Lululemon Athletica (LULU) Q1 2027 earnings summary

Executive summary

• Q1 revenue rose 4% to $2.5B, with international growth—especially China Mainland—offsetting a 3% decline in Americas revenue; comparable sales declined 2% year-over-year.

• Diluted EPS was $1.69, down from $2.60 last year, reflecting a 35% decrease.

• Gross profit declined 3% to $1.34B, with gross margin down 410 bps to 54.2%.

• Leadership transitions include a new CEO joining in September and new board members, with a focus on restoring momentum and executing strategic initiatives.

• Five net new stores opened, ending the quarter with 816 locations.

Financial highlights

• Operating income was $277M (11.2% margin), down from 18.5% last year; net income was $195M.

• SG&A expenses rose to $1.06B (42.9% of net revenue), up 310 bps, due to higher labor, incentive comp, brand activations, and proxy contest costs.

• Digital channel revenue grew 4% to $1B, representing 40% of total revenue.

• Inventory at quarter-end was $1.7B (up 2% in dollars, down 4% in units); $1.5B in cash and $600M available credit.

• 2.2M shares repurchased for $358.3M–$361.8M; $1B remains authorized.

Outlook and guidance

• Q2 revenue expected at $2.45B–$2.475B (down 2–3%), with Americas declining low double digits and China Mainland up mid to high teens.

• Q2 gross margin to decrease ~410 bps, operating margin expected at 11.6%, and EPS of $1.76–$1.81.

• Full-year 2026 revenue guided to $11B–$11.15B (flat to down 1%), with Americas down high single digits and China Mainland up ~20%.

• Full-year gross margin to decrease ~90 bps, operating margin to decrease ~380 bps, and EPS expected at $10.95–$11.15.

• Guidance excludes potential IEEPA tariff refunds and future share repurchases.