lululemon athletica inc. Announces Second Quarter Fiscal 2025 Results

Revenue increased 7% to $2.5 billion, or increased 6% on a constant dollar basis

Comparable sales increased 1%

Diluted EPSrticles/eps-explained-simple-example" title="Read: EPS Explained with a Simple Example: The Most Important Stock Metric" class="article-link" rel="noopener">Diluted EPS of $3.10

VANCOUVER, British Columbia--(BUSINESS WIRE)-- lululemon athletica inc. (NASDAQ:LULU) today announced financial results for the second quarter of fiscal 2025, which ended on August 3, 2025.

Calvin McDonald, Chief Executive Officer, stated: "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."

For the second quarter of 2025, compared to the second quarter of 2024:

• Net revenue increased 7% to $2.5 billion, or increased 6% on a constant dollar basis.
  • Americas net revenue increased 1%.
  • International net revenue increased 22%, or 20% on a constant dollar basis.
• Comparable sales increased 1%.
  • Americas comparable sales decreased 4%, or 3% on a constant dollar basis.
  • International comparable sales increased 15%, or 13% on a constant dollar basis.
• Gross profit increased 5% to $1.5 billion and gross margin decreased 110 basis points to 58.5%.
• Income from operations decreased 3% to $523.8 million and operating margin decreased 210 basis points to 20.7%.
• The effective income tax rate for the second quarter of 2025 was 30.5% compared to 29.6% for the second quarter of 2024.
• Diluted earnings per share were $3.10 compared to $3.15 in the second quarter of 2024.
• The Company repurchased 1.1 million of its shares for a cost of $278.5 million.
• The Company added 14 net new company-operated stores during the second quarter, ending with 784 stores.

Meghan Frank, Chief Financial Officer, stated: "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. As we begin the back half of the year, our brand and balance sheet remain strong, and we will continue to exercise financial discipline and strategically invest in our growth potential."

Balance Sheet Highlights

The Company ended the second quarter of 2025 with $1.2 billion in cash and cash equivalents and the capacity under its committed revolving credit facility was $393.2 million.

Inventories at the end of the second quarter of 2025 increased 21% to $1.7 billion compared to $1.4 billion at the end of the second quarter of 2024. On a unit basis, inventories increased 13%.

2025 Outlook

For the third quarter of 2025, the Company expects net revenue to be in the range of $2.470 billion to $2.500 billion, representing growth of 3% to 4%. Diluted earnings per share are expected to be in the range of $2.18 to $2.23 for the quarter. This assumes a tax rate of approximately 30.5%.

For 2025, the Company now expects net revenue to be in the range of $10.850 billion to $11.000 billion, representing growth of 2% to 4%, or 4% to 6% excluding the 53rd week of 2024. Diluted earnings per share are now expected to be in the range of $12.77 to $12.97 for the year. This assumes a tax rate of approximately 30%.

The guidance for 2025 includes an estimated reduction in gross profit of approximately $240 million, net of currently anticipated mitigation efforts, including vendor savings, and pricing actions, reflecting our current assumptions about higher levels of tariffs on imports into the United States and the removal of the de minimis exemption. Actual results could differ materially from these estimates if tariff rates, sourcing savings, consumer demand, or the timing of regulatory changes vary from our current assumptions, or if our mitigation initiatives are less effective than currently expected.

The guidance does not reflect potential future repurchases of the Company's shares.

The guidance and outlook forward-looking statements made in this press release are based on management's expectations as of the date of this press release and do not incorporate future unknown impacts, including tariffs and macroeconomic trends. The Company undertakes no duty to update or to continue to provide information with respect to any forward-looking statements or risk factors, whether as a result of new information or future events or circumstances or otherwise. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of risks and uncertainties, including those stated below.

Conference Call Information

A conference call to discuss second quarter results is scheduled for today, September 4, 2025, at 4:30 p.m. Eastern time. Those interested in participating in the call are invited to dial 1-833-752-3550 or 1-647-846-8290, if calling internationally, approximately 10 minutes prior to the start of the call. A live webcast of the conference call will be available online at: https://corporate.lululemon.com/investors/news-and-events/events-and-presentations. A replay will be made available online approximately two hours following the live call for a period of 30 days.

