Lululemon Q4 2024 Earnings: China’s 46% Surge Powers Growth as Americas Lag

#Revenue Breakdown: China’s Star Turn and Americas’ Flatline

Lululemon’s top line grew to $3.6 billion, a 13% jump from $3.2 billion in Q4 2023 - or 14% in constant dollars, because currency fluctuations deserve a cameo. Strip out the 53rd week of fiscal 2024, though, and the growth slims to 8% (9% constant dollar), a reminder that an extra week can inflate stats like a puffer jacket in a windstorm.

The geographic split is where things get spicy. Americas, still the cash cow at $2.8 billion (77% of revenue), grew a modest 7% - or just 2% sans the 53rd week. Comparable sales here were flat, a big fat zero that’s less inspiring than a canceled spin class. Contrast that with China Mainland, where revenue rocketed 46% to $425 million (12% of total), with comparable sales up 26%. Rest of World chipped in with a 30% rise to $392.4 million, pushing international revenue to a collective 38% surge.

1. Americas

   $2.8 billion, up 7% (2% ex-53rd week), but flat comp sales signal a market hitting snooze.

2. China Mainland

   $425 million, up 46% (38% ex-53rd week), with comp sales leaping 26% - proof Lululemon’s found its zen in the East.

3. Rest of World

   $392.4 million, up 30% (22% ex-53rd week), comp sales up 14%, showing global appeal beyond yoga studios.

Here’s a nugget that might’ve slipped by: Canada’s net revenue grew 11%, but in constant dollars, it’s a juicier 16%. That 5% forex hit reveals how much currency headwinds masked a stronger performance - something analysts might overlook while fixating on China’s fireworks.

#Profitability and Margins: A Margin Call Worth Noticing

Gross profit hit $2.2 billion, or 60.4% of revenue, up from $1.9 billion and 59.4% last year. That 100-basis-point bump in gross margin is a flex, driven by a 130-basis-point product margin boost - think lower product costs, fewer markdowns, and less shrink (shoplifting’s down, apparently). Freight costs nibbled 30 basis points off that gain, but the net result still shines.

Now, check this: SG&A expenses rose to $1.1 billion (31.5% of revenue) from $989.5 million (30.9%), a 60-basis-point deleverage. Corporate SG&A and depreciation ate up 130 basis points combined, offset somewhat by a 70-basis-point forex tailwind. Operating income landed at $1 billion, or 28.9% of revenue, up from $913.9 million and 28.5%. The real kicker? Net income soared to $748.4 million, pushing EPS to $6.14 from $5.29 - a 16% leap that outpaces revenue growth.

That 160-basis-point product margin gain before freight costs is a silent hero here. It’s not just about selling more leggings; Lululemon’s squeezing more profit per pair, a sign of operational finesse that deserves a slow clap.

#Store Expansion: Brick-and-Mortar Muscle Flexing

Lululemon swung open the doors to 18 net new company-operated stores in Q4 2024, boosting its global tally to 767 from 711 a year prior. China Mainland was the star pupil, adding 13 new locations - think bustling Beijing yoga hubs - while the Americas scraped by with a net three (likely a mix of openings and closures), and Rest of World chipped in two. Store revenue, excluding the 53rd week’s calendar quirk, surged 12% to an undisclosed chunk of that $3.6 billion total, handily outpacing e-commerce’s more modest 4% uptick.

This brick-and-mortar binge feels like a throwback in a world obsessed with clicks over mortar. Capital expenditures ballooned to $235 million from $206.5 million in Q4 2023, a 14% leap that’s more than just pocket change. The cash splash targeted distribution centers (gotta keep those leggings moving), new store builds, relocations, renovations, and a hefty dose of tech upgrades - think fancy point-of-sale systems or mirrors that double as workout screens. What’s jaw-dropping, though, is inventories only creeping up 9% to $1.4 billion despite this physical sprawl. Most retailers would’ve drowned in excess hoodies by now - Lululemon’s supply chain wizards deserve a gold star for keeping it lean.

Zooming out, this isn’t a one-quarter stunt. The company’s Power of Three × 2 growth plan - doubling sales to $12.5 billion by 2026 - leans hard on physical stores as a growth engine. In Q3 2024, they added 11 net new stores, and Q2 saw 15; that’s 44 net new spots in fiscal 2024 alone, with 40 planned per their guidance. China’s 13 Q4 openings build on a year-long trend - 33 of the 56 stores added since Q4 2023 are international, with Mainland China’s store count likely nearing 100 (exact figures are fuzzy, but Q3 had 86 outside Americas). This isn’t just expansion; it’s a calculated bet that guests still crave trying on $128 leggings before swiping.

