Lululemon Athletica Reports Mixed Q2 Earnings, Lowers Guidance

Lululemon reported Q2 revenue of $2.53 billion, missing the consensus estimate of $2.54 billion. Earnings per share were $3.10, beating estimates of $2.90. Total revenue was up 7% YoY, while total comparable sales increased 1% YoY. The company lowered its full-year 2025 outlook, expecting full-year revenue of $10.85 billion to $11 billion and earnings of $12.77 to $12.97 per share.

Lululemon Athletica Inc. (LULU) reported its second-quarter 2025 earnings, revealing a 7% year-over-year (YoY) increase in revenue to $2.53 billion, but falling short of the consensus estimate of $2.54 billion. The company's earnings per share (EPS) came in at $3.10, surpassing the expected $2.90 per share. Total comparable sales increased by 1% YoY. Lululemon also revised its full-year 2025 outlook, predicting revenue between $10.85 billion and $11 billion, and EPS between $12.77 and $12.97 per share.

The company's revenue growth was driven by a 6.5% YoY increase in revenue, but this was offset by a 0.5% miss against Wall Street's estimates. Lululemon's EPS beat expectations by 8.7%, with the company reporting $3.10 per share compared to the average analyst estimate of $2.85 per share. However, the company's full-year EPS guidance was revised downward, missing analyst estimates by 11.9%.

Lululemon's gross profit increased by 5% to $1.5 billion, and gross margin decreased by 110 basis points to 58.5%. The company added 14 net new company-operated stores during the quarter, ending with 784 stores. The company's effective income tax rate for the second quarter was 30.5%, compared to 29.6% in the same period last year.

Lululemon's balance sheet remains strong, with $1.2 billion in cash and cash equivalents and a committed revolving credit facility capacity of $393.2 million. Inventories increased by 21% to $1.7 billion.

The company expects net revenue of $2.470 billion to $2.500 billion for the third quarter 2025, representing growth of 3% to 4%. For the full year 2025, Lululemon expects net revenue of $10.850 billion to $11.000 billion, representing growth of 2% to 4%.

Lululemon's stock traded down 12.9% to $179.50 immediately after reporting its Q2 results.

References:

[1] https://www.nasdaq.com/articles/lululemon-athletica-inc-profit-drops-q2-beats-estimates
[2] https://finance.yahoo.com/news/lululemon-nasdaq-lulu-misses-q2-202217455.html
[3] https://finance.yahoo.com/news/lululemon-athletica-inc-announces-second-200500907.html