Core Insights - Lululemon's CEO Kevin McDonald is stepping down, with the current CFO and chief commercial officer taking over as co-CEOs during the search for a permanent successor [1][2] - The company's earnings for the third quarter were reported at $2.59 billion, exceeding analyst expectations of $2.25 billion, marking a 7% increase year-over-year [2][3] - Gross margin improved to 55.6%, surpassing the expected 54.3%, despite concerns about discounting during the Black Friday weekend [4] Financial Performance - Third quarter revenues reached $2.59 billion, higher than the anticipated $2.48 billion [2][3] - Same-store sales increased by 1%, but comparable sales in America decreased by 5%, indicating that international sales were a key driver of growth [3] - A billion-dollar increase in the company's buyback program was announced [4] Future Guidance - The guidance for the fourth quarter is weaker than expected, with earnings projected between $4.66 and $4.76, compared to the previous expectation of $5.03 [5] - Fourth quarter revenue expectations are set between $3.5 billion and $3.59 billion, slightly below the anticipated $3.6 billion [5]

Group 1: Company Earnings Reports - Costco (COST) reported Q1 earnings per share (EPS) of $4.50, exceeding the estimated $4.28, with total revenue reaching $67.31 billion against an estimate of $67.07 billion, and comparable sales rose 6.4% [3][9] - Broadcom (AVGO) posted Q4 adjusted net revenue of $18.02 billion, surpassing the $17.47 billion estimate, with semiconductor solutions revenue at $11.07 billion, beating the $10.74 billion estimate, and adjusted EPS of $1.95, exceeding the $1.87 consensus [4][9] - Lululemon (LULU) announced Q3 net revenue of $2.57 billion, topping the $2.48 billion estimate, and EPS of $2.59, significantly higher than the $2.22 forecast, but projected Q4 net revenue between $3.50 billion and $3.59 billion, below the consensus estimate of $3.59 billion [5][6][9] Group 2: Market Performance - U.S. equity markets showed mixed performance, with the Dow Jones Industrial Average closing up 650.12 points (1.35%) at 48,707.87, while the Nasdaq Composite dipped 65.89 points (0.28%) to close at 23,588.26, and the S&P 500 posted a modest gain of 12.46 points (0.18%) at 6,899.14 [7][9] Group 3: Leadership Changes - Lululemon announced a significant leadership change with CEO Calvin McDonald set to step down, introducing uncertainty alongside its mixed Q4 guidance [6][9]

About this content About Emily Jarvie Emily began her career as a political journalist for Australian Community Media in Hobart, Tasmania. After she relocated to Toronto, Canada, she reported on business, legal, and scientific developments in the emerging psychedelics sector before joining Proactive in 2022. She brings a strong journalism background with her work featured in newspapers, magazines, and digital publications across Australia, Europe, and North America, including The Examiner, The Advocate, ...

Financial Performance - Total revenue reached $2.6 billion, a 7% increase[2] - Diluted EPS was $2.59, a 10% decrease[2] - Total comparable sales increased by 2%[2, 11] Segment Performance - Women's apparel revenue increased by 6%[6] - Men's apparel revenue increased by 8%[6] - Accessories and other revenue increased by 12%[6] - Digital revenue increased by 13%[7] - Store revenue was flat[7] Geographic Performance - Americas revenue decreased by 2%[8] - International revenue increased by 33%[8]

Core Insights - Lululemon Athletica, Inc. reported strong third quarter earnings, surpassing analyst expectations on both earnings per share and revenue [1][2] - The company announced a leadership change with CEO Calvin McDonald set to step down in January 2026, while interim co-CEOs will be appointed [3] Financial Performance - Quarterly earnings were reported at $2.59 per share, exceeding the analyst estimate of $2.27 by 14.15% [2] - Quarterly revenue reached $2.57 billion, surpassing the Street estimate of $2.48 billion and increasing from $2.4 billion in the same period last year [2][6] - Net revenue increased by 7% to $2.6 billion, with international net revenue rising by 33% [7] Sales Performance - Comparable sales increased by 1%, or 2% on a constant dollar basis, while Americas comparable sales decreased by 5% [7] - International comparable sales saw an increase of 18% [7] Future Outlook - The company raised its fiscal 2025 GAAP EPS guidance to a range of $12.92 to $13.02, slightly above the $12.95 analyst estimate [6] - Fiscal revenue outlook was also raised to between $10.96 billion and $11.05 billion, compared to the $10.979 billion estimate [6] - The company expressed optimism about early performance as it enters the holiday season [5] Stock Activity - Following the earnings report, Lululemon stock gained 6.95%, reaching $200.50 in extended trading [6] Share Repurchase Program - The board approved a $1 billion increase to the company's stock repurchase program [3]

The company said CEO Calvin McDonald would be stepping down in January. ...

Lululemon Athletica said that CEO Calvin McDonald was leaving the company without a replacement and raised its annual profit forecast, sending shares up about 10% in extended trade on Thursday. ...

