Canada's Lululemon expects $11.3 bn in FY25 revenue despite risks

For the full FY25, ending February 1, 2026, Lululemon maintains its net revenue guidance of $11.150 billion to $11.300 billion, representing 5 to 7 per cent growth, or 7 to 8 per cent excluding the 53^rd week of 2024. Diluted EPS for FY25 is now projected to range from $14.58 to $14.78. The guidance does not factor in potential future share repurchases and remains subject to macroeconomic uncertainties and tariff-related risks, the company said in its financial statement.

The outlook followed a solid Q1 FY25 (ended May 4) performance, with net revenue rising 7 per cent year-on-year to $2.4 billion, or 8 per cent on a constant dollar basis. In the Americas region during Q1, net revenue rose 3 per cent, driven by a 2 per cent increase in the US and a 4 per cent rise in Canada. On a constant dollar basis, Canadian revenue saw a notable 9 per cent increase. Overall, the Americas region posted 4 per cent revenue growth on a constant dollar basis.

International markets delivered strong performance in Q1, with net revenue from China Mainland rising 21 per cent, or 22 per cent on a constant dollar basis. The Rest of World category grew 16 per cent, or 17 per cent on a constant dollar basis. In total, international revenue surged 19 per cent, or 20 per cent when adjusted for currency fluctuations.

Lululemon's comparable sales during this period increased by 1 per cent overall, with no impact from foreign exchange rates. In the Americas, comparable sales declined by 2 per cent, though the decline was slightly offset by a 1 per cent gain on a constant dollar basis, resulting in a net decrease of 1 per cent.

In China Mainland, comparable sales rose 7 per cent, or 8 per cent in constant dollars. The Rest of World segment posted a 6 per cent increase, which adjusted to 7 per cent when accounting for currency effects. Altogether, total international comparable sales grew by 6 per cent, or 7 per cent on a constant dollar basis.

Gross profit rose 8 per cent to $1.4 billion, and the gross margin improved by 60 basis points to 58.3 per cent. Operating income increased 1 per cent to $438.6 million, though the operating margin declined 110 basis points to 18.5 per cent. Diluted EPS for the quarter stood at $2.60, up from $2.54 in Q1 FY24, the release added.

Lululemon repurchased 1.4 million shares for $430.4 million and ended the quarter with 770 company-operated stores. Inventories grew 23 per cent to $1.7 billion, with unit volumes up 16 per cent. The company held $1.3 billion in cash and equivalents and had $393.4 million in available credit under its revolving facility.

Calvin McDonald, chief executive officer, stated: “In the first quarter, we achieved growth across channels, categories, and markets, including the US, reflecting the continued strength and agility of our business model. Additionally, guests responded well to the product innovations, newness, and brand activations we delivered around the world. As we navigate the dynamic macroenvironment, we intend to leverage our strong financial position and competitive advantages to play offense, while we continue to invest in the growth opportunities in front of us.”

Meghan Frank, chief financial officer, stated: “We delivered first quarter revenue growth at the high end of our guidance and are pleased with the start to our second quarter. Looking ahead, we remain focused on our strategy and continue to operate with discipline as we drive the business forward. We are grateful to our teams around the world who are enabling us to deliver these consistent results.”

ALCHEMPro News Desk (KD)