Lululemon Athletica (LULU) Q1 2025 earnings summary

Executive summary

• Q1 2024 revenue grew 10% to $2.2 billion (11% in constant currency), with EPS of $2.54, exceeding expectations.

• International markets, especially China Mainland (+52% constant currency), drove strong growth; U.S. growth was modest at 2–3%.

• Product innovation and global brand activations contributed to growth, with new men's footwear and Team Canada Athlete Kit launches.

• Board authorized a $1.0 billion increase in stock repurchase, bringing total capacity to $1.7 billion.

• Brand awareness remains low outside Canada, presenting significant growth runway.

Financial highlights

• Net revenue: $2.2 billion (+10% YoY); comparable sales up 7%; gross profit: $1.3 billion (57.7% margin, up 20 bps YoY).

• Operating income: $432.6 million (19.6% margin); net income: $321.4 million; diluted EPS: $2.54 (vs. $2.28 last year).

• Inventory down 15% YoY to $1.3 billion; cash and equivalents at $1.9 billion.

• Store revenue increased 12%, digital revenue up 8% YoY; 711 company-operated stores globally.

• Repurchased $530 million in stock YTD; board increased buyback authorization by $1 billion (total $1.7 billion capacity).

Outlook and guidance

• FY24 revenue expected at $10.7–$10.8 billion (+11–12% YoY); excluding 53rd week, growth of 10–11%.

• FY24 EPS guidance raised to $14.27–$14.47 (vs. $12.77 in 2023); effective tax rate ~30%.

• Q2 revenue expected at $2.4–$2.42 billion (+9–10% YoY); EPS $2.92–$2.97.

• Expect to open 35–40 net new stores and complete ~40 optimizations in 2024; capex $670–$690 million.

• Gross margin for FY24 expected to be flat with 2023; SG&A to leverage by ~10 bps.