Q4 2025 Lululemon Athletica Inc Earnings Call Transcript
Key Points
- Lululemon Athletica Inc (LULU) reported a 6% increase in net revenue for Q4 2025, excluding the 53rd week, indicating solid growth.
- The company is seeing positive guest response to new product innovations such as Unrestricted Power, ThermoZen, and ShowZero.
- Lululemon Athletica Inc (LULU) maintained its position as the number one women's activewear brand in the US.
- International markets, particularly China Mainland and South Korea, showed strong revenue growth and positive guest engagement.
- The company is implementing a disciplined approach to capital spending, with new store openings and expansions showing high returns on investment.
- North America revenue was flat, with comparable sales down 2%, indicating challenges in the region.
- Gross margin decreased by 550 basis points in Q4 2025, primarily due to tariff impacts and higher markdowns.
- Operating margin for the full year 2026 is expected to decrease by approximately 250 basis points, reflecting ongoing cost pressures.
- The company anticipates a gross tariff impact of approximately $380 million in 2026, posing a significant cost challenge.
- Lululemon Athletica Inc (LULU) experienced a higher markdown penetration in 2025, which the company is working to reduce in 2026.
Thank you for standing by. This is the conference operator. Welcome to the lululemon athletica inc fourth-quarter 2025 earnings conference call.
(Operator Instructions) And the conference is being recorded.
(Operator Instructions) I would now like to turn the conference over to Howard Tubin, Vice President, Investor Relations for lululemon athletica. Please go ahead.
Thank you, and good afternoon. Welcome to lululemon's fourth-quarter earnings conference call. Joining me today are Meghan Frank, Interim Co-CEO and CFO; and Andre Maestrini, interim Co-CEO, President and Chief Commercial Officer. Before we get started, I'd like to take this opportunity to remind you that our remarks today will include forward-looking statements reflecting management's current forecast of certain aspects of lululemon's future. These statements are based on current information, which we have assessed, but by which its nature is dynamic and subject to rapid and even abrupt changes.
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