Lululemon (露露乐蒙) sees its China business emerge as its fastest-growing major market, even as the sportswear brand grapples with falling global profits and a slowdown in its core North American business.
After the close of trading on December 11, Vancouver-based lululemon Athletica reported mixed results for its third quarter of fiscal 2025, ended November 2. Global net revenue rose 7% year-on-year to US$2.6 billion, but operating profit fell 11% to US$436 million, while net profit declined 12.8% to US$307 million – underscoring mounting margin pressure.
Against that backdrop, mainland China stood out. Net revenue from the market surged 46% year-on-year, making it lululemon’s strongest growth engine by a wide margin. Comparable sales in mainland China increased 24%, and the company opened six new stores during the quarter, extending its footprint beyond top-tier cities.
International revenue overall grew 33% year-on-year, but China accounted for a disproportionate share of that momentum. In contrast, lululemon’s U.S. business – still its largest by revenue – has slowed, prompting management to focus on an action plan to stabilise growth and improve execution. The divergence is now central to the brand’s global story.
On the earnings call, CEO Calvin McDonald singled out China for praise, saying the company was ‘very satisfied’ with performance and expects full-year net revenue growth in the market to reach or exceed the high end of its previously guided 20-25% range. He also highlighted strong demand for outerwear, particularly the Wunder Puff and Featherweight Down collections – categories that play a more prominent role in China than in lululemon’s original yoga-led U.S. identity.
With store density still low relative to market size and demand spreading into second- and third-tier cities, China is no longer a peripheral growth bet for lululemon. As profits come under pressure elsewhere, the mainland has become the brand’s most important growth market and a key pillar of its long-term expansion narrative.
