The Canadian athleisure brand closed fiscal 2025 with a Q4 beat on revenue and earnings, carried by international markets. But 2026 guidance came in below analyst expectations, compounding concerns about its North American recovery.
Lululemon Athletica beat fourth-quarter expectations, but the athletic apparel maker forecast 2026 results below market estimates, as demand softness in North America and U.S. import tariffs weigh on costs.
For the quarter ended Feb. 1, 2026, the Vancouver-based company reported net revenue of $3.64 billion (€3.35 billion) and diluted earnings per share of $5.01 (€4.61), compared with analysts’ average estimates of $3.58 billion and $4.78, respectively, according to consensus figures. Revenue rose 1 percent year on year, or 6 percent excluding the extra trading week in fiscal 2024. EPS fell from $6.14 (€5.65) a year earlier.
International growth offsets Americas decline
The regional split remained pronounced. Americas revenue fell 4 percent in the quarter, or 5 percent in constant currency, while international revenue rose 17 percent, led by 24 percent growth in mainland China and 10 percent growth in the rest of the world. International comparable sales rose 20 percent.
Gross margin fell 550 basis points to 54.9 percent, with the company citing tariff-related costs as a key factor.
For the full fiscal year, Lululemon reported revenue of $11.1 billion (€10.21 billion), up 5 percent, and diluted EPS of $13.26 (€12.20), compared with $14.64 (€13.47) in fiscal 2024. The company added 44 net new stores, ending 2025 with 811 locations.
2026 guidance misses estimates
For fiscal 2026, Lululemon forecast revenue of $11.35 billion to $11.50 billion (€10.44 billion–€10.58 billion) and diluted EPS of $12.10 to $12.30 (€11.13–€11.32). Analysts had been expecting $11.51 billion of revenue and $12.58 of EPS.
For the first quarter, Lululemon projected revenue of $2.40 billion to $2.43 billion (€2.21 billion–€2.24 billion) and diluted EPS of $1.63 to $1.68 (€1.50–€1.55).
Interim co-CEO and CFO Meghan Frank said the company is focused on improving full-price sales, particularly in North America. Interim co-CEO and president André Maestrini said recent product launches have seen encouraging early responses.
The results were the first since CEO Calvin McDonald departed in December.
SGI Europe will publish a full earnings analysis in the coming hours.