About lululemon athletica inc.

lululemon athletica inc. (NASDAQ:LULU) is a technical athletic apparel, footwear, and accessories company for yoga, running, training, and most other activities, creating transformational products and experiences that build meaningful connections, unlocking greater possibility and wellbeing for all. Setting the bar in innovation of fabrics and functional designs, lululemon works with yogis and athletes in local communities around the world for continuous research and product feedback. For more information, visit lululemon.com.

Shifted Calendar for Comparable Sales

Due to the 53rd week in 2024, comparable sales are calculated on a one-week shifted basis such that the 13 weeks ended August 3, 2025 is compared to the 13 weeks ended August 4, 2024 rather than July 28, 2024.

Non-GAAP Financial Measures

We report certain financial metrics on a constant dollar basis, which is a non-GAAP financial measure.

A constant dollar basis assumes the average foreign currency exchange rates for the period remained constant with the average foreign currency exchange rates for the same period of the prior year. The Company provides constant dollar changes in its results to help investors understand the underlying growth rate of net revenue excluding the impact of changes in foreign currency exchange rates. Management uses constant currency metrics internally when reviewing and assessing financial performance.

The Company's fiscal year ends on the Sunday closest to January 31st of the following year, typically resulting in a 52-week year, but occasionally giving rise to an additional week, resulting in a 53-week year. Fiscal 2024 was a 53-week year while 2025 will be a 52-week year. The expected net revenue increase excluding the 53rd week excludes the net revenue for the 53rd week of 2024. This enables an evaluation of the expected year-over-year increase in net revenue based on 52 weeks in each year.

These non-GAAP financial measures are provided in addition to, and not a substitute for, the corresponding financial measures calculated in accordance with GAAP. For more information on these non-GAAP financial measures, please see the section captioned "Reconciliation of Non-GAAP Financial Measures" included in the accompanying financial tables, which includes more detail on the GAAP financial measure that is most directly comparable to each non-GAAP financial measure, and the related reconciliations between these financial measures. The Company's non-GAAP financial measures may be calculated differently from, and therefore may not be directly comparable to, similarly titled measures reported by other companies.

Forward-Looking Statements:

This press release includes estimates, projections, statements relating to the Company's business plans, objectives, and expected operating results that are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. In many cases, you can identify forward-looking statements by terms such as "may," "will," "should," "expects," "plans," "anticipates," "outlook," "believes," "intends," "estimates," "predicts," "potential" or the negative of these terms or other comparable terminology. These forward-looking statements also include the Company's guidance and outlook statements. These statements are based on management's current expectations but they involve a number of risks and uncertainties. Actual results and the timing of events could differ materially from those anticipated in the forward-looking statements as a result of risks and uncertainties, which include, without limitation: the Company's ability to maintain the value and reputation of its brand; its highly competitive market and increasing competition; its ability to anticipate consumer preferences and successfully develop and introduce new, innovative and differentiated products; the acceptability of its products to guests; increasing costs and decreasing selling prices; its ability to accurately forecast guest demand for its products; its ability to expand in light of its limited operating experience and limited brand recognition in new international markets and new product categories; its ability to manage its growth and the increased complexity of its business effectively; changes in consumer shopping preferences and shifts in distribution channels; its leasing of retail and distribution space; its ability to attract, manage, and retain highly qualified individuals; seasonality; its ability to safeguard against security breaches with respect to its technology systems; its compliance with privacy and data protection laws; any material disruption of its information systems; its ability to have technology-based systems function effectively and grow its e-commerce business globally; changes to U.S. tariff and customs policy, including the elimination of the de minimis exemption; macroeconomic volatility, inflationary pressures, and shifts in consumer sentiment; global political and economic instability and related trade actions; changes to tariffs, customs rules, and other trade restrictions; changes in tax laws or unanticipated tax liabilities; its ability to comply with trade and other regulations; fluctuations in foreign currency exchange rates; global or regional health events such as the COVID-19 pandemic and related government, private sector, and individual consumer responsive actions; disruptions of its supply chain; its reliance on a relatively small number of vendors to supply and manufacture a significant portion of its products; suppliers or manufacturers not complying with its Vendor Code of Ethics or applicable laws; fluctuating costs of raw materials; its ability to deliver its products to the market and to meet guest expectations if it has problems with its distribution system; increasing labor costs and other factors associated with the production of its products in South Asia and South East Asia; imitation by its competitors; its ability to protect its intellectual property rights; conflicting trademarks and patents and the prevention of sale of certain products; climate change and related pressures; heightened scrutiny and legal risks from competing pressures regarding ESG; its exposure to various types of litigation; and other risks and uncertainties set out in filings made from time to time with the United States Securities and Exchange Commission and available at www.sec.gov, including, without limitation, its most recent reports on Form 10-K and Form 10-Q. You are urged to consider these factors carefully in evaluating the forward-looking statements contained herein and are cautioned not to place undue reliance on such forward-looking statements, which are qualified in their entirety by these cautionary statements. The forward-looking statements made herein speak only as of the date of this press release and the Company undertakes no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances, except as may be required by law.

