# LULULEMON ATHLETICA INC. (LULU) Q2 2025 Financial Results Summary
On September 4, 2025, lululemon athletica inc. (NASDAQ:LULU) announced its financial results for the second quarter of fiscal 2025, which concluded on August 3, 2025.
### Key Highlights from Q2 2025:
– **Revenue**:
– Increased **7%** to **$2.5 billion** (up **6%** on a constant dollar basis).
– **Americas** net revenue grew **1%**.
– **International** net revenue surged **22%** (or **20%** on a constant dollar basis).
– **Comparable Sales**:
– Overall, comparable sales rose **1%**.
– **Americas** comparable sales decreased **4%** (or **3%** on a constant dollar basis).
– **International** comparable sales increased **15%** (or **13%** on a constant dollar basis).
– **Gross Profit**:
– Increased **5%** to **$1.5 billion**.
– Gross margin decreased by **110 basis points** to **58.5%**.
– **Income from Operations**:
– Decreased **3%** to **$523.8 million**.
– Operating margin decreased by **210 basis points** to **20.7%**.
– **Diluted Earnings Per Share (EPS)**:
– Reported at **$3.10**, down from **$3.15** in Q2 2024.
– **Share Repurchase**:
– The company repurchased **1.1 million** of its shares at a cost of **$278.5 million**.
– **Store Expansion**:
– Added **14** net new company-operated stores, ending the quarter with a total of **784** stores.
### Other Financial Metrics:
– **Effective Income Tax Rate**:
– Increased to **30.5%**, compared to **29.6%** in Q2 2024.
### Balance Sheet Highlights:
– **Cash and Cash Equivalents**:
– At the end of the quarter, lululemon reported **$1.2 billion** in cash and equivalents.
– **Inventories**:
– Increased **21%** to **$1.7 billion** compared to **$1.4 billion** at the end of Q2 2024.
– On a unit basis, inventories rose **13%**.
### 2025 Full-Year Outlook:
– Expected net revenue for Q3 2025 is projected in the range of **$2.470 billion to $2.500 billion**, indicating growth of **3% to 4%**.
– Diluted EPS for Q3 is anticipated to be between **$2.18 and $2.23**.
– For the full year, lululemon now expects net revenue between **$10.850 billion and $11.000 billion**, reflecting growth of **2% to 4%**, or **4% to 6%** excluding the impact of the 53rd week of 2024.
– Diluted EPS for the year is now projected to be in the range of **$12.77 to $12.97**.
### Challenges & Management Statements:
– CEO Calvin McDonald expressed disappointment regarding U.S. business results and noted a commitment to improving merchandise mix and growth initiatives.
– CFO Meghan Frank indicated the company exceeded EPS expectations but fell short on revenue guidance primarily due to challenges in the U.S. market and increasing industry-wide costs, including tariffs.
### Conclusion:
Lululemon athletica inc. showed a mixed performance in Q2 2025, with international segments performing well, while the U.S. market posed challenges. The company remains focused on strategic investments and addressing operational weaknesses as it approaches the latter half of the fiscal year.
| Second Quarter | 2025 | 2024 | First Two Quarters | 2025 | 2024 |
|---|---|---|---|---|---|
| Net revenue | $2,525,219 | $2,371,078 | $4,895,879 | $4,579,969 | |
| Costs of goods sold | 1,048,017 | 958,893 | 2,035,551 | 1,892,716 | |
| Gross profit | 1,477,202 | 1,412,185 | 2,860,328 | 2,687,253 | |
| As a percentage of net revenue | 58.5% | 59.6% | 58.4% | 58.7% | |
| Selling, general and administrative expenses | 951,658 | 871,959 | 1,894,529 | 1,714,385 | |
| As a percentage of net revenue | 37.7% | 36.8% | 38.7% | 37.4% | |
| Amortization of intangible assets | 1,730 | — | 3,360 | — | |
| Income from operations | 523,814 | 540,226 | 962,439 | 972,868 | |
| As a percentage of net revenue | 20.7% | 22.8% | 19.7% | 21.2% | |
| Other income (expense), net | 9,737 | 17,994 | 21,523 | 41,277 | |
| Income before income tax expense | 533,551 | 558,220 | 983,962 | 1,014,145 | |
| Income tax expense | 162,646 | 165,298 | 298,485 | 299,802 | |
| Net income | $370,905 | $392,922 | $685,477 | $714,343 | |
| Basic earnings per share | $3.10 | $3.15 | $5.71 | $5.70 | |
| Diluted earnings per share | $3.10 | $3.15 | $5.70 | $5.69 | |
| Basic weighted-average shares outstanding | 119,600 | 124,721 | 120,116 | 125,358 | |
| Diluted weighted-average shares outstanding | 119,680 | 124,857 | 120,262 | 125,600 |
| August 3, 2025 | February 2, 2025 | July 28, 2024 | |
|---|---|---|---|
| ASSETS | |||
| Current assets | |||
| Cash and cash equivalents | $1,155,794 | $1,984,336 | $1,610,112 |
| Inventories | 1,722,570 | 1,442,081 | 1,429,043 |
| Prepaid and receivable income taxes | 323,227 | 182,253 | 210,969 |
| Other current assets | 327,137 | 371,632 | 321,620 |
| Total current assets | 3,528,728 | 3,980,302 | 3,571,744 |
| Property and equipment, net | 1,917,361 | 1,780,617 | 1,614,893 |
| Right-of-use lease assets | 1,605,009 | 1,416,256 | 1,302,947 |
| Goodwill and intangible assets, net | 182,215 | 171,191 | 23,925 |
| Deferred income taxes and other non-current assets | 290,126 | 254,926 | 230,626 |
| Total assets | $7,523,439 | $7,603,292 | $6,744,135 |
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||
| Current liabilities | |||
| Accounts payable | $373,333 | $271,406 | $317,348 |
| Accrued liabilities and other | 423,933 | 559,463 | 396,423 |
| Accrued compensation and related expenses | 148,895 | 204,543 | 174,702 |
| Current lease liabilities | 297,919 | 275,154 | 278,067 |
| Current income taxes payable | 26,746 | 183,126 | 19,231 |
| Unredeemed gift card liability | 252,334 | 308,352 | 250,754 |
| Other current liabilities | 34,186 | 37,586 | 32,126 |
| Total current liabilities | 1,557,346 | 1,839,630 | 1,468,651 |
| Non-current lease liabilities | 1,464,799 | 1,300,637 | 1,180,823 |
| Deferred income tax liability | 62,400 | 98,188 | 28,876 |
| Other non-current liabilities | 51,615 | 40,790 | 34,140 |
| Stockholders’ equity | 4,387,279 | 4,324,047 | 4,031,645 |
| Total liabilities and stockholders’ equity | $7,523,439 | $7,603,292 | $6,744,135 |
