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 steerage that disillusioned analysts.
On an Thursday earnings name, CEO Calvin McDonald mentioned the athleticwear firm performed a survey earlier this month that discovered that buyers are spending much less because of financial and inflation issues, leading to decrease U.S. visitors at Lululemon and business friends. Nevertheless, he mentioned, friends responded nicely to innovation on the firm.
“There continues to be appreciable uncertainty pushed by macro and geopolitical circumstances. That being mentioned, we stay centered on what we will management,” McDonald mentioned.
Shares of the attire firm fell greater than 10% in prolonged buying and selling.
Lululemon was solely the most recent retailer to say it expects slower gross sales for the remainder of this 12 months as issues develop a couple of slowing economic 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, primarily based 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 Avenue analysts had been anticipating $2.39 billion, based on LSEG. The retailer anticipates it’s going to 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 Avenue’s expectation of $2.72, based on 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 mentioned on the Thursday earnings name that gross margin for 2025 is predicted to fall 0.6 proportion factors because of larger mounted prices, international change charges and U.S. tariffs on China and Mexico.
Lululemon reported a internet earnings for the fourth quarter of $748 million, or $6.14 per share, in contrast with a internet earnings of $669 million, or $5.29 per share, throughout the fourth quarter of 2023.
Comparable gross sales, which Lululemon defines as income from e-commerce and shops open at the least 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 dealing with a gross sales slowdown within the U.S., though McDonald mentioned its U.S. enterprise stabilized within the second half of the 12 months 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 12 months.
