Lululemon reported Q2 fiscal 2025 results :

Headline Results (Q2 FY25 vs. Q2 FY24)

• Net revenue rose 7% to $2.5B (6% constant currency).
• Comparable sales increased just 1%.
• International strength: revenue up 22% (20% constant currency); comparable sales up 15% (13% constant currency).
• Americas weakness: revenue up only 1%; comparable sales down 4% (–3% constant currency).
• Gross margin fell 110 bps to 58.5%.
• Operating income slipped 3% to $523.8M; margin down 210 bps to 20.7%.
• Diluted EPS $3.10, slightly below last year’s $3.15.
Balance Sheet & Operations
• Ended quarter with $1.2B cash and $393M revolver capacity.
• Inventories up 21% YoY to $1.7B (13% unit growth).
• Repurchased 1.1M shares for $278.5M.
• Added 14 net new stores, reaching 784.

Outlook
• Q3 FY25: Revenue $2.47–$2.50B (+3–4%), EPS $2.18–$2.23.
• FY25: Revenue $10.85–11.0B (+2–4%, or +4–6% excluding 53rd week in FY24). EPS $12.77–12.97.
• Guidance reflects $240M hit to gross profit from higher U.S. tariffs and the end of the de minimis exemption, even after mitigation efforts.
Management Commentary
• CEO Calvin McDonald acknowledged U.S. underperformance and product execution issues, promising adjustments to merchandise mix and growth plans.
• CFO Meghan Frank noted EPS beat but revenue miss, driven mainly by U.S. weakness, and flagged tariff headwinds as a major challenge.

Overall, lululemon continues to benefit from international momentum, but U.S. softness, tariffs, and inventory build weigh on results and guidance.