Core Insights - lululemon athletica inc. (LULU) reported second-quarter fiscal 2025 results with earnings per share (EPS) of $3.10, which beat the Zacks Consensus Estimate of $2.53, but revenues of $2.5 billion fell short of the expected $2.84 billion, reflecting a year-over-year decline driven by softness in the Americas [1][2][4][7] Financial Performance - The company's EPS declined 1.6% year over year from $3.15 to $3.10, despite surpassing estimates [2] - Quarterly revenues increased 7% year over year to $2.5 billion but missed expectations, with net revenues growing 1% in the Americas and 22% internationally [4][8] - Total comparable sales rose 1% year over year, with a 4% decline in the Americas and a 15% increase internationally [5] - Gross profit improved 5% year over year to $1.48 billion, but gross margin contracted by 110 basis points to 58.5% due to increased markdowns and tariff impacts [10][11] Operational Insights - The company opened 14 net new stores in the second quarter, bringing the total to 784 stores as of August 3, 2025 [14] - For fiscal 2025, lululemon plans to open 40-45 net new stores, with a focus on international markets, particularly China [15][16] Guidance and Outlook - Lululemon lowered its revenue and EPS guidance for fiscal 2025, now expecting net revenues of $10.85-$11 billion, down from the previous estimate of $11.15-$11.3 billion [20][21] - The company anticipates a 300-bps year-over-year decline in gross margin, primarily due to increased tariffs and the removal of the de minimis exemption [23][30] - For the third quarter of fiscal 2025, lululemon expects net revenues of $2.47-$2.5 billion, indicating 3-4% year-over-year growth, with an expected EPS of $2.18-$2.23 [29][32] Inventory and Capital Expenditure - As of the end of the second quarter, lululemon had cash and cash equivalents of $1.6 billion and inventories rose 21% year over year to $1.7 billion [17] - The company expects capital expenditures of $700-$720 million for fiscal 2025, down from earlier estimates [28]