Lululemon Athletica (LULU) Q3 2026 earnings summary

Executive summary

• Q3 FY2025 revenue grew 7% to $2.6 billion, with international markets driving growth and Americas revenue declining; diluted EPS was $2.59, down from $2.87 last year.

• CEO Calvin McDonald announced his planned departure, with a transition to co-CEOs and an executive chair, and will remain as advisor through March; CEO succession plan underway.

• The company has tripled annual revenue since 2018, expects $11 billion in fiscal 2025, and expanded to over 30 geographies.

• Strong product innovation, guest engagement, and a three-pillar action plan (product creation, activation, enterprise efficiency) are underway to drive U.S. business inflection.

• 12 net new stores opened, bringing the total to 796 company-operated locations.

Financial highlights

• Q3 net revenue rose 7% year-over-year to $2.6 billion; comparable sales increased 2%; digital channel revenue grew 13% to $1.1 billion, 42% of total revenue.

• Americas revenue declined 2% (comparable sales down 5%), while international revenue surged 33% (China Mainland up 46%, Rest of World up 19%).

• Gross profit was $1.43 billion (55.6% margin), down from 58.5% last year, mainly due to tariffs and higher markdowns.

• Operating income was $436 million (17% margin), net income $307 million, EPS $2.59 vs. $2.87 last year.

• Inventories increased 11% to $2.0 billion; unit inventory up 4%.

Outlook and guidance

• FY2025 revenue expected at $10.96–$11.05 billion, up 4% year-over-year (5–6% excluding the 53rd week); FY2025 EPS guidance raised to $12.92–$13.02.

• Q4 revenue expected at $3.5–$3.59 billion, down 1–3% year-over-year; Q4 EPS $4.66–$4.76.

• China Mainland revenue expected at or above 20–25% growth; rest of world up high teens.

• Gross margin for FY2025 to decrease ~270 bps; operating margin to decrease ~390 bps.

• Guidance includes a $210 million reduction in operating income due to higher tariffs and removal of de minimis exemption.