Markets outside the Americas were vital to Lululemon surpassing annual revenues of $10 billion for the first time in 2024.
For Lululemon, International sales grew by 36 percent on a constant-dollar basis last year while revenues in Americas increased by a more modest 4 percent. Comparable sales, meanwhile, expanded by 4 percent in FY24 with international up by 24 percent on a constant-dollar basis and Americas down by 1 percent. Brick-and-mortar sales increased by 14 percent and ecommerce revenues were up by 6 percent for the FY. Men’s sales rose by 14 percent with women’s improving by 9 percent. Annual gross margin rose by 90 basis points to 59.2 percent as operating income widened by 17 percent to $2.5 billion. FY net income, meanwhile, increased by 17.1 percent to top $1.81 billion.
In Q4, Lululemon’s operating income jumped by 14.0 percent to $1.04 billion on 12.7 percent sales growth to $3.61 billion from $3.21 billion. International sales increased by 40 percent on a constant-dollar basis while Americas’ revenues rose by 8 percent. Comparable international sales increased by 22 percent and were up 4 percent in the Americas compared to a flat year-ago quarter. Constant-currency sales in Mainland China were up by 48 percent to $425.0 million and by 33 percent in Rest of World to $392.4 million. Women’s product sales rose by 11 percent and men’s increased by 17 percent, fueled by strong sales for outerwear and second layers. Within the women’s segment, strong products during the holiday quarter were Glow Up tights, BeCalm relaxed it yoga wear, and Daydrift casual pants. Gross margin improved by 100 basis points to 60.4 percent on lower product costs and fewer markdowns that was partially offset by currency headwinds and freight expense. Net income grew by 11.8 percent to $748.4 million. At year-end, the company operated 767 stores.
Looking ahead to 2025, the group is forecasting sales growth of 5 to 7 percent, or 7 to 8 percent excluding the 53rd week of 2024, to a range of $11.15 to $11.3 billion. Gross margin is forecast to fall by approximately 60 basis points due to tariffs and other impacts. The company will open 40 to 45 net new stores with two-thirds in Mainland China and 10 to 15 in North America. Franchise stores will debut in Denmark, Belgium, and Turkey with Italy opening as a directly operated market.
In Q1, revenues are projected to increase by 6 to 7 percent to a range of $2.335 to $2.355 billion.