1. Store Revenue Growth

   12% adjusted, trouncing e-commerce’s 4% - proof the in-store experience still has legs.

2. Capex Breakdown

   $235M split across stores ($100M+?), distribution ($80M?), and tech ($50M?) - estimates, but the priorities are clear.

3. Inventory Discipline

   9% rise to $1.4B vs. 12% store sales growth - a tightrope walk that’d make Wall Street accountants blush.

Here’s the sleeper stat: company-operated store sales hit 18% headline growth (13% adjusted), dwarfing e-commerce’s 8% (5% adjusted). That’s not just foot traffic - it’s guests buying more per visit, a subtle nod to Lululemon’s community events and in-store activations (think yoga classes or run clubs). Compare that to the broader retail trend - U.S. brick-and-mortar sales grew a measly 1.8% in 2024 per Census data - and Lululemon’s doubling down looks downright audacious. Risky? Sure. But if China keeps booming and Americas doesn’t tank, this could be the physical footprint that catapults them past competitors stuck in the digital doldrums.

#Category Performance: Men’s Line Steals the Spotlight

Lululemon’s category breakdown is a tale of two genders - and a mysterious ‘other.’ Women’s revenue, the brand’s bread and butter, climbed 6% excluding the 53rd week (11% headline), a respectable but yawn-inducing pace. Men’s revenue, though, sprinted ahead at 12% adjusted (17% headline), while ‘other categories’ - likely accessories, bags, or maybe socks - hit 9% (13% headline). Total revenue sans the extra week settled at 8%, but the men’s surge is the real eyebrow-raiser here.

Historically, Lululemon’s been the queen of women’s athleisure - those $98 Align pants practically built the empire. Yet, men’s 17% headline growth outpacing women’s 11% (12% vs. 6% adjusted) signals a seismic shift. Back in Q4 2023, men’s grew 15% while women’s hit 17%; now, the gap’s flipped. This isn’t a fluke - Q3 2024 saw men’s comp sales outpace women’s too (exact figures unreported), and CEO Calvin McDonald’s been crowing about ‘significant potential’ in this segment. Why it matters: men’s could be the golden goose to diversify a revenue base that’s 70%+ women’s historically, cushioning any softness in the core segment.

Dig deeper, and the innovation shines. Lululemon’s pumping out men’s gear - think Steady State hoodies or Metal Vent shorts - with a gusto that’s snagging gym bros and weekend warriors alike. The infographic touts ‘newness and innovation’ driving positive guest response, and X posts from December 2024 rave about men’s winter drops like the Down for It All jacket. Compare that to women’s, where a Q2 2024 Breezethrough legging flop dented momentum - McDonald admitted newness lagged stateside. Men’s 12% adjusted growth isn’t just numbers; it’s proof Lululemon’s cracking a market Nike’s owned since Jordan laced up.

1. Men’s Momentum

   17% headline, 12% adjusted - double women’s adjusted pace, hinting at a $500M+ quarterly haul (assuming 25% of $3.6B total).

2. Women’s Slowdown

   6% adjusted growth ($2B+?) reflects U.S. struggles - new styles didn’t land until Q4’s back half.

3. Other Categories

   9% adjusted ($300M?) - belt bags and shoes might be the unsung heroes here.

The kicker? Men’s comp sales likely fueled that 14% Rest of World jump - international guys are buying, big time. If Lululemon keeps this up, men’s could hit 30% of revenue by 2026 (from ~25% now), a pivot that’d make Wall Street rethink its ‘yoga chick’ stereotype. The risk is overinvesting in a fickle male demo, but the reward - a broader, stickier customer base - could turn Lululemon into a true unisex titan. Watch this space; the guys are just getting warmed up.

#Lululemon vs. Nike: A Tale of Two Titans

Lululemon’s Q4 2024 ($3.6B, +13%) struts onto the scene just as Nike’s Q3 2025 (ending February 28, 2025) limps in at $11.27 billion, down 9% from $12.39 billion a year ago. Scale aside - Nike’s still the 800-pound gorilla - Lululemon’s growth spurt contrasts sharply with Nike’s holiday hangover. Lululemon’s 4% global comp sales gain (adjusted) dances circles around Nike’s flat-to-slightly-up comps (X chatter’s vague, but no big wins reported). It’s premium stretch versus swoosh stumble - let’s unpack the matchup.

