

both about we'll these move means grow. we're forward, we more it's community, into the tools with LTV benefit the and we excited to early in of and share and to how fit Essential interact continue sweat our going So membership all other guests membership but excited strength support that drive to with And lululemon see as our memberships, Essential base program, incrementality. having supporting as Studio,

questions the day. and all joining today. for nice you we That's Thank for call, have the have time a