lululemon athletica inc.
The fiscal year ending February 1, 2026 is referred to as "2025" and the fiscal year ended February 2, 2025 is referred to as "2024".
Condensed Consolidated Statements of Operations
Unaudited; Expressed in thousands, except per share amounts
		Second Quarter								First Two Quarters
			2025				2024				2025				2024
Net revenue		$	2,525,219			$	2,371,078			$	4,895,879			$	4,579,969
Costs of goods sold			1,048,017				958,893				2,035,551				1,892,716
Gross profit			1,477,202				1,412,185				2,860,328				2,687,253
As a percentage of net revenue			58.5	%			59.6	%			58.4	%			58.7	%
Selling, general and administrative expenses			951,658				871,959				1,894,529				1,714,385
As a percentage of net revenue			37.7	%			36.8	%			38.7	%			37.4	%
Amortization of intangible assets			1,730				—				3,360				—
Income from operations			523,814				540,226				962,439				972,868
As a percentage of net revenue			20.7	%			22.8	%			19.7	%			21.2	%
Other income (expense), net			9,737				17,994				21,523				41,277
Income before income tax expense			533,551				558,220				983,962				1,014,145
Income tax expense			162,646				165,298				298,485				299,802
Net income		$	370,905			$	392,922			$	685,477			$	714,343
Basic earnings per share		$	3.10			$	3.15			$	5.71			$	5.70
Diluted earnings per share		$	3.10			$	3.15			$	5.70			$	5.69
Basic weighted-average shares outstanding			119,600				124,721				120,116				125,358
Diluted weighted-average shares outstanding			119,680				124,857				120,262				125,600

lululemon athletica inc.
Condensed Consolidated Balance Sheets
Unaudited; Expressed in thousands
		August 3, 2025			February 2, 2025			July 28, 2024
ASSETS
Current assets
Cash and cash equivalents		$	1,155,794		$	1,984,336		$	1,610,112
Inventories			1,722,570			1,442,081			1,429,043
Prepaid and receivable income taxes			323,227			182,253			210,969
Other current assets			327,137			371,632			321,620
Total current assets			3,528,728			3,980,302			3,571,744
Property and equipment, net			1,917,361			1,780,617			1,614,893
Right-of-use lease assets			1,605,009			1,416,256			1,302,947
Goodwill and intangible assets, net			182,215			171,191			23,925
Deferred income taxes and other non-current assets			290,126			254,926			230,626
Total assets		$	7,523,439		$	7,603,292		$	6,744,135
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable		$	373,333		$	271,406		$	317,348
Accrued liabilities and other			423,933			559,463			396,423
Accrued compensation and related expenses			148,895			204,543			174,702
Current lease liabilities			297,919			275,154			278,067
Current income taxes payable			26,746			183,126			19,231
Unredeemed gift card liability			252,334			308,352			250,754
Other current liabilities			34,186			37,586			32,126
Total current liabilities			1,557,346			1,839,630			1,468,651
Non-current lease liabilities			1,464,799			1,300,637			1,180,823
Deferred income tax liability			62,400			98,188			28,876
Other non-current liabilities			51,615			40,790			34,140
Stockholders' equity			4,387,279			4,324,047			4,031,645
Total liabilities and stockholders' equity		$	7,523,439		$	7,603,292		$	6,744,135

