Lululemon Q4 2024 Earnings

Lululemon Beats Earnings Expectations but Disappoints with 2025 Guidance

Earnings Call Highlights Uncertainty and Focus on Controllables

Lululemon, a Canadian athleticwear company, has reported its fiscal fourth-quarter earnings and revenue, beating Wall Street expectations. However, the company’s 2025 guidance has disappointed analysts, leading to a 13% plunge in shares on Friday morning.

Earnings and Revenue Performance

For the quarter ended February 2, Lululemon reported earnings per share of $6.14, exceeding the expected $5.85, and revenue of $3.61 billion, surpassing the expected $3.57 billion. The company’s full-year 2024 revenue came in at $10.59 billion, up from $9.62 billion in 2023.

Guidance and 2025 Outlook

Lululemon expects first-quarter revenue to total $2.34 billion to $2.36 billion, missing Wall Street analysts’ expectation of $2.39 billion. The company anticipates full-year fiscal 2025 revenue of $11.15 billion to $11.30 billion, below the analyst consensus estimate of $11.31 billion. For the first quarter, Lululemon expects to post earnings per share in the range of $2.53 to $2.58, missing Wall Street’s expectation of $2.72.

Gross Margin and Tariffs

CFO Meghan Frank stated that gross margin for 2025 is expected to fall 0.6 percentage points due to higher fixed costs, foreign exchange rates, and U.S. tariffs on China and Mexico.

Comparable Sales and International Growth

Lululemon reported a 3% year-over-year increase in comparable sales for the quarter, excluding the 53rd week of the 2024 fiscal year. Comparable sales in the Americas were flat, while they grew 20% internationally.

Conclusion

Lululemon’s earnings report highlights the challenges faced by the company in the current economic environment, characterized by uncertainty and inflation concerns. Despite beating earnings expectations, the company’s guidance for 2025 has disappointed analysts, leading to a decline in shares. The company’s focus on innovation and expansion into new markets may help mitigate the impact of macroeconomic factors, but the path forward remains uncertain.

Frequently Asked Questions

Q: What were Lululemon’s earnings and revenue for the fourth quarter?
A: Lululemon reported earnings per share of $6.14 and revenue of $3.61 billion for the quarter ended February 2.

Q: How did Lululemon’s 2025 guidance compare to analyst expectations?
A: Lululemon’s 2025 guidance fell short of analyst expectations, with revenue expectations of $11.15 billion to $11.30 billion, below the consensus estimate of $11.31 billion.

Q: What impact did tariffs have on Lululemon’s gross margin?
A: Tariffs on China and Mexico are expected to contribute to a 0.6 percentage point decline in gross margin for 2025.

Q: How did Lululemon’s comparable sales perform in the quarter?
A: Lululemon reported a 3% year-over-year increase in comparable sales, with international sales growing 20% and Americas sales being flat.