Revenue Performance - Net revenue increased by 7% to $2.6 billion, with comparable sales rising by 1% or 2% on a constant dollar basis[98] - Net revenue for the third quarter of 2025 was $1,733,382, a decrease of 2.1% compared to $1,770,382 in 2024, primarily due to a 5% decrease in comparable sales[120] - Year-to-date net revenue for the first three quarters of 2025 was $7,461,799, a 7% increase from $6,976,629 in 2024, with significant contributions from China Mainland and Rest of World[130] - Total net revenue increased by 7% in the third quarter of 2025 compared to the same period in 2024, with a notable 46% increase in the China Mainland market[158] - Net revenue in the Americas segment increased by $32,078 to $5,166,157, a growth of 0.6% year-over-year[137] - In China Mainland, net revenue surged by $290,048 to $1,226,361, representing a 31.0% increase compared to $936,313 in 2024[140] - The Rest of World segment reported a net revenue increase of $163,044, reaching $1,069,281, an 18.0% growth year-over-year[142] Profitability and Expenses - Income from operations decreased by 11% to $435.9 million, resulting in an operating margin decline of 350 basis points to 17.0%[108] - Gross profit increased by 2% to $1.4 billion, but gross margin decreased by 290 basis points to 55.6%[98] - Selling, general and administrative expenses rose by 8.6% to $988.3 million, accounting for 38.5% of net revenue[113] - Net income for the third quarter of 2025 was $306,835, a decrease of 12.8% from $351,870 in 2024, primarily due to increased selling, general and administrative expenses[129] - Gross profit in the Americas segment decreased to $981,861, down 10.2% from $1,092,921 in the previous year, attributed to lower product margins and higher occupancy costs[120] - Selling, general and administrative expenses rose to $2,882,783, reflecting an increase of $258,571 or 9.9% from $2,624,212 in 2024[132] - Other income decreased by 57.4% to $5,854, primarily due to lower interest income from decreased cash balances and interest rates[127] Market Performance - Americas comparable sales decreased by 5%, while China Mainland comparable sales increased by 24% or 25% on a constant dollar basis[98] - The increase in net revenue was primarily driven by growth in China Mainland and Rest of World, partially offset by a decline in the Americas[112] - Comparable sales in China Mainland increased by 16%, driven by higher e-commerce traffic[140] - Comparable sales in the Americas decreased by 5% in the third quarter of 2025, while China Mainland saw a 24% increase[158] Tax and Corporate Expenses - The effective tax rate increased to 30.5% in 2025 from 30.2% in 2024, primarily due to adjustments upon the filing of income tax returns[128] - The effective tax rate increased to 30.4%, up 60 basis points from 29.8% in 2024[146] - Corporate expenses decreased by $4.1 million to $339.6 million, mainly due to lower employee costs and decreased incentive compensation[126] - Corporate expenses rose to $1.0 billion, an increase of $61.5 million compared to the previous year, primarily due to higher technology and marketing costs[144] Cash Flow and Liquidity - Cash provided by operating activities was $459.6 million in the first three quarters of 2025, a decrease of $411.7 million compared to $871.3 million in 2024[162] - As of November 2, 2025, the company's cash and cash equivalents totaled $1.035 billion, with working capital excluding cash at $1.046 billion[167] - The company believes its liquidity resources will be adequate to meet capital expenditure requirements for at least the next 12 months[166] - As of November 2, 2025, the company held cash and cash equivalents of $1.0 billion[184] - The committed revolving credit facility provides available borrowings up to $600.0 million, with no outstanding borrowings other than letters of credit and guarantees of $7.0 million as of November 2, 2025[183] Inventory and Operations - The inventory balance increased by 11% to $2.0 billion as of November 2, 2025, compared to October 27, 2024[169] - The company operated 796 stores globally as of November 2, 2025, an increase from 767 stores in February 2025[174] - The company repurchased 3.5 million shares at a total cost of $906.6 million in the first three quarters of 2025, down from 4.2 million shares costing $1.3 billion in the same period of 2024[165] Economic Factors - Increased tariffs and the removal of the de minimis exemption are expected to reduce income from operations by approximately $210 million for 2025[105] - Foreign currency fluctuations negatively impacted net revenue growth by $15.4 million compared to the first three quarters of 2024[109] - The company experienced a $15.4 million decrease in revenue due to fluctuations in foreign currency exchange rates in the first three quarters of 2025 compared to the same period in 2024[177] - Inflationary pressures, including higher product, transportation, labor, and raw material costs, may adversely affect operating results if not offset through pricing or efficiencies[186]

Core Viewpoint - Lululemon's CEO Calvin McDonald will step down effective January 31 due to a year of underperformance, with the company facing challenges in the athleisure market and increased competition [1][4]. Company Leadership - The board of directors is conducting a search for a new CEO with the assistance of a leading executive search firm, while McDonald will remain as a senior advisor until March 31 [2]. CEO's Statement - McDonald expressed pride in his tenure and the accomplishments of the team, highlighting the potential for future growth and the importance of the product pipeline and action plan in delivering shareholder value [3]. Business Challenges - Lululemon has faced pressure from tariffs, a weak U.S. consumer market, and a product assortment that has not resonated with shoppers as effectively as before. The company is also contending with competition from brands like Vuori and Alo Yoga, as consumer preferences shift away from traditional athleisure items [4]. Growth Strategy - To drive growth, Lululemon is expanding internationally and diversifying its product offerings beyond workout gear to include shoes, outerwear, and casual pants suitable for work. While overall business growth is occurring, it is primarily fueled by international markets and new store openings, with the Americas market experiencing a decline [5]. Tariff Impact - The company is particularly affected by the end of the de minimis exemption, which previously allowed low-value packages to enter the U.S. duty-free. Lululemon anticipates that tariffs will impact its full-year profits by $240 million, primarily due to this exemption ending [6].

Exhibit 99.1 LULULEMON ATHLETICA INC. ANNOUNCES THIRD QUARTER FISCAL 2025 RESULTS BOARD OF DIRECTORS AUTHORIZES $1.0 BILLION INCREASE IN ITS STOCK REPURCHASE PROGRAM Revenue increased 7% to $2.6 billion Comparable sales increased 1%, or 2% on a constant dollar basis Diluted EPS of $2.59 Vancouver, British Columbia – December 11, 2025 – lululemon athletica inc. (NASDAQ:LULU) today announced financial results for the third quarter of fiscal 2025, which ended on November 2, 2025. Calvin McDonald, Chief Executi ...