Lululemon Athletica Inc. reported fiscal third‑quarter 2025 results on December 11, 2025, posting earnings per share of $2.59 versus the consensus estimate of $2.22, a beat of $0.37 or 16.7%. Revenue reached $2.57 billion, up 7% year‑over‑year and exceeding the $2.48 billion consensus by $0.09 billion.
International growth was the primary driver of the revenue increase. China Mainland sales surged 46% year‑over‑year, while the Rest of World segment grew 19%. In contrast, the Americas segment recorded a 2% decline in revenue and a 5% drop in comparable sales, reflecting continued softness in the U.S. market.
Gross margin contracted to 55.6% from 58.6% a year earlier, a 290‑basis‑point decline driven by higher markdowns and tariff costs. Despite the margin squeeze, the company’s strong international mix and disciplined cost management enabled the EPS beat. The Q3 EPS of $2.59 is still down from the $2.87 reported in Q3 2024, but the company outperformed expectations.
Management raised its fiscal 2025 GAAP earnings‑per‑share guidance to $12.92–$13.02, slightly above the $12.95 consensus, and lifted its revenue outlook to $10.96–$11.05 billion. The guidance increase signals confidence in the continued momentum of international markets and the effectiveness of the new product reset.
CEO Calvin McDonald will step down effective January 31, 2026, with CFO Meghan Frank and Chief Commercial Officer André Maestrini serving as interim co‑CEOs. In a statement, McDonald said, “In the third quarter, our teams remained focused on driving improvements within our U.S. business and maintaining momentum in our international regions.” CFO Frank added, “The gross profit rate in Q3 decreased 290 basis points and was driven primarily by the tariff impact and higher markdowns.”
The results underscore Lululemon’s ability to generate growth abroad while navigating U.S. headwinds and margin pressure. The raised guidance and CEO transition suggest management is positioning the company for a strategic reset, but the company will need to sustain international momentum and address the U.S. slowdown to maintain long‑term growth.
The content on BeyondSPX is for informational purposes only and should not be construed as financial or investment advice. We are not financial advisors. Consult with a qualified professional before making any investment decisions. Any actions you take based on information from this site are solely at your own risk.