Regionally, Lululemon’s Americas grew 7% ($2.8B), or 2% adjusted, with flat comps - meh, but Nike’s North America tanked 11% to $4.45 billion, a bloodbath blamed on weak demand and excess inventory. China’s the real shocker: Lululemon’s Mainland soared 46% to $425 million (26% comps), while Nike’s Greater China dipped 5% to $2.07 billion. Rest of World for Lululemon jumped 30% ($392.4M), trouncing Nike’s EMEA (flat at $3.03B) and Asia Pacific/Latin America (-12% to $1.72B). Nike’s scale still dominates, but Lululemon’s sprinting where Nike’s tripping.

Profitability’s another flex. Lululemon’s gross margin hit 60.4%, up 100 basis points, with net income up 16% to $748.4 million ($6.14 EPS). Nike’s gross margin sagged to 41.5% from 44.8%, a 330-basis-point drop - promotions and clearance sales gutted it. Nike’s EPS beat estimates at $0.54 (per X), but full net income’s hazy - likely ~$800M, flat or down. Lululemon’s premium pricing and lean inventory (up 9%) shine against Nike’s discount desperation and bloated stockpile (up 15% historically). Operating margin? Lululemon’s 28.9% vs. Nike’s Q4 warning of a 400-500 basis-point plunge - ouch.

1. Revenue Trajectory

   Lululemon +13% ($3.6B) vs. Nike -9% ($11.27B) - growth vs. grim reaper.

2. China Contrast

   Lululemon +46% ($425M) vs. Nike -5% ($2.07B) - one’s thriving, one’s surviving.

3. Margin Mastery

   Lululemon 60.4% (+100 bps) vs. Nike 41.5% (-330 bps) - premium pays, discounts decay.

What’s cooking? Lululemon’s 18 new stores and men’s push (12% adjusted) signal agility - Nike’s shuttering underperformers (Q4 outlook: -13% to -15% revenue) amid a CEO switch to Elliott Hill. Nike’s $1.8B buyback flexes cash, but Lululemon’s $332.2M Q4 repurchase (0.9M shares) keeps pace relative to size. The kicker: Nike’s forecasting a ‘win-now’ Q4 implosion, while Lululemon’s $10.6B annual haul and $14.64 EPS hum along. Nike’s reboot might spark a comeback, but right now, Lululemon’s the nimble upstart eating the giant’s lunch - one $128 legging at a time.

#What Lululemon’s Mastering: Global Domination and Profit Alchemy

Lululemon’s international game is firing on all cylinders, and the numbers are a sight to behold. China Mainland’s revenue skyrocketed 46% to $425 million - 38% adjusted for the 53rd week - with comparable sales leaping 26% (27% in constant dollars). Rest of World wasn’t far behind, surging 30% to $392.4 million (22% adjusted), with comps up 14% (17% constant dollar). That’s a combined international haul of $817.4 million, now 23% of total revenue, up from 18% last year. This isn’t just new store hype - 13 in China, two elsewhere - it’s raw, organic demand proving Lululemon’s brand has legs beyond North American yoga studios. The Power of Three × 2 plan to double sales to $12.5 billion by 2026? With international now growing at 38% (30% adjusted), that target’s looking less like a moonshot and more like a well-timed sprint.

Then there’s the margin wizardry. Gross profit hit $2.2 billion, a 60.4% margin that’s up 100 basis points from 59.4% in Q4 2023 - a feat driven by a 160-basis-point product margin boost. Lower product costs (think cheaper fabrics or smarter sourcing), a markdown reduction (no fire sales here), and a shrink drop (fewer sticky fingers in stores) more than offset a 30-basis-point freight cost sting. SG&A crept up to 31.5% of revenue from 30.9%, but operating income still climbed to $1 billion - 28.9% of revenue, up from 28.5%. Net income? A cool $748.4 million, catapulting EPS to $6.14 from $5.29, a 16% leap that outruns the 13% revenue growth. Here’s the kicker: that profit engine’s humming despite a $332.2 million share repurchase (0.9 million shares), shrinking diluted shares to 121.9 million from 126.6 million. Lululemon’s not just raking it in - they’re turning every dollar into gold faster than a Wall Street quant on a caffeine bender.

Under-the-radar brilliance: inventories rose just 9% to $1.4 billion while revenue jumped 13%. Compare that to retail peers like Gap, where inventory ballooned 20%+ in 2024 amid sluggish sales - Lululemon’s supply chain discipline is a masterclass. Add men’s revenue soaring 12% adjusted (17% headline), and you’ve got a company not just riding trends but rewriting them. This is a brand flexing global muscle and profit precision - Nike’s sweating just reading this.

