lululemon athletica inc

Financial Highlights

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

•Net revenue increased 7% to $2.4 billion. On a constant dollar basis, net revenue increased 8%.

•Comparable sales increased 2%, or 3% on a constant dollar basis.

–Americas comparable sales decreased 3%, or 2% on a constant dollar basis.

–China Mainland comparable sales increased 21%, or 23% on a constant dollar basis.

–Rest of World comparable sales increased 17%, or 20% on a constant dollar basis.

•Gross profit increased 9% to $1.4 billion.

•Gross margin increased 80 basis points to 59.6%.

•Income from operations increased 13% to $540.2 million.

•Operating margin increased 110 basis points to 22.8%.

•Income tax expense increased 14% to $165.3 million. Our effective tax rate for the second quarter of 2024 was 29.6% compared to 29.8% for the second quarter of 2023.

•Diluted earnings per share were $3.15 compared to $2.68 in the second quarter of 2023.

Market Conditions and Trends

Macroeconomic conditions, including consumer purchasing behaviors and foreign currency fluctuations, 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, which has adversely impacted consumer demand for our products.

While we experienced traffic growth in the first two quarters of 2024 in all markets, we saw continued moderation in our quarterly net revenue growth in the Americas. In the United States, net revenue declined by $2.9 million in the second quarter of 2024 compared to the second quarter of 2023. We continue to monitor macroeconomic conditions and the trends in consumer demand for our products.

Foreign currency fluctuations have adversely impacted our financial results. Foreign currency fluctuations reduced the growth of our net revenue by $43.9 million when comparing the first two quarters of 2024 to the first two quarters of 2023, primarily due to the overall appreciation of the US dollar. We expect future exchange rate volatility to impact our results.