Lululemon wrapped up its fiscal year 2024 with a strong finish, delivering robust Q4 results that outpaced expectations however, the company’s cautious outlook for FY25 suggests potential near term challenges amid shifting market dynamics.
Lululemon concluded FY24 with a solid 13% year over year (Y/Y) increase in Q4 revenue, reaching $3.6 billion exceeding estimates by $30 million. Earnings per share (EPS) came in at $6.14, beating projections by $0.27. Gross margin improved by 100 basis points to 60%, highlighting improved operational efficiency. International revenue climbed an impressive 38% Y/Y, significantly outpacing the 7% growth in the Americas. Comparable sales rose 3%, primarily fueled by a 20% increase in international markets, including a 27% surge in mainland China. In contrast, sales in the Americas remained flat. The company closed the quarter with 767 stores, reflecting a net increase of 18 new locations.
Despite these strong results, Lululemon’s FY25 guidance fell short of market expectations. Management forecasted revenue growth of 5%–7% Y/Y and EPS between $14.95 and $15.15 both below analyst consensus. The company pointed to cautious consumer spending, inflationary pressures, and higher tariffs as key challenges. North America sales are expected to grow modestly in the low to mid single digits, while international expansion, particularly in China, remains a strategic priority with plans for 40 to 45 new store openings. Nonetheless, Lululemon’s focus on product innovation and global market penetration continues to support its long-term growth trajectory. The company also demonstrated confidence in its valuation by repurchasing $332 million in stock during the quarter, bringing total FY24 buybacks to $1.6 billion an increase of 192% Y/Y.
While Lululemon’s Q4 performance underscores its strength in international markets and operational efficiency, the cautious FY25 outlook reflects broader macroeconomic pressures. the company’s aggressive international expansion strategy and focus on product innovation position it well for sustained long term growth
Lululemon concluded FY24 with a solid 13% year over year (Y/Y) increase in Q4 revenue, reaching $3.6 billion exceeding estimates by $30 million. Earnings per share (EPS) came in at $6.14, beating projections by $0.27. Gross margin improved by 100 basis points to 60%, highlighting improved operational efficiency. International revenue climbed an impressive 38% Y/Y, significantly outpacing the 7% growth in the Americas. Comparable sales rose 3%, primarily fueled by a 20% increase in international markets, including a 27% surge in mainland China. In contrast, sales in the Americas remained flat. The company closed the quarter with 767 stores, reflecting a net increase of 18 new locations.
Despite these strong results, Lululemon’s FY25 guidance fell short of market expectations. Management forecasted revenue growth of 5%–7% Y/Y and EPS between $14.95 and $15.15 both below analyst consensus. The company pointed to cautious consumer spending, inflationary pressures, and higher tariffs as key challenges. North America sales are expected to grow modestly in the low to mid single digits, while international expansion, particularly in China, remains a strategic priority with plans for 40 to 45 new store openings. Nonetheless, Lululemon’s focus on product innovation and global market penetration continues to support its long-term growth trajectory. The company also demonstrated confidence in its valuation by repurchasing $332 million in stock during the quarter, bringing total FY24 buybacks to $1.6 billion an increase of 192% Y/Y.
While Lululemon’s Q4 performance underscores its strength in international markets and operational efficiency, the cautious FY25 outlook reflects broader macroeconomic pressures. the company’s aggressive international expansion strategy and focus on product innovation position it well for sustained long term growth
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Lululemon reported a 7% year over year increase in Q1 revenue, reaching $2.4 billion—matching expectations. Earnings per share came in at $2.60, slightly above estimates, and gross margins improved to 58%. International sales surged 19%, driven by a 21% rise in mainland China. However, U.S. comparable sales dropped 2% due to weaker store traffic. Overall same-store sales increased only 1%, falling short of forecasts. Management highlighted positive consumer response to new product lines such as Daydrift and No Line Align. The company reaffirmed its full-year revenue growth outlook of 5% to 7%, but lowered its earnings forecast to approximately $14.68 (down from $15.05), below analyst expectations.Investors reacted negatively to the sluggish U.S. performance and growing cost concerns tied to new tariffs, causing the stock to fall over 20%. Lululemon now anticipates a 30% tariff on Chinese imports and a 10% duty on others, which could pressure profit margins. Although the company plans moderate price hikes and supply chain improvements to cushion the blow, these strategies aren’t expected to significantly help until the second half of the year. As American consumers become more cautious and growth slows, challenges are mounting. Nevertheless, Lululemon is banking on international expansion, newer product categories like running and tennis, and ongoing innovation to drive its future growth.
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