Lululemon Q2 Earnings: $3.10 GAAP EPS Beats, $2.5B Revenue Misses by $40M

Lululemon's Q2 GAAP EPS of $3.10 beats estimates by $0.25, while revenue of $2.5B misses by $40M. The company expects net revenue in the range of $2.47B to $2.5B for Q3 2025.

Lululemon Athletica Inc. (NASDAQ: LULU) reported its financial results for the second quarter of fiscal 2025, ending on August 3, 2025. The company's earnings per share (EPS) of $3.10 exceeded analyst expectations by $0.25, while revenue of $2.5 billion fell short of projections by $40 million. The company expects net revenue to be in the range of $2.47 billion to $2.5 billion for the third quarter of 2025.

Revenue and EPS Highlights
- Net revenue increased 7% to $2.5 billion, or 6% on a constant dollar basis.
- Americas net revenue increased 1%, while international net revenue surged 22%.
- Diluted EPS of $3.10 was a beat over the $2.85 expected by analysts.

Operating Performance
- Gross profit increased 5% to $1.5 billion, with a gross margin of 58.5%.
- Income from operations decreased 3% to $523.8 million, with an operating margin of 20.7%.
- The effective income tax rate was 30.5%, compared to 29.6% in the same period last year.

Management Comments
Calvin McDonald, Chief Executive Officer, commented on the results, stating, "While we continued to see positive momentum overall in our international regions in the second quarter, we are disappointed with our U.S. business results and aspects of our product execution. We have closely assessed the drivers of our underperformance and are continuing to take the necessary actions to strengthen our merchandise mix and accelerate our business. We feel confident in the opportunity ahead and plans we have in place to drive long-term growth."

Meghan Frank, Chief Financial Officer, added, "In the second quarter, we exceeded expectations on EPS, but revenue fell short of our guidance driven predominantly by our U.S. business. We are also navigating industry-wide challenges, including higher tariff rates. In light of these dynamics, we are revising our full-year outlook."

Outlook for 2025
- The company expects net revenue to be in the range of $10.85 billion to $11.00 billion for the full year 2025, representing growth of 2% to 4%.
- Diluted earnings per share are expected to be in the range of $12.77 to $12.97 for the year.

Balance Sheet
- The company ended the quarter with $1.2 billion in cash and cash equivalents.
- Inventories increased 21% to $1.7 billion.

Reference List:
[1] https://www.stocktitan.net/news/LULU/lululemon-athletica-inc-announces-second-quarter-fiscal-2025-n3iqm3uqxmxc.html