lululemon athletica inc. reported a net revenue of $11.1 billion for the fiscal year ending February 1, 2026, marking a 5% increase from $10.6 billion in the previous year. The growth was primarily driven by a 29% increase in revenue from the China Mainland segment and a 16% increase from the Rest of World segment, which includes the Asia Pacific and Europe and the Middle East regions. However, revenue from the Americas, which constitutes 71% of total revenue, decreased by 1% to $7.8 billion. The company's diluted earnings per share fell by 9% to $13.26, down from $14.64 in 2024, largely due to increased operating costs and tariffs.
The company experienced significant operational changes during the fiscal year, including the acquisition of lululemon-branded retail locations and operations in Mexico, previously managed by a third-party licensee. This acquisition, completed on September 10, 2024, is expected to enhance lululemon's market presence in the region. Additionally, lululemon expanded its retail footprint by opening 44 net new company-operated stores, resulting in an 11% increase in total square footage. The total number of company-operated stores reached 811 as of February 1, 2026.
In terms of customer engagement, lululemon's e-commerce sales increased by 8%, contributing to the overall revenue growth. The company reported a 2% increase in comparable sales, with notable growth in the China Mainland and Rest of World segments, which saw increases of 20% and 9%, respectively. However, comparable sales in the Americas decreased by 3%, attributed to lower store traffic and conversion rates. The company also reported a decrease in sales per square foot, reflecting the challenges faced in the North American market.
The filing highlighted the impact of increased tariffs and the removal of the de minimis exemption on the company's gross margin, which decreased by 260 basis points to 56.6%. The company anticipates that these tariff-related costs will continue to adversely affect its gross margin and income from operations in 2026. In response, lululemon is implementing a strategic action plan focused on product creation, activation, and enterprise efficiency to drive improvement in the Americas while maintaining growth in international markets.
Looking ahead, lululemon remains cautious about the macroeconomic environment, including inflationary pressures and shifting consumer sentiment, which could impact demand for its products. The company plans to continue investing in its digital and omni-channel capabilities while optimizing its store locations to enhance customer experience and drive sales. The outlook for fiscal 2026 includes expectations for continued revenue growth, albeit tempered by the ongoing challenges in the Americas and the broader economic landscape.
About lululemon athletica inc.
Lululemon Athletica designs, distributes, and retails technical athletic apparel, footwear, and accessories globally. Its core business includes innovative, high-quality products for yoga, running, and training, sold through company-operated stores, e-commerce, and third-party partners. The company emphasizes brand building, product innovation, omni-channel retailing, and community engagement to differentiate itself in the competitive activewear market.
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