Lululemon beats on earnings but issues underwhelming guidance

Lululemon beat Wall Street expectations for fiscal fourth-quarter earnings and revenue, but issued 2025 guidance that disappointed analysts.

Shares of the apparel company fell about 6% in extended trading.

Here’s how the company did compared with what Wall Street was expecting for the quarter ended Feb. 2, based on a survey of analysts by LSEG:

• Earnings per share: $6.14 vs. $5.85 expected
• Revenue: $3.61 billion vs. $3.57 billion expected

Fourth-quarter revenue rose from $3.21 billion during the same period in 2023. Full-year 2024 revenue came in at $10.59 billion, up from $9.62 billion in 2023.

Lululemon’s fiscal 2024 contained 53 weeks, one week longer than its fiscal 2023. Excluding the 53rd week, fourth-quarter and full-year revenue both rose 8% year over year for 2024.

Lululemon expects first-quarter revenue to total $2.34 billion to $2.36 billion, while Wall Street analysts were expecting $2.39 billion, according to LSEG. The retailer anticipates it will post full-year fiscal 2025 revenue of $11.15 billion to $11.30 billion, compared to the analyst consensus estimate of $11.31 billion.

For the first quarter, the company expects to post earnings per share in the range of $2.53 to $2.58, missing Wall Street’s expectation of $2.72, according to LSEG. Full-year earnings per share guidance came in at $14.95 to $15.15 per share, while analysts anticipated $15.31.

Lululemon reported a net income for the fourth quarter of $748 million, or $6.14 per share, compared with a net income of $669 million, or $5.29 per share, during the fourth quarter of 2023.

Comparable sales, which Lululemon defines as revenue from e-commerce and stores open at least 12 months, rose 3% year over year for the quarter. The comparison excludes the 53rd week of the 2024 fiscal year. Analysts expected the metric to rise 5.1%.

Comparable sales in the Americas were flat, while they grew 20% internationally.