Lululemon (LULU) Stretches Past Earnings Estimates Despite Market Challenges

TLDR

Table of Contents

Lululemon reported Q4 earnings of $6.14 per share, beating estimates of $5.85
Q4 revenue reached $3.61 billion, surpassing consensus estimates by 0.90%
Full-year 2024 revenue rose 10% to $10.6 billion with diluted EPS of $14.64
International revenue increased 38% in Q4 and 34% for the full year
The company opened 18 new stores in Q4, bringing the total to 767 worldwide

Lululemon Athletica Inc. reported strong financial results for the fourth quarter of fiscal year 2024. The athletic apparel maker posted earnings of $6.14 per share.

This exceeded the Zacks Consensus Estimate of $5.85 per share. It also represents a significant improvement compared to earnings of $5.29 per share in the same quarter last year.

The quarterly report marked an earnings surprise of 4.96%. This continues a positive trend for the company.

Over the last four quarters, Lululemon has surpassed consensus EPS estimates every time. In the previous quarter, they delivered a surprise of 6.69%.

Revenue Growth

Revenue for the quarter ended January 2025 reached $3.61 billion. This surpassed analyst expectations by 0.90%.

The figure compares favorably to year-ago revenues of $3.21 billion. The company has topped consensus revenue estimates three times over the last four quarters.

For the full fiscal year 2024, Lululemon reported total revenue of $10.6 billion. This represents a 10% increase over the previous year.

The growth was powered by strong performance across markets. International revenue was particularly impressive.

International markets were a bright spot for Lululemon. The company saw international revenue increase by 38% in the fourth quarter.

For the full year, international revenue grew by 34%. This highlights the success of the company’s global expansion strategy.

During the quarter, Lululemon opened 18 new store locations. This brings their worldwide total to 767 stores.

The expansion aligns with the company’s “Power of Three ×2” growth plan. This ambitious strategy aims to double the business by 2026.

Profitability Improvements

Lululemon reported a 15% increase in gross profit to $2.2 billion for the quarter. The gross margin improved by 100 basis points to 60.4%.

Operating income rose by 14% to $1.0 billion. The operating margin was 28.9% for the quarter.

For the full year, income from operations increased by 17% to $2.5 billion. The operating margin rose by 150 basis points to 23.7%.

These metrics indicate improving efficiency in the company’s operations. They show Lululemon is growing while maintaining healthy margins.

Despite the strong earnings report, Lululemon shares have underperformed the broader market year-to-date. The stock has lost about 11.7% since the beginning of 2025.

This compares to the S&P 500’s smaller decline of 2.9% over the same period. The gap raises questions about investor sentiment toward the company.

The stock’s immediate price movement will likely depend on management’s commentary during the earnings call. Investors will be watching for guidance and strategic updates.

Future Outlook

Looking ahead, Lululemon’s management remains optimistic about growth prospects. The company expects revenue growth of 5% to 7% in fiscal 2025.

Analysts currently estimate earnings of $2.74 per share for the coming quarter. Revenue is expected to be $2.39 billion.

For the full fiscal year 2025, the consensus estimates project earnings of $15.36 per share. Revenue is forecast at $11.33 billion.

The company plans to enhance its product innovation and market expansion strategies. These initiatives support their long-term growth objectives.

The current consensus among analysts translates to a Zacks Rank #3 (Hold) for the stock. This suggests expectations that the shares will perform in line with the market in the near future.

The Textile – Apparel industry, to which Lululemon belongs, is currently in the top 32% of Zacks-ranked industries. Research indicates that top-ranked industries tend to outperform lower-ranked ones.

Lululemon continues to focus on its “Power of Three ×2” growth plan. The strategy aims to double the business by 2026 through product innovation and market expansion.

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