Shares of Lululemon Athletica (NASDAQ: LULU) plunged 20% following the release of its first-quarter earnings report, which disappointed investors with weaker-than-expected comparable sales and a trimmed outlook for the remainder of the year.
For Q1, the athletic apparel giant reported earnings of $2.60 per share, a modest increase from $2.54 per share a year earlier. Revenue rose 7% year-over-year to $2.37 billion, but that growth failed to excite the market, particularly as comparable sales climbed only 1%, falling sharply short of the 4.1% growth analysts had anticipated.
The regional breakdown revealed deeper concerns. Same-store sales in the Americas declined 2%, signaling waning momentum in Lululemon’s core market. In contrast, international markets remained a bright spot, with comparable sales rising 6% for the quarter. However, those gains weren’t enough to offset sluggish performance at home. Meanwhile, inventories swelled 23% to $1.7 billion, raising questions about demand and inventory management.
Adding to the stock’s decline, Lululemon issued softer guidance for Q2. The company now expects earnings of $2.85 to $2.90 per share on revenue of $2.535 billion to $2.56 billion—both below FactSet consensus estimates of $2.94 EPS on $2.549 billion in revenue.
Looking further ahead, Lululemon cut its full-year 2025 earnings forecast to between $14.58 and $14.78 per share, down from a previous range of $14.95 to $15.15. It now expects sales of $11.15 billion to $11.3 billion for the year.