lululemon athletica inc.
Condensed Consolidated Statements of Cash Flows
Unaudited; Expressed in thousands
		First Two Quarters
			2025				2024
Cash flows from operating activities
Net income		$	685,477			$	714,343
Adjustments to reconcile net income to net cash provided by operating activities			(475,755	)			(143,679	)
Net cash provided by operating activities			209,722				570,664
Net cash used in investing activities			(319,960	)			(266,625	)
Net cash used in financing activities			(744,823	)			(916,543	)
Effect of foreign currency exchange rate changes on cash and cash equivalents			26,519				(21,355	)
Decrease in cash and cash equivalents			(828,542	)			(633,859	)
Cash and cash equivalents, beginning of period			1,984,336				2,243,971
Cash and cash equivalents, end of period		$	1,155,794			$	1,610,112

lululemon athletica inc.
Reconciliation of Non-GAAP Financial Measures
Unaudited
Constant dollar changes
The below changes show the change compared to the corresponding period in the prior year. Due to the 53rd week in 2024, the below changes in comparable sales are calculated on a one-week shifted basis such that the 13 weeks ended August 3, 2025 is compared to the 13 weeks ended August 4, 2024 rather than July 28, 2024.
		Second Quarter 2025
Net Revenue		Change			Foreign exchange			Change in constant dollars
United States		—	%		—	%		—	%
Canada		1			—			1
Mexico(1)		n/a			n/a			n/a
Americas		1			—			1
China Mainland		25			(1	)		24
Rest of World		19			(4	)		15
Total international		22			(2	)		20
Total		7	%		(1	)%		6	%

		Second Quarter 2025
Comparable Sales(2)		Change			Foreign exchange			Change in constant dollars
Americas		(4	)%		1	%		(3	)%
China Mainland		17			(1	)		16
Rest of World		12			(3	)		9
Total international		15			(2	)		13
Total		1	%		—	%		1	%

__________
(1)	On September 10, 2024, the Company acquired the lululemon branded retail locations and operations run by a third party in Mexico. Wholesale sales to the third party by lululemon athletica canada inc. prior to the acquisition are disclosed as net revenue recognized within Canada.
(2)	Comparable sales includes comparable company-operated store and e-commerce net revenue. Comparable company-operated stores have been open for at least 12 full fiscal months, or open for at least 12 full fiscal months after being significantly expanded. Comparable company-operated stores exclude stores which have been temporarily relocated for renovations or have been temporarily closed. Company-operated stores acquired as a result of the acquisition of the Mexico operations will be considered comparable beginning October 2025, after 12 full fiscal months of sales from the date of acquisition.

Expected net revenue increase excluding the 53rd week
The Company's fiscal year ends on the Sunday closest to January 31st of the following year, typically resulting in a 52-week year, but occasionally giving rise to an additional week, resulting in a 53-week year. Fiscal 2024 was a 53-week year while 2025 will be a 52-week year.
		Fiscal 2025
Expected net revenue increase		2% to 4%
Impact of 53rd week		2%
Expected net revenue increase excluding the 53rd week (non-GAAP)		4% to 6%

lululemon athletica inc.
Company-operated Store Count and Square Footage(1)
Square footage expressed in thousands
		Number of Stores Open at the Beginning of the Quarter		Number of Stores Opened During the Quarter		Number of Stores Closed During the Quarter		Number of Stores Open at the End of the Quarter
3rd Quarter 2024		721		28		—		749
4th Quarter 2024		749		21		3		767
1st Quarter 2025		767		5		2		770
2nd Quarter 2025		770		15		1		784

		Total Gross Square Feet at the Beginning of the Quarter		Gross Square Feet Added During the Quarter(2)		Gross Square Feet Lost During the Quarter(2)		Total Gross Square Feet at the End of the Quarter
3rd Quarter 2024		3,075		156		—		3,231
4th Quarter 2024		3,231		153		12		3,372
1st Quarter 2025		3,372		50		7		3,415
2nd Quarter 2025		3,415		99		3		3,511

__________
(1)	Company-operated store count and square footage summary excludes retail locations operated by third parties under license and supply arrangements.
(2)	Gross square feet added/lost during the quarter includes net square foot additions for company-operated stores which have been renovated or relocated in the quarter.

 

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