Lululemon Reports 9% Revenue Growth to $2.4 Billion in Q3 Fiscal 2024

Lululemon Athletica Inc. reported a 9% increase in net revenue for the third quarter of fiscal 2024, reaching $2.4 billion, compared to $2.2 billion in the same period last year. The company's gross profit also rose by 12% to $1.4 billion, resulting in a gross margin of 58.5%, an increase of 150 basis points from the previous year. Net income for the quarter was $351.9 million, a 41.5% increase from $248.7 million in the third quarter of 2023. Diluted earnings per share improved to $2.87, up from $1.96 in the prior year.

In terms of operational performance, Lululemon's comparable sales increased by 4%, with notable growth in the China Mainland segment, which saw a 27% rise in comparable sales. The Americas segment, however, experienced a 2% decline in comparable sales, attributed to decreased conversion rates despite higher transaction values and increased e-commerce traffic. The company opened 28 new stores in the Americas, including 14 from its recent acquisition of retail operations in Mexico, which has been integrated into its financial results since September 10, 2024.

The company’s strategic developments included the acquisition of lululemon branded retail locations in Mexico, which is expected to enhance its market presence in the region. Additionally, Lululemon continues to expand its product offerings and geographic footprint, with 749 company-operated stores as of October 27, 2024, up from 711 at the beginning of the fiscal year. The company also reported a significant increase in its inventory levels, which rose to $1.8 billion, reflecting a strategic decision to support anticipated sales growth.

Lululemon's financial outlook remains cautiously optimistic, with management noting that macroeconomic conditions, including inflation and consumer spending behaviors, could impact future performance. The company is focused on maintaining its brand value and adapting to changing consumer preferences while managing costs effectively. The ongoing expansion into international markets, particularly in China and the Rest of World segment, is expected to drive future growth, although the company acknowledges potential risks associated with foreign currency fluctuations and global economic uncertainties.

Overall, Lululemon's third-quarter results reflect a strong performance amid a challenging retail environment, with strategic initiatives aimed at enhancing its market position and operational efficiency. The company remains committed to leveraging its brand strength and expanding its product lines to meet evolving consumer demands.