Core Insights - Lululemon Athletica reported its Q2 fiscal 2025 results, surpassing earnings estimates but providing disappointing guidance for the full fiscal year, leading to a significant drop in stock price [2][3][7]. Financial Performance - Lululemon's international net revenue increased by 22%, with international comparable sales up 15% and gross profit rising 5% to $1.5 billion [3][4]. - In contrast, net revenue in the Americas grew by only 1%, and comparable sales in the Americas decreased by 4% [4][6]. - Overall, Lululemon's global net revenue increased by 7% to $2.5 billion, with total revenue for the quarter reported at $2.53 billion, slightly below analyst expectations of $2.54 billion [6][9]. Guidance and Market Reaction - The company revised its full-year revenue guidance for fiscal 2025 to a range of $10.85 billion to $11 billion, below the $11.18 billion expected by analysts [8][9]. - Lululemon's diluted earnings per share (EPS) guidance was lowered to between $12.77 and $12.97, significantly below the expected EPS of $14.45 [9][10]. External Factors Impacting Guidance - The decline in guidance is attributed to the expiration of the de minimis exemption and increased tariffs, which are expected to reduce gross profit by approximately $240 million [10][11][12]. - The removal of the de minimis exemption means higher costs for shipping goods valued under $800 to U.S. customers, potentially leading to reduced consumer spending [11][12]. Stock Performance - Following the earnings report, Lululemon's stock price fell by 19% to $166.94 per share, marking its lowest point in over five years [13]. - Year-to-date, Lululemon shares have lost more than 46% of their value, primarily due to concerns over the impact of tariffs on the company's import-heavy business model [14].