Executive Summary
Lululemon reported QQ2 2024 revenue of $2.371B, down 26.0% year over year, reflecting a softer demand environment versus the prior-year period. Despite the top-line decline, the company delivered solid margin discipline and meaningful cash generation. Gross profit reached $1.412B with a gross margin of 59.56%, supported by a favorable product mix and ongoing direct-to-consumer strength, while operating income was $540.2M (operating margin 22.78%) and net income was $392.9M (net margin 16.57%), resulting in diluted EPS of $3.15. Sequential improvements were evident versus QQ1 2024, with QoQ revenue rising 7.34%, gross profit up 10.75%, operating income up 24.87%, and net income up 22.25%, signaling better seasonal momentum and mix.
The company generated robust operating cash flow of $443.1M and free cash flow of $298.1M in the quarter, underscoring a healthy cash generation engine despite the revenue pullback. Cash and cash equivalents stood at $1.61B, while total debt was $1.46B, leaving net debt of approximately $(151)M—effectively a net cash position when considering cash on hand against gross liabilities. The balance sheet exhibits strong liquidity and a solid asset base, with a current ratio of 2.43 and a quick ratio of 1.46. In addition, management’s decision to repurchase shares contributed to a sizable financing outflow of about $587.9M, offset by ongoing free cash flow vigor. These dynamics provide the company with flexibility to navigate near-term demand headwinds while continuing to invest in brand and DTC initiatives.
Key Performance Indicators
QoQ: 10.75% | YoY:-25.81%
QoQ: 24.87% | YoY:-42.61%
QoQ: 22.25% | YoY:-41.31%
QoQ: 23.53% | YoY:-40.57%
Key Insights
Revenue: $2.371B (QQ2 2024) | YoY: -26.0% | QoQ: +7.34%\nGross Profit: $1.412B | Gross Margin: 59.56% | YoY: -25.81% | QoQ: +10.75%\nOperating Income: $540.2M | Margin: 22.78% | YoY: -42.61% | QoQ: +24.87%\nNet Income: $392.9M | Net Margin: 16.57% | YoY: -41.31% | QoQ: +22.25%\nEPS (Diluted): $3.15 | YoY: -40.57% | QoQ: +23.53%\nOperating Cash Flow: $443.1M | Free Cash Flow: $298.1M\nCash & Equivalents: $1.61B | Total Debt: $1.46B | Net Debt: $(151.2)M\nInventory: $1.429B | DSO: 4.79 days | ...
Financial Highlights
Revenue: $2.371B (QQ2 2024) | YoY: -26.0% | QoQ: +7.34%\nGross Profit: $1.412B | Gross Margin: 59.56% | YoY: -25.81% | QoQ: +10.75%\nOperating Income: $540.2M | Margin: 22.78% | YoY: -42.61% | QoQ: +24.87%\nNet Income: $392.9M | Net Margin: 16.57% | YoY: -41.31% | QoQ: +22.25%\nEPS (Diluted): $3.15 | YoY: -40.57% | QoQ: +23.53%\nOperating Cash Flow: $443.1M | Free Cash Flow: $298.1M\nCash & Equivalents: $1.61B | Total Debt: $1.46B | Net Debt: $(151.2)M\nInventory: $1.429B | DSO: 4.79 days | DOH: 134.13 days | DPO: 29.79 days\nCurrent Assets: $3.571B | Total Assets: $6.744B | Total Liabilities: $2.712B | Shareholders’ Equity: $4.032B
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
2.37B |
-26.02% |
7.34% |
| Gross Profit |
1.41B |
-25.81% |
10.75% |
| Operating Income |
540.23M |
-42.61% |
24.87% |
| Net Income |
392.92M |
-41.31% |
22.25% |
| EPS |
3.15 |
-40.57% |
23.53% |
Key Financial Ratios
operatingProfitMargin
22.8%
operatingCashFlowPerShare
$3.55
freeCashFlowPerShare
$2.39
Management Commentary
No earnings call transcript was provided in the data. As a result, transcript highlights and management quotes could not be extracted from the QQ2 2024 materials.
Not available in the provided data.
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Not available in the provided data.
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Forward Guidance
No formal forward guidance was included in the provided data for QQ2 2024. Given the sequential improvement in QQ2 metrics and the company’s strong liquidity position, potential guidance would likely focus on sustaining DTC momentum, inventory normalization, and international expansion, particularly in regions outside North America. Key uncertainties include macro consumer spend, promotional environments, and currency headwinds in international markets. Investors should monitor: (1) trajectory of direct-to-consumer sales growth, (2) inventory levels and promo activity, (3) progression of international expansion, especially in China, and (4) continued cash flow generation and capital allocation strategy (buybacks vs. reinvestment).