Lululemon Athletica (LULU) Q4 2026 earnings summary

Executive summary

• Q4 net revenue rose 1% to $3.6B, with diluted EPS of $5.01, both ahead of expectations; full year revenue increased 5% to $11.1B, with diluted EPS of $13.26, down 9% year-over-year.

• Excluding the 53rd week, Q4 revenue grew 6% and full year revenue grew 7%; comparable sales increased 2% in both periods.

• International business delivered double-digit revenue growth, especially in China Mainland, while North America/Americas revenue was flat or declined.

• Management is focused on restoring full price sales in North America, driving innovation, and maintaining international momentum; new product launches and guest activations are showing positive early results.

• Board welcomed Chip Bergh as director; CEO search is ongoing.

Financial highlights

• Q4 gross profit was $2B (54.9% of revenue), down from 60.4% last year; gross margin declined 550 bps due to tariffs and higher markdowns.

• SG&A expenses were $1.2B (32.5% of revenue), up 100 bps year-over-year, mainly due to FX, fixed cost deleverage, and brand investments.

• Q4 operating income was $812M (22.3% of revenue), down from 28.9% last year; full year operating income decreased 12% to $2.2B.

• Net income was $587M, or $5.01 per diluted share, versus $6.14 last year; full year diluted EPS was $13.26, down from $14.64.

• Inventory at Q4 end was $1.7B, up 18% in dollars and 6% in units; capital expenditures were $183M.

Outlook and guidance

• FY2026 revenue expected at $11.35B–$11.5B (2%–4% growth); North America down 1%–3%, China Mainland up ~20%, rest of world up mid-teens.

• Gross margin to decrease ~120 bps; operating margin to decrease ~250 bps; EPS guidance $12.10–$12.30 (vs. $13.26 in 2025).

• Inventory growth expected mid to high single digits in dollars, units flat to slightly down.

• Capex for 2026 projected at $725M–$745M (6% of revenue).

• Q1 2026 revenue guidance: $2.4B–$2.43B (1%–3% growth); North America to decline mid-single digits, China up 25%–30%.