Lululemon Earnings: A Lukewarm Outlook

Core Insights - Lululemon reported a strong fourth quarter for 2024, with revenue growth of 13% and earnings per share increasing by 16%, surpassing analyst expectations [2][3] - Despite the solid performance, the company's guidance for fiscal 2025 is weak, projecting revenue growth of only 5% to 7%, which is below analyst consensus [3][4] - Increased competition and a challenging macroeconomic environment are significant concerns for Lululemon moving forward [4][6] Financial Performance - Q4 2023 revenue was $3.21 billion, increasing to$3.61 billion in Q4 2024, representing a 13% growth [1] - Earnings per share rose from $5.29 to$6.14, marking a 16% increase [1] - Comparable sales grew by 12% in Q4 2024, but this was a decline of 9 percentage points compared to the previous year [1] Market Reaction - Following the earnings report, Lululemon's shares fell approximately 6% in after-hours trading due to the disappointing guidance for 2025 [5] - The stock has shown volatility over the past few years, with little change compared to three years ago [5] Competitive Landscape - Lululemon faces increasing competition from newer brands like Vuori and Alo Yoga, which are impacting its market position [4][6] - International revenue grew significantly by 38% year over year, driven by new store openings and a 20% rise in comparable sales [2][6] - The company needs to focus on revitalizing comparable sales growth in the U.S. market [6]