Lululemon Athletica (LULU) Q2 2025 earnings summary

Executive summary

• Q2 revenue rose 7% to $2.4 billion, with strong international growth, especially in China Mainland, while U.S. revenue was flat due to reduced newness in women's products.

• Diluted EPS increased 18% to $3.15, supported by gross margin expansion and prudent expense management.

• Net income for Q2 was $392.9 million, up 15% year-over-year.

• The Power of Three x2 plan continues, targeting $12.5 billion revenue by 2026 through product innovation and market expansion.

• Opened 10 net new stores, ending Q2 with 721 company-operated locations.

Financial highlights

• Gross profit reached $1.4 billion, with gross margin up 80 bps to 59.6% year-over-year.

• Operating income was $540.2 million (22.8% of net revenue), up 110 bps year-over-year.

• Net income was $393 million, or $3.15 per diluted share, compared to $2.68 last year.

• Inventory declined 14% year-over-year to $1.4 billion.

• 2.6 million shares repurchased in the first two quarters for $888.9 million; $1.3 billion remains authorized.

Outlook and guidance

• FY2024 revenue guidance raised to $10.375–$10.475 billion (8–9% growth, or 6–7% excluding 53rd week); EPS $13.95–$14.15.

• Q3 2024 revenue expected at $2.34–2.365 billion (6–7% growth); EPS $2.68–$2.73.

• Guidance assumes ~30% tax rate and excludes future share repurchases.

• Management expects continued macroeconomic and currency volatility, especially in the Americas.

• Liquidity is expected to be sufficient for at least the next 12 months, supported by strong cash balances and credit facility.