Lululemon Q1 revenue beats estimates, cuts outlook

Lululemon Athletica reported first-quarter revenue that exceeded analyst expectations but significantly lowered its annual forecast, citing weak North American sales, negative media commentary, and disappointing product launches. The athletic apparel retailer's stock fell sharply in after-hours trading following the announcement.

For the quarter ended May 3, net revenue rose 4% year-over-year to $2.47 billion, surpassing the consensus estimate of $2.43 billion. However, net income fell to $195 million from $314.5 million in the prior-year period. Diluted earnings per share were $1.69, down from $2.60 but slightly above forecasts.

The company's performance was split by region. Revenue in the Americas declined 3%, with comparable sales falling 5%. In contrast, international revenue surged 22%, driven by a 30% increase in Mainland China. Despite the international growth, management expressed concern over recent trends in its core North American market.

Interim co-CEO and CFO Meghan Frank told analysts the company faced headwinds exiting the quarter. She cited "spikes of negative commentary in the media and on social channels with regard to our brand," which impacted traffic and...