Lululemon Athletica (NASDAQ: LULU) stock plunged more than 13% in pre-market trading Friday after the company issued guidance that missed analysts’ expectations, overshadowing an otherwise solid fourth-quarter performance.
For the fourth quarter, Lululemon reported earnings per share (EPS) of $6.14, beating the consensus estimate of $5.82. Revenue also beat expectations, reaching $3.61 billion compared to the expected $3.57 billion.
The company posted a 13% year-over-year growth in total revenue, with net revenue in the Americas region rising by 7% and international revenue surging by 38%. However, total comparable sales grew by just 3% YoY, missing the analysts’ expectations of a 5% increase.
Lululemon also expanded its store footprint, opening 18 new locations during the quarter, bringing its total store count to 767 by the end of the period. Inventory levels rose 9% year-over-year to $1.4 billion.
The company ended the quarter with approximately $2 billion in cash and cash equivalents, providing a solid financial cushion moving into the new year.
CEO Calvin McDonald expressed satisfaction with the results, saying,
“Our fourth-quarter results exceeded our expectations as we continued to introduce more newness and innovation into our product assortment.”
He added that Lululemon remains focused on executing its “Power of Three ×2” growth plan and expects to roll out an exciting lineup of new products and brand activations for customers.
Lululemon’s “Power of Three ×2 growth plan” aims to double its business from $6.25 billion in net revenue in 2021 to $12.5 billion by 2026.
Guidance: Despite the positive results, the outlook for 2025 raised concerns among investors. For the first quarter of 2025, Lululemon (NASDAQ: LULU) expects revenue between $2.335 billion and $2.355 billion, below analysts’ expectations of $2.39 billion. The company also forecasts first-quarter earnings per share (EPS) between $2.53 and $2.58, missing the consensus estimate of $2.74 per share.
Lululemon expects full-year 2025 revenue between $11.15 billion and $11.3 billion and earnings per share of $14.95 to $15.15, both below analysts’ estimates.
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