Lululemon stock jumps as international growth helps to offset slowing U.S. sales

Lululemon stock jumps as international growth helps to offset slowing U.S. sales


Lululemon‘s U.S. growth is continuing to slow, but the athletic apparel retailer is making big gains abroad, leading to a 9% increase in sales year over year.

The yoga pants company on Thursday beat Wall Street’s expectations on the top and bottom lines and said it’s “pleased” with the start to the holiday season.

Here’s how Lululemon performed in its fiscal third quarter compared with what Wall Street was anticipating, based on a survey of analysts by LSEG:

  • Earnings per share: $2.87 vs. $2.69 expected
  • Revenue: $2.40 billion vs. $2.36 billion expected

Shares climbed about 8% in extended trading Thursday.

The company’s reported net income for the three-month period that ended Oct. 27 was $352 million, or $2.87 per share, compared with $249 million, or $1.96 per share, a year earlier

Sales rose to $2.40 billion, up about 9% from $2.20 billion a year earlier.

For the all-important holiday shopping quarter, Lululemon is expecting revenue to be between $3.48 billion and $3.51 billion, representing growth of 8% to 10% from the prior year. Analysts were expecting revenue of $3.50 billion, or growth of 9.1%, which is roughly in line with the midpoint of the guidance, according to LSEG.

It’s expecting earnings per share to be between $5.56 and $5.64, the high end of which is ahead of the $5.59 analysts had expected, according to LSEG.

For the full year, Lululemon tightened its revenue guidance and raised it by just a hair. It now expects fiscal 2024 revenue to come in between $10.45 billion and $10.49 billion, compared to previous guidance of between $10.38 billion and $10.48 billion. The outlook would top the $10.44 billion that Wall Street had expected, according to LSG

It’s expecting earnings per share to be between $14.08 and $14.16, ahead of the $13.97 that analysts had expected.

Lululemon has hit a rough patch over the last year. It’s still growing, but at a slower pace than it was previously, and the competitive environment has gotten more intense. Lululemon has always competed with legacy giants like Nike, Gap’s Athleta and Levi‘s Beyond Yoga, but newer disrupters such as Vuori and Alo Yoga are also taking share from the Canadian retailer. 

The company has turned to China for growth, which so far is lifting sales across the overall business. Company-wide comparable sales grew 4% during the quarter, ahead of the 3.2% growth Wall Street was anticipating, according to StreetAccount.

Behind that number is a 2% slowdown in comparable sales in the U.S., but a 25% increase internationally. Overall revenue grew 2% in the Americas during the quarter and 33% internationally. Still, the Americas remains Lululemon’s largest market, and international is still a fraction of its overall revenue. 

Lululemon has also had a few self-inflicted challenges. It fumbled a high-profile product launch earlier this year and missed out on sales in the U.S. when it failed to offer the colors and sizes that its core customers desired.

When the company reported earnings in August, CEO Calvin McDonald insisted that the brand remains strong in the U.S., but its women’s business had slowed because it didn’t have enough new styles to entice customers. 

All of these issues coincided with the departure of Lululemon’s longtime chief product office Sun Choe, who resigned in May and joined V.F. Corp. It also came at a time when consumers, reeling from persistent inflation and an economy that feels worse than perhaps it actually is, are choosier than ever and less forgiving when a brand makes a mistake. 

Amid its rough patch, Lululemon has turned to stock buybacks to keep Wall Street happy. It approved a $1 billion increase to its stock repurchase program this month. As of Thursday, it had approximately $1.8 billion remaining in the program.

Lululemon has also focused on boosting profitability amid uncertain demand. During the third quarter, gross margin grew more than expected, increasing by 1.5 percentage points to 58.5%, ahead of the 57.5% that analysts had expected, according to StreetAccount.



Source

Divided Fed proposes rule to ease capital requirements for big Wall Street banks
World

Divided Fed proposes rule to ease capital requirements for big Wall Street banks

The New York Stock Exchange in lower Manhattan on Nov. 24, 2020 in New York City. Spencer Platt | Getty Images News | Getty Images The Federal Reserve on Wednesday proposed easing a key capital rule that banks say has limited their ability to operate, drawing dissent from at least two officials who say the […]

Read More
Nvidia shares head for record close as Wall Street shrugs off China concerns
World

Nvidia shares head for record close as Wall Street shrugs off China concerns

Jensen Huang, CEO of Nvidia, holds a motherboard as he speaks during the Viva Technology conference dedicated to innovation and startups at Porte de Versailles exhibition center in Paris, France, June 11, 2025. Gonzalo Fuentes | Reuters Nvidia shares rose nearly 3% on Wednesday and headed for a record close for the first time since […]

Read More
BP shares jump 7% on report it is in early-stage talks to be acquired by Shell
World

BP shares jump 7% on report it is in early-stage talks to be acquired by Shell

The BP logo is displayed outside a petrol station that also offers electric vehicle recharging, on Feb. 27, 2025, in Somerset, England. Anna Barclay | Getty Images News | Getty Images BP shares jumped Wednesday on a report that the oil major is in early-stage talks to be acquired by Shell. People familiar with the […]

Read More