Retailer Posts $2.4 Billion in Revenue as Global Expansion Offsets U.S. Slowdown
Lululemon Athletica (LULU) reported a 7% year-over-year revenue increase in the first quarter of 2025, reaching $2.4 billion, as robust international growth helped offset a modest decline in U.S. comparable sales. On a constant dollar basis, revenue rose 8%.
International markets were the standout performer, with net revenue soaring 19% (20% in constant dollars) and comparable sales climbing 6% (7% in constant dollars). In contrast, the Americas segment saw only a 3% revenue gain (4% constant dollar) and a 2% decline in comparable sales.
Gross profit rose 8% to $1.4 billion, with gross margin improving by 60 basis points to 58.3%. Operating income inched up 1% to $438.6 million, though operating margin slipped 110 basis points to 18.5%, reflecting higher costs and ongoing investment in global expansion.
Diluted earnings per share (EPS) rose to $2.60 from $2.54 in the year-ago quarter, and the company repurchased 1.4 million shares for $430.4 million. Lululemon ended the quarter with 770 company-operated stores, adding a net three new locations.
“We delivered first-quarter revenue growth at the high end of our guidance and are pleased with the start to our second quarter,” said Meghan Frank, Chief Financial Officer. “We remain focused on our strategy and continue to operate with discipline as we drive the business forward.”
Inventory levels rose 23% year-over-year to $1.7 billion, with unit growth of 16%, reflecting a strategic build-up to support future sales growth. The company maintained a healthy liquidity position, ending the quarter with $1.3 billion in cash and cash equivalents and $393.4 million in available credit.
Outlook Remains Positive
For the second quarter of 2025, Lululemon expects revenue between $2.535 billion and $2.560 billion, representing 7% to 8% growth. EPS is projected to be in the range of $2.85 to $2.90, based on a 30% tax rate.
Full-year 2025 guidance remains unchanged, with anticipated revenue between $11.15 billion and $11.3 billion—representing 5% to 7% growth (or 7% to 8% excluding the 53rd week in 2024). Full-year EPS is now forecasted between $14.58 and $14.78.
While the company notes potential risks from macroeconomic trends and tariffs, it expressed confidence in its global growth trajectory and disciplined execution.
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