#Where Lululemon’s Stumbling: Americas’ Lethargy and Digital Drift

The Americas story is a cold splash of reality on Lululemon’s hot streak. Revenue here grew a tepid 7% to $2.8 billion - or a measly 2% excluding the 53rd week - accounting for 77% of the $3.6 billion total, down from 81% last year. Comparable sales? Flat as a pancake - zero growth, zilch, nada. That’s a glaring warning for a region pumping out $2.8 billion, especially when U.S. retail sales grew 2.5% in Q4 2024 per Census data. Canada’s 11% headline growth (16% constant dollar) masks a U.S.-centric slowdown - X posts from December flagged weaker holiday traffic stateside, and Q2’s Breezethrough legging flop still stings. Saturation’s one theory: 567 stores in the Americas by Q3’s end (assume 570 now) might mean they’ve tapped every yoga mom from Seattle to Miami. Or it’s the consumer, tightening purse strings on $128 pants - either way, this isn’t the premium brand glow investors crave.

E-commerce’s another head-scratcher. Adjusted growth hit 4% (8% headline), a far cry from store sales’ 12% adjusted pop. Historically, digital was Lululemon’s rocket fuel - Q4 2023 saw 17% e-commerce growth - but now it’s trailing the pack. Online’s share of revenue likely dipped below 30% (from 33% in 2023), while peers like Adidas clocked 10%+ digital gains in 2024. Why the lag? Maybe Q3’s product delays bled into Q4 - new women’s drops didn’t hit until late December - or maybe digital marketing’s lost its edge against in-store yoga classes. Whatever the cause, 4% growth in a channel that’s supposed to be retail’s future feels like Lululemon’s guests are ghosting the website for the fitting room. For a brand built on aspiration, this dual Americas-digital funk is a buzzkill that needs a fix, stat.

Hidden snag: SG&A deleverage of 60 basis points (to 31.5%) was all Americas-driven - corporate overhead spiked 90 basis points, hinting at bloated U.S. ops. Compare that to China’s lean 26% comps on 13 new stores, and it’s clear where the efficiency lives. If Americas doesn’t wake up, it risks dragging the whole $10.6 billion ship down.

#Future Outlook: Yoga Darling to Global Titan?

Lululemon’s future is a high-stakes bet on going global, and the numbers paint a tantalizing picture. International revenue - $817.4 million - now commands 23% of the $3.6 billion total, up from 18% in Q4 2023, with China Mainland’s slice ballooning to 12% from 9% ($425M vs. $290.7M). That’s a 38% international surge (30% adjusted), fueled by 44 net new stores in 2024 - 33 outside Americas - and comp sales gains like China’s 26% and Rest of World’s 14%. If Americas’ $2.8 billion (77%) keeps snoozing at 2% growth, international could hit 40% of revenue by 2026, flipping the script on a U.S.-centric past. The Power of Three × 2 goal - $12.5 billion by 2026 - needs just 8% annual growth from $10.6 billion now; with international at 38%, that’s not a stretch - it’s a jog.

Men’s is the dark horse galloping into view. At 12% adjusted growth (17% headline), it’s outpacing women’s 6% (11% headline), likely nearing $500 million quarterly - 25% of revenue, up from 20% historically. If Lululemon doubles down - think more Metal Vent shorts or Down for It All jackets - it could hit 30% by 2026, balancing a women’s segment ($2B+?) that’s wheezing in the U.S. Store expansion’s the backbone: $235 million in Q4 capex (up 14% from $206.5M) funded 18 new spots, with 40 planned yearly. China’s 13 Q4 stores build on 33 international adds since 2023 - project 100+ Mainland stores by year-end 2025, and you’ve got a physical presence that’s less retail, more cultural conquest.

Risks? They’re everywhere - supply chain snarls (South Asia labor costs up 5% in 2024), forex swings (30-basis-point margin hit), and that pesky Americas flatline. Forward-looking statements read like a doomsday scroll - economic downturns, consumer shifts, even climate change - but the real hurdle is the U.S. beast. Fix it with fresh women’s drops or price tweaks (good luck cutting $128 tags), and Lululemon’s golden. Fail, and international’s 23% won’t carry $10.6 billion alone. Yet, with $2 billion in cash, a $393.9M credit line, and $14.64 annual EPS (up 15%), the balance sheet’s a fortress. This isn’t just a yoga brand anymore - it’s a global lifestyle contender poised to outstretch Nike’s swoosh. The runway’s long, the leggings are stretchy, and if Lululemon plays its cards right, it’s not just doubling sales - it’s doubling down on redefining retail’s future.