A Lululemon retailer in Manhattan, New York Metropolis, on July 15, 2024.
Beata Zawrzel | Nurphoto | Getty Photos
Lululemon beat Wall Road expectations for fiscal fourth-quarter earnings and income, however issued 2025 steerage that upset analysts.
On an Thursday earnings name, CEO Calvin McDonald stated the athleticwear firm carried out a survey earlier this month that discovered that buyers are spending much less resulting from economic and inflation concerns, leading to decrease U.S. site visitors at Lululemon and business friends. Nevertheless, he stated, buyers responded effectively to innovation on the firm.
“There continues to be appreciable uncertainty pushed by macro and geopolitical circumstances. That being stated, we stay centered on what we will management,” McDonald stated.
Shares of the attire firm plunged 15% on Friday morning.
Lululemon was solely the newest retailer to say it expects slower sales for the remainder of this 12 months as considerations develop a few weakening financial system and President Donald Trump‘s tariffs. Even so, the Canada-based firm stated it anticipated solely a minimal hit to income from the U.S. commerce battle with nations together with Canada, Mexico and China.
This is how the corporate did in contrast with what Wall Road 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% 12 months over 12 months for 2024.
Lululemon expects first-quarter income to whole $2.34 billion to $2.36 billion, whereas Wall Road analysts had been anticipating $2.39 billion, in response to LSEG. The retailer anticipates it would put up 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 put up earnings per share within the vary of $2.53 to $2.58, lacking Wall Road’s expectation of $2.72, in response to LSEG. Full-year earnings per share steerage 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 proportion factors resulting from larger mounted prices, overseas change charges and U.S. tariffs on China and Mexico.
Lululemon reported a internet revenue for the fourth quarter of $748 million, or $6.14 per share, in contrast with a internet revenue of $669 million, or $5.29 per share, through the fourth quarter of 2023.
Comparable gross sales, which Lululemon defines as income from e-commerce and shops open a minimum of 12 months, rose 3% 12 months over 12 months for the quarter. The comparability excludes the 53rd week of the 2024 fiscal 12 months. Analysts anticipated the metric to rise 5.1%.
Comparable gross sales within the Americas had been flat, whereas they grew 20% internationally. Lululemon has been going through a sales slowdown within the U.S., though McDonald stated its U.S. enterprise stabilized within the second half of the 12 months and partially attributed the development to new merchandise. He added that Lululemon will increase its shops to Italy, Denmark, Belgium, Turkey and the Czech Republic this 12 months.
