Lululemon retailer in Manhattan, New York Metropolis, U.S., on July 15, 2024.
Beata Zawrzel | Nurphoto | Getty Pictures
Lululemon beat Wall Avenue expectations for fiscal fourth-quarter earnings and income, however issued 2025 steering that disillusioned analysts.
On an Thursday earnings name, CEO Calvin McDonald stated the athleticwear firm performed a survey earlier this month that discovered that buyers are spending much less as a consequence of financial and inflation issues, leading to decrease U.S. site visitors at Lululemon and trade friends. Nevertheless, he stated, friends responded effectively to innovation on the firm.
“There continues to be appreciable uncertainty pushed by macro and geopolitical circumstances. That being stated, we stay targeted on what we will management,” McDonald stated.
Shares of the attire firm fell greater than 10% in prolonged buying and selling.
Lululemon was solely the newest retailer to say it expects slower gross sales for the remainder of this yr as issues develop a few slowing financial system and President Donald Trump’s tariffs.
This is how the corporate did in contrast with what Wall Avenue was anticipating for the quarter ended Feb. 2, based mostly on a survey of analysts by LSEG:
- Earnings per share: $6.14 vs. $5.85 anticipated
- Income: $3.61 billion vs. $3.57 billion anticipated
Fourth-quarter income rose from $3.21 billion throughout the identical interval in 2023. Full-year 2024 income got here in at $10.59 billion, up from $9.62 billion in 2023.
Lululemon’s fiscal 2024 contained 53 weeks, one week longer than its fiscal 2023. Excluding the 53rd week, fourth-quarter and full-year income each rose 8% yr over yr for 2024.
Lululemon expects first-quarter income to complete $2.34 billion to $2.36 billion, whereas Wall Avenue analysts have been anticipating $2.39 billion, based on LSEG. The retailer anticipates it’ll submit full-year fiscal 2025 income of $11.15 billion to $11.30 billion, in comparison with the analyst consensus estimate of $11.31 billion.
For the primary quarter, the corporate expects to submit earnings per share within the vary of $2.53 to $2.58, lacking Wall Avenue’s expectation of $2.72, based on LSEG. Full-year earnings per share steering got here in at $14.95 to $15.15 per share, whereas analysts anticipated $15.31.
CFO Meghan Frank stated on the Thursday earnings name that gross margin for 2025 is predicted to fall 0.6 share factors as a consequence of larger fastened prices, international trade charges and U.S. tariffs on China and Mexico.
Lululemon reported a web earnings for the fourth quarter of $748 million, or $6.14 per share, in contrast with a web earnings of $669 million, or $5.29 per share, in the course of the fourth quarter of 2023.
Comparable gross sales, which Lululemon defines as income from e-commerce and shops open at the very least 12 months, rose 3% yr over yr for the quarter. The comparability excludes the 53rd week of the 2024 fiscal yr. Analysts anticipated the metric to rise 5.1%.
Comparable gross sales within the Americas have been flat, whereas they grew 20% internationally. Lululemon has been dealing with a gross sales slowdown within the U.S., though McDonald stated its U.S. enterprise stabilized within the second half of the yr and partially attributed the advance to new merchandise. He added that Lululemon will broaden its shops to Italy, Denmark, Belgium, Turkey and the Czech Republic this yr.
