lululemon athletica inc.

Financial Highlights

The summary below compares 2024 to 2023 and provides both GAAP and non-GAAP financial measures. The adjusted financial measures for 2023 exclude $72.1 million of post-tax asset impairment and other charges recognized in relation to lululemon Studio. There were no adjusted financial measures for 2024.

•Net revenue increased 10% to $10.6 billion. On a constant dollar basis, net revenue increased 11%.

•Comparable sales, which excludes net revenue from the 53rd week of 2024, increased 4%.

–Americas comparable sales decreased 1%.

–China Mainland comparable sales increased 25%, or 27% on a constant dollar basis.

–Rest of World comparable sales increased 19%, or 20% on a constant dollar basis.

•Gross profit increased 12% to $6.3 billion. Adjusted gross profit increased 11%.

•Gross margin increased 90 basis points to 59.2%. Adjusted gross margin increased 60 basis points.

•Income from operations increased 17% to $2.5 billion. Adjusted income from operations increased 12%.

•Operating margin increased 150 basis points to 23.7%. Adjusted operating margin increased 50 basis points.

•Income tax expense increased 22% to $761.5 million. Our effective tax rate for 2024 was 29.6% compared to 28.8% for 2023. The adjusted effective tax rate was 28.7% for 2023.

•Diluted earnings per share were $14.64 for 2024 compared to $12.20 in 2023. Adjusted diluted earnings per share were $12.77 in 2023.

Market Conditions and Trends

Macroeconomic conditions, government actions and policies, consumer confidence and purchasing behaviors, and foreign currency fluctuations impact our business. Such factors are expected to continue to impact our business throughout 2025, with the impact varying by market.

Consumer confidence, purchasing behaviors, and their propensity to spend in our sector have been impacted by uncertain economic conditions including inflation, fluctuating interest rates, and other factors. We continue to monitor the economic environment, including in the US, Canada, and China Mainland.

We experienced revenue and traffic growth in 2024 compared to 2023 in all regions, but have experienced a reduction in our revenue growth rate in the Americas compared to the growth we had in previous years, driven by our operations in the United States. During 2024, Americas comparable sales decreased 1%. We are monitoring government policies in the Americas, including changes in tariffs, and while we do not expect current changes to have a material impact on the cost of our products, tariffs and related uncertainties could impact consumer confidence, traffic, and demand for our products.

Foreign currency fluctuations have adversely impacted our financial results. Foreign currency fluctuations reduced the growth of our net revenue by $75.3 million when comparing 2024 to 2023, primarily due to the overall appreciation of the US dollar. We expect future exchange rate volatility to impact our results.