Lululemon Athletica Inc Q2 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Alex Straton - Morgan Stanley - Analyst : Perfect, thanks so much. Perfect. Maybe a follow-up just on that lifestyle point of being 40% or so of the assortment. Is that the right mix, do you think, over time? And are there any differences by geography? And then just separately, just on the performance versus casual kind of deviation. It just feels like the performance franchises are longer dated versus like your later entry into cattle. So I'm just a little bit surprised by the fatigue there. So any color or thoughts on what's different would be helpful. Thanks so much.

Question: Alex Straton - Morgan Stanley - Analyst : Thanks so much.

Question: Brooke Roach - Goldman Sachs Group Inc - Analyst : Good afternoon, and thank you for taking our question. Calvin, I was hoping that you could contextualize the magnitude of these key franchises that are down trending within the 40% of your business that is casual. How are you thinking about the time line that it might take for new innovation to scale in your Spring '26 innovation pipeline to a large enough magnitude in which that newness will fully offset the incremental pressure that you're seeing from the select lounge and social platforms? Thank you.

Question: Brooke Roach - Goldman Sachs Group Inc - Analyst : Great, thanks so much. I'll pass it on.

Question: Jay Sole - UBS Equities - Analyst : Great, thank you so much. Calvin, you talked a lot about supply chain initiatives in your prepared remarks, specifically around speed and getting faster. Can you talk specifically about how much faster lead times need to get where they are today, where you really want to take them ultimately? And how are you going to manage that process of getting a company that's worked one way for a really long time around creating product, both in line and innovation into doing something really sounds pretty different? Thank you.

Question: Jay Sole - UBS Equities - Analyst : Got it. And then if I could just ask a little bit about marketing because you mentioned, I think, in the pared remarks that if you get the product right, everything else kind of takes care of itself. But are there -- is there anything you pile you can do with on the marketing side? Would you be willing to increase marketing as a percent of sales to maybe create some more traffic in the store and more excitement around the brand?

Question: Jay Sole - UBS Equities - Analyst : Got it. Thank you so much.

Question: Paul Lejuez - Citi - Analyst : Hey, thanks guys. Can you maybe talk about the gross pressure from the reciprocal tariffs as well as the de minimis on an annualized basis? And maybe can you just share how much are you relying on pricing as a mitigation tool. And maybe just help me maybe connect the dots between

Question: Paul Lejuez - Citi - Analyst : Got it. And then was the pricing changes be isolated to the US? Or do you think you have some pricing power globally that can help the mitigation tool?

Question: Paul Lejuez - Citi - Analyst : Yeah, thank you. Good luck.

Question: Adrienne Yih - Barclays Services Corp - Analyst : Good afternoon, Calvin, I guess my question is on the on the inventory kind of that's in the pipeline, what can you be doing sort of between now and 2026 when the fix has come into play? How can you kind of chase into things that are suggesting that they're working and make any kind of like course corrections kind of before we get to that point? And then my other question is on the de minimis, and I'm not sure if we have enough information to back into it, but the e-commerce is roughly, call it, mid- to high 40% depending on the quarter. what portion of that comes into the US. So how should we think about what was being used on the de minimis exemption? Thank you very much.

Question: Adrienne Yih - Barclays Services Corp - Analyst : Great, thank you very much. I'll pass along.

Question: Matthew Boss - JPMorgan Chase & Co - Analyst : Great, thanks. So Calvin, on your revised outlook in both the US and China for the year, could you elaborate on what you saw or how you saw traffic trends progress over the course of the second quarter? And any change so far in the third quarter that informed the more cautious outlook for the year?

Question: Matthew Boss - JPMorgan Chase & Co - Analyst : Great. And then, Calvin, could you maybe just elaborate on some of your comments before on changes in the industry that I think you said is challenging your core assortment. And then regionally, I mean, what do you think is different here in the US relative to what you're seeing from the brand overseas?

Question: Matthew Boss - JPMorgan Chase & Co - Analyst : Great, best of luck.