Lululemon shares fell 20% after the company issued a full-year outlook that was much worse than expected, as tariffs cut into its profits.
The company beat second-quarter earnings estimates but slightly fell short of revenue expectations.
For Q2 2025, net revenue increased by 7% to $2.5 billion. Revenue in the Americas region grew by 1%, while comparable sales in the region declined by 4%, or 3% on a constant dollar basis, compared to 2024.
Calvin McDonald, CEO told investors, “While we continued to see positive momentum overall in our international regions in the second quarter, we are disappointed with our U.S. business results and aspects of our product execution. We have closely assessed the drivers of our underperformance and are continuing to take the necessary actions to strengthen our merchandise mix and accelerate our business. We feel confident in the opportunity ahead and plans we have in place to drive long-term growth.”
Meghan Frank, Lululemon CFO stated: “In the second quarter, we exceeded expectations on EPS, but revenue fell short of our guidance driven predominantly by our U.S. business. We are also navigating industry-wide challenges, including higher tariff rates. In light of these dynamics, we are revising our full year outlook. As we begin the back half of the year, our brand and balance sheet remain strong, and we will continue to exercise financial discipline and strategically invest in our growth potential.”
For the third quarter of 2025, the Company anticipates net revenue between $2.470 billion and $2.500 billion, reflecting a growth of 3% to 4%. Diluted earnings per share are projected to range from $2.18 to $2.23 for the quarter.
By CEO NA Editorial Staff
