Lululemon Q2 Earnings: Revenue Miss, EPS Beat, Comps Up 2%, Strength In International, Soft Guidance

Lululemon Athletica Inc LULU reported financial results for the second quarter after market close Thursday. Here’s a rundown of the report.

Q2 Results: Lululemon reported second-quarter revenue of $2.371 billion, missing the consensus estimate of $2.409 billion, according to Benzinga Pro. The athleisure company reported second-quarter earnings of $3.15 per share, beating analyst estimates of $2.94 per share.

Total revenue was up 7% on a year-over-year basis and total comparable sales increased 2% year-over-year. Americas net revenue increased 1% year-over-year, while international revenue was up 29% year-over-year.

Lululemon's total store count was 721 at quarter's end after opening 10 new company-operated stores during the period. Inventories were down 14% year-over-year to $1.4 billion. The company ended the quarter with $1.6 billion in cash and equivalents.

“In the second quarter, lululemon delivered revenue and earnings growth, with ongoing strength across our international business. In the U.S., our teams continue to optimize our product assortment and remain focused on driving forward our opportunities in the market,” said Calvin McDonald, CEO of Lululemon.

“Looking ahead, we feel confident in the long runway in front of us as we execute on our Power of Three ×2 growth plan.”

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Outlook: Lululemon’s Power of Three ×2 growth plan calls for a doubling of the business from 2021 net revenue of $6.25 billion to $12.5 billion by 2026. The company said its growth strategy includes a plan to double men’s, double e-commerce and quadruple international net revenue relative to 2021.

Lululemon sees third-quarter revenue in the range of $2.34 billion to $2.365 billion. The company anticipates third-quarter earnings of $2.68 to $2.73 per share.

Full-year 2024 revenue is expected to be between $10.375 billion and $10.475 billion versus estimates of $10.618 billion. The company expects full-year earnings to be between $13.95 and $14.15 per share versus estimates of $14 per share.

Lululemon shares appear to be selling off in reaction to the company’s top-line miss and soft forward guidance for the full year. Management will hold a conference call to further discuss these results at 4:30 p.m. ET.

LULU Price Action: Lululemon shares were up 2.24% at $264.80 after-hours Thursday, according to Benzinga Pro.

Photo: Shutterstock.