Lululemon Adjusts 2024 Guidance Following Q2 Results
Krissy Vann | Host, All Things Fitness and Wellness
Lululemon Athletica Inc. released its financial results for the second quarter of fiscal 2024, ending on July 28, 2024, showing a 7% increase in net revenue to $2.4 billion. Despite this growth, the company missed Wall Street’s sales expectations for the first time in two years, leading to a revised full-year revenue forecast. The shortfall has been linked to the launch and subsequent withdrawal of the "Breezethrough" leggings, which were removed from stores in July after customers expressed dissatisfaction with the product's design and comfort.
The Breezethrough leggings, which retailed for $98, faced criticism for their V-shaped back seam, which some customers found unflattering, and for a waistband that some reported as uncomfortable. The negative feedback prompted Lululemon to pull the product from shelves, impacting its sales performance in the U.S. market. However, the company’s international sales remained strong, with revenue growing by 29%, helping to mitigate the domestic challenges.
In light of these developments, Lululemon has adjusted its full-year revenue guidance to a range of $10.38 billion to $10.48 billion, down from the previous estimate of $10.7 billion to $10.8 billion. Despite the challenges, CEO Calvin McDonald remains optimistic about the company’s long-term prospects, emphasizing Lululemon’s focus on refining its product offerings and fast-tracking popular styles to market. The company also reported a 9% increase in gross profit to $1.4 billion and an improvement in gross margin, which rose by 80 basis points to 59.6%.
Looking ahead, Lululemon plans to continue investing in its product assortment and international growth while addressing the issues that have impacted its U.S. market performance. As the company navigates the remainder of 2024, it will focus on aligning its offerings with customer expectations and ensuring that new product launches are well-received, aiming to strengthen its market position and achieve its revised financial goals.
Elevate Your Expertise: Tune in to Our YouTube Channel for Exclusive Podcasts with fitness and wellness Industry Titans and Game-Changers
