Folks stroll previous a Lululemon division retailer in New York Metropolis on June 5, 2024.
Michael M. Santiago | Getty Photographs
Lululemon beat Wall Road expectations for fiscal first-quarter earnings Thursday, however reduce its full-year earnings steering, citing a “dynamic macroenvironment.”
As the corporate navigates tariffs and fears a few slowing U.S. financial system, CEO Calvin McDonald stated in a information launch that “we intend to leverage our robust monetary place and aggressive benefits to play offense, whereas we proceed to spend money on the expansion alternatives in entrance of us.”
Shares of the attire firm plunged about 20% in prolonged buying and selling.
Here is how the corporate did for its first quarter in contrast with what Wall Road was anticipating for the quarter ended Could 4, based mostly on a survey of analysts by LSEG:
- Earnings per share: $2.60 vs. $2.58 anticipated
- Income: $2.37 billion vs. $2.36 billion anticipated
The corporate reduce its full-year earnings steering. It expects its full-year earnings per share to be between $14.58 to $14.78. Beforehand, it anticipated full-year earnings per share to be within the vary of $14.95 to $15.15 for the 12 months. Analysts anticipated earnings per share of $14.89, in line with LSEG.
Lululemon’s report comes after a string of outlets decreased or withdrew their steering and stated they might hike costs due to uncertainty surrounding President Donald Trump’s tariff regime. Retailers together with Abercrombie & Fitch and Macy’s slashed their revenue outlooks, whereas others, together with American Eagle Outfitters pulled their full-year steering altogether.
Amongst Lululemon’s rivals within the athleticwear class particularly, Hole, which owns athleisure model Athleta, reported final week that it expects tariffs to impression its enterprise by $100 million to $150 million. Nike instructed CNBC final month it might start elevating costs on a variety of merchandise, although it didn’t specify whether or not tariffs had been the rationale for the hikes.
Lululemon reported web revenue for the fiscal first quarter of $314 million, or $2.60 per share, in contrast with a web revenue of $321 million, or $2.54 per share, a 12 months earlier.
First-quarter income rose to $2.37 billion, up from about $2.21 billion throughout the identical interval in 2024.
Lululemon expects second-quarter income to complete between $2.54 billion and $2.56 billion. It additionally anticipates full-year fiscal 2025 income to be $11.15 billion to $11.3 billion — unchanged from its final forecast. Wall Road analysts had been anticipating income of $2.56 billion for the second quarter and $11.24 billion for the total 12 months, in line with LSEG.
The activewear firm expects to publish earnings per share within the vary of $2.85 to $2.90 for the second quarter, in comparison with Wall Road’s expectation of $3.29, in line with LSEG.
Earlier than Trump’s sweeping April 2 tariff announcement, the corporate stated throughout its earlier earnings name in March that it anticipated a minimal hit to income from tariffs.
Throughout 2024, 40% of Lululemon’s merchandise had been manufactured in Vietnam, 17% in Cambodia, 11% in Sri Lanka, 11% in Indonesia, 7% in Bangladesh and the rest in different areas, in line with the corporate’s annual report. Lululemon doesn’t personal or function any manufacturing services and depends on suppliers to provide and supply materials for its merchandise, in line with the report.
Comparable gross sales rose 1% 12 months over 12 months for the quarter, in comparison with the three% Wall Road was anticipating, in line with StreetAccount. That quantity features a 2% lower within the Americas and a 6% enhance internationally.
Gross margin was 58.3%, forward of the 57.7% that analysts had anticipated, in line with StreetAccount.
As of Thursday’s shut, LULU inventory has dropped about 13% year-to-date.
