lululemon athletica inc

Financial Highlights

The summary below compares the first quarter of 2024 to the first quarter of 2023:

•Net revenue increased 10% to $2.2 billion. On a constant dollar basis, net revenue increased 11%.

•Comparable sales increased 6%, or 7% on a constant dollar basis.

–Americas comparable sales were flat compared to the first quarter of 2023.

–China Mainland comparable sales increased 26%, or 33% on a constant dollar basis.

–Rest of World comparable sales increased 23%, or 26% on a constant dollar basis.

•Gross profit increased 11% to $1.3 billion.

•Gross margin increased 20 basis points to 57.7%.

•Income from operations increased 8% to $432.6 million.

•Operating margin decreased 50 basis points to 19.6%.

•Income tax expense increased 13% to $134.5 million. Our effective tax rate for the first quarter of 2024 was 29.5% compared to 29.1% for the first quarter of 2023.

•Diluted earnings per share were $2.54 compared to $2.28 in the first quarter of 2023.

Market Conditions and Trends

Macroeconomic conditions, including foreign currency fluctuations and consumer purchasing behaviors, impact our business and operating costs. Such factors are expected to continue to impact our business throughout 2024, with the impact varying by market.

Consumer purchasing behaviors and their propensity to spend in our sector have been impacted by uncertain economic conditions including inflation, higher interest rates, and other factors. While we experienced traffic and net revenue growth in the first quarter of 2024 in all markets, we saw continued moderation in our quarterly net revenue growth in the Americas, particularly in the United States. We continue to monitor macroeconomic conditions and the trends in consumer demand for our products.

Foreign currency fluctuations have impacted our financial results. Foreign currency fluctuations reduced the growth of our net revenue by $21.8 million when comparing the first quarter of 2024 to 2023, primarily due to the overall appreciation of the US dollar. We expect future exchange rate volatility to impact our results.