Thu, Jun 5, 8:14 PM (39 days ago)
**lululemon athletica inc. (LULU) Q1 2025 Financial Summary** **Financial Health & Performance:** - **Revenue:** $2.4 billion, up 7% YoY (8% on a constant dollar basis). - **Profit Margins:** Gross margin increased by 60 basis points to 58.3%. Operating margin decreased by 110 basis points to 18.5%. - **Earnings:** Net income was $314.6 million, down 2.1% YoY. Diluted earnings per share were $2.60, up from $2.54 in Q1 2024. **Cash Flow:** - **Operating Cash Flow:** Negative $118.9 million, a decrease of $246.5 million YoY. - **Investing Cash Flow:** Negative $106.8 million, an improvement of $24.7 million YoY. - **Financing Cash Flow:** Negative $468.0 million, an increase in outflows of $139.3 million YoY. **Segment Performance:** - **Americas:** Net revenue increased by 3.2% YoY, with comparable sales down 2%. Gross margin improved by 100 basis points. - **China Mainland:** Net revenue increased by 21.2% YoY, with comparable sales up 7%. Gross margin improved by 230 basis points. - **Rest of World:** Net revenue increased by 16% YoY, with comparable sales up 6%. Gross margin decreased by 10 basis points. **Trends & Uncertainties:** - **Macroeconomic Conditions:** Inflation, consumer demand, and foreign currency fluctuations negatively impacted results. - **Tariffs:** Recently imposed tariffs increased inventory costs, potentially reducing gross margin and income from operations. - **Seasonality:** The business is affected by seasonal trends, with a significant portion of operating profits typically generated in the fourth quarter. **Future Operations Impact:** - **Store Expansion:** The company plans to continue expanding its store footprint and investing in technology and distribution centers. - **Stock Repurchases:** The company repurchased 1.4 million shares in Q1 2025, totaling $434.4 million. - **Legal Proceedings:** The company is involved in several legal proceedings, including securities class actions and stockholder derivative complaints. **Liquidity & Capital Resources:** - **Cash & Cash Equivalents:** $1.3 billion as of May 4, 2025. - **Credit Facilities:** The company has access to $400 million under its Americas revolving credit facility and $41.3 million under its China Mainland facility. - **Inventory:** Inventory increased by 23% YoY to $1.7 billion. **Risk Factors:** - **Brand & Competition:** The company faces risks related to maintaining its brand value and competing effectively in a highly competitive market. - **Supply Chain:** The company is exposed to risks associated with its international supply chain, including geopolitical events, trade restrictions, and natural disasters. - **Currency Fluctuations:** The company is exposed to foreign currency exchange risks, which can impact its financial results. **Outlook:** - The company expects ongoing exchange rate volatility and macroeconomic conditions to continue affecting its financial results. - The company plans to continue investing in its business, including store expansion, technology, and distribution centers, while managing costs and mitigating risks.