Lululemon Reports Increased Q3 Revenue After Clothing Lineup Revamp

Lululemon Athletica’s third-quarter revenue reached $2.4 billion, up from the $2.2 billion reported last year. Earnings per share (EPS) came in at $2.87 versus $2.53 in Q3 2023.

For the fourth quarter, the Canadian apparel company is projecting revenue between $3.48 billion and $3.51 billion, and it estimates that EPS will come in around $5.56 to $5.64.

Lululemon expects full-year net revenue to hit as high as $10.49 billion, which is a slight adjustment from a previous prediction of $10.48 billion. EPS should range from $14.08 to $14.16.

“Looking to the future, we are pleased with the start to our holiday season, and we remain focused on accelerating our U.S. business and growing our brand awareness around the world,” said Lululemon CEO Calvin McDonald in the earnings release.

Same-store sales, which measures purchases made at locations open at least a year, increased by 4% internationally. However, the North American market dragged same-store sales down by 2% after falling 3% in the second quarter. With locations in the Americas not performing as well, Lululemon may be shifting focus to international markets.

Lululemon Apparel Revamp

The improved numbers in the third quarter could be attributed to changes to its product lineup. Earlier this year, Lululemon executives noted slowing sales as the brand’s apparel appeared stale and outdated to customers.

To give the brand a boost of newness, the company responded with a refresh of its lineup, including some changes to the detailing on its Define jackets and the launch of its velvet Scuba hoodies. A line of Disney-branded wear was also introduced.

“I feel good about the quality and quantity of newness the teams have planned, and I believe we are well positioned for spring,” McDonald said Thursday on a call with analysts.

In the summer, Lululemon’s Breezethrough apparel was put on hold. The company received numerous complaints that the clothing was unappealing, with customers especially dissatisfied with the shape of the front waistband and the Y-shaped seam.  

Lululemon’s executive team remains committed to listening to current customers alongside attracting new ones. By responding quickly to market changes and tastes, the company may see an improvement in its conversion rate, which measures the percentage of consumers who walk into a store and actually make a purchase.