Lululemon Q3 revenue beats estimates; CEO to step down

Overview

• Athletic apparel maker's fiscal Q3 revenue rose 7%, beating analyst expectations

• Separately, Lululemon Athletica announced CEO Calvin McDonald to step down effective Jan. 31

• Diluted EPS for fiscal Q3 was $2.59, down from $2.87 last year

• Company authorized $1.0 bln increase in stock repurchase program

• Shares of the company jumped about 7.1% in extended trading

Outlook

• Lululemon expects Q4 2025 revenue between $3.5 bln and $3.585 bln

• Company forecasts full-year 2025 revenue between $10.962 bln and $11.047 bln

• Lululemon anticipates Q4 2025 EPS between $4.66 and $4.76

Result Drivers

• INTERNATIONAL GROWTH - International net revenue increased 33%

• U.S. CHALLENGES - Americas net revenue decreased 2% and comparable sales fell 5%

• MARGIN PRESSURE - Gross margin decreased 290 basis points to 55.6%, due to higher costs

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 4 "strong buy" or "buy", 26 "hold" and 2 "sell" or "strong sell"

• The average consensus recommendation for the apparel & accessories peer group is "buy."

• Wall Street's median 12-month price target for Lululemon Athletica Inc is $183.00, about 2.5% below its December 10 closing price of $187.62

• The stock recently traded at 15 times the next 12-month earnings vs. a P/E of 14 three months ago

Press Release: ID:nBw8n2Nwsa

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