Core Insights - Lululemon exceeded Wall Street expectations for fiscal first-quarter earnings but lowered its full-year earnings guidance due to a challenging macroeconomic environment [1][2] - The company's shares fell approximately 20% in after-hours trading following the announcement [1] Financial Performance - For the fiscal first quarter, Lululemon reported a net income of $314 million, or $2.60 per share, compared to $321 million, or $2.54 per share, in the same quarter last year [5] - First-quarter revenue increased to $2.37 billion, up from about $2.21 billion during the same period in 2024 [5] - Comparable sales rose 1% year over year, which was below the anticipated 3% [9] Earnings Guidance - The company revised its full-year earnings per share guidance to a range of $14.58 to $14.78, down from the previous range of $14.95 to $15.15 [2] - For the second quarter, Lululemon expects earnings per share between $2.85 and $2.90, compared to Wall Street's expectation of $3.29 [7] Revenue Expectations - Lululemon anticipates second-quarter revenue to be between $2.54 billion and $2.56 billion, while full-year revenue is expected to remain unchanged at $11.15 billion to $11.3 billion [6] Market Context - The company is facing challenges from tariffs and a slowing U.S. economy, similar to other retailers who have also reduced their guidance [3][4] - Competitors in the athleticwear sector, such as Gap and Nike, are also adjusting their strategies in response to tariff impacts [4] Manufacturing and Supply Chain - In 2024, 40% of Lululemon's products were manufactured in Vietnam, with significant portions also produced in Cambodia, Sri Lanka, Indonesia, and Bangladesh [8] - The company relies on suppliers for manufacturing and does not own any production facilities [8] Margins and Stock Performance - Gross margin for the quarter was 58.3%, exceeding the expected 57.7% [9] - As of the latest close, Lululemon's stock has declined about 13% year-to-date [9]