lululemon athletica inc

Financial Highlights

The summary below compares the first quarter of 2025 to the first quarter of 2024:

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

•Comparable sales increased 1%.

–Americas comparable sales decreased 2%, or 1% on a constant dollar basis.

–China Mainland comparable sales increased 7%, or 8% on a constant dollar basis.

–Rest of World comparable sales increased 6%, or 7% on a constant dollar basis.

•Gross profit increased 8% to $1.4 billion.

•Gross margin increased 60 basis points to 58.3%.

•Income from operations increased 1% to $438.6 million.

•Operating margin decreased 110 basis points to 18.5%.

•Income tax expense increased 1% to $135.8 million. Our effective tax rate for the first quarter of 2025 was 30.2% compared to 29.5% for the first quarter of 2024.

•Diluted earnings per share were $2.60 compared to $2.54 in the first quarter of 2024.

Market Conditions and Trends

Our business continues to be negatively influenced by macroeconomic conditions, including consumer demand, trade policies, inflation, and foreign currency fluctuations. These factors have had varying effects across our markets and are expected to remain relevant throughout 2025.

While total net revenue increased across all regions in the first quarter of 2025, comparable sales in the Americas decreased 2%, or 1% on a constant dollar basis. We experienced lower store traffic in the Americas, partially reflective of economic uncertainty, inflationary pressures, lower consumer confidence, and changes in discretionary spending.

Recently imposed tariffs on products imported into the United States, along with trade actions by other countries, may adversely affect our business. As a result of the tariffs imposed since April 2025, the cost of inventory in the United States has increased, which could lead to a significant reduction in gross margin and income from operations. Additionally, higher tariffs may lead to macroeconomic volatility, both in the United States and globally, potentially affecting consumer demand. We are taking steps to mitigate some of the financial impact from higher tariffs, which may include sourcing optimization, vendor negotiations, cost reductions, and selective price increases.

Foreign currency fluctuations negatively impacted our financial results during the first quarter of 2025, reducing net revenue growth by $21.3 million compared to the first quarter of 2024, primarily due to the overall appreciation of the US dollar. We expect ongoing exchange rate volatility to continue affecting our financial results.