On March 27, 2025, Lululemon Athletica Inc (LULU, Financial) released its 8-K filing announcing its financial results for the fourth quarter and full fiscal year 2024. The company, known for designing, distributing, and marketing athletic apparel, footwear, and accessories, reported a notable increase in both revenue and earnings per share (EPS), surpassing analyst estimates.
Company Overview
Lululemon Athletica Inc (LULU, Financial) is a prominent player in the athletic apparel industry, offering a wide range of products including pants, shorts, tops, and jackets for leisure and athletic activities such as yoga and running. The company also provides fitness accessories and operates over 700 stores globally, alongside its e-commerce and wholesale channels.
Performance Highlights
For the fourth quarter of 2024, Lululemon reported a 13% increase in net revenue to $3.6 billion, exceeding the analyst estimate of $3.573 billion. The company's diluted EPS for the quarter was $6.14, surpassing the estimated EPS of $5.85. This performance underscores Lululemon's ability to innovate and expand its product offerings, as highlighted by CEO Calvin McDonald:
Our fourth quarter results exceeded our expectations as we continued to introduce more newness and innovation into our product assortment."
Financial Achievements and Industry Impact
Lululemon's financial achievements are significant in the retail-cyclical industry, where consumer preferences and economic conditions can greatly impact performance. The company's full-year revenue increased by 10% to $10.6 billion, with a diluted EPS of $14.64, both surpassing annual estimates. This growth is crucial as it reflects Lululemon's resilience and strategic execution in a competitive market.
Key Financial Metrics
In the fourth quarter, Lululemon's gross profit rose by 15% to $2.2 billion, with a gross margin improvement of 100 basis points to 60.4%. Operating income increased by 14% to $1.0 billion, and the operating margin expanded by 40 basis points to 28.9%. These metrics are vital as they indicate the company's efficiency in managing costs and maximizing profitability.
| Metric | Q4 2024 | Q4 2023 | FY 2024 | FY 2023 |
|---|---|---|---|---|
| Net Revenue | $3.6 billion | $3.2 billion | $10.6 billion | $9.6 billion |
| Diluted EPS | $6.14 | $5.29 | $14.64 | $12.20 |
| Gross Margin | 60.4% | 59.4% | 59.2% | 58.3% |
Analysis and Outlook
Lululemon's robust performance in 2024, particularly its international revenue growth of 38%, highlights its successful global expansion strategy. The company's focus on product innovation and market expansion, as part of its "Power of Three ×2" growth plan, positions it well for future growth. CFO Meghan Frank emphasized the company's strategic agility:
We look forward to building on our growth in 2025, while remaining agile as we navigate ongoing macro uncertainties."
Overall, Lululemon Athletica Inc (LULU, Financial) has demonstrated strong financial health and strategic foresight, making it an attractive consideration for value investors seeking opportunities in the retail sector. For more detailed insights and analysis, visit GuruFocus.com.
Explore the complete 8-K earnings release (here) from Lululemon Athletica Inc for further details.
