lululemon athletica inc. stock research
FY2025 Q3
lululemon athletica (LULU) Gross Margin — Quarter Ended Nov 2, 2025
Revenue increased compared to both the prior quarter and the same quarter last year, while gross profit was stable relative to the prior quarter and unchanged from a year ago. Cost of revenue rose more than proportionally, causing gross margin to weaken versus both comparison periods.
Gross margin takeaway
Quarter ended Nov 2, 2025 · FY2025 Q3
Revenue increased compared to both the prior quarter and the same quarter last year, while gross profit was stable relative to the prior quarter and unchanged from a year ago. Cost of revenue rose more than proportionally, causing gross margin to weaken versus both comparison periods.
- The strongest observable driver is the relationship between revenue and cost of revenue: revenue grew but cost of revenue grew faster, compressing gross margin. This pattern is consistent across both the sequential and year-over-year comparisons.
- Compared to the immediately preceding quarter, gross margin weakened as revenue increased but gross profit was lower. Compared to the same quarter one year earlier, gross margin also weakened, with revenue higher but gross profit unchanged.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
55.6%
Gross profit
$1.4B
Revenue
$2.6B
Cost of revenue
$1.1B
Quarter-over-quarter change
-2.9 pts
Year-over-year change
-2.9 pts
Quarterly gross margin trend
A four-quarter view of the revenue and direct-cost bridge behind gross margin.
| Period | Revenue | Gross profit | Cost of revenue | Gross margin |
|---|---|---|---|---|
| Feb 2, 2025 | $3.6B | $2.2B | $1.4B | 60.4% |
| May 4, 2025 | $2.4B | $1.4B | $987.5M | 58.3% |
| Aug 3, 2025 | $2.5B | $1.5B | $1.0B | 58.5% |
| Nov 2, 2025 | $2.6B | $1.4B | $1.1B | 55.6% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Aug 3, 2025
-2.9 pts
Year-over-year change
Oct 27, 2024
-2.9 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable driver is the relationship between revenue and cost of revenue: revenue grew but cost of revenue grew faster, compressing gross margin. This pattern is consistent across both the sequential and year-over-year comparisons.
Compared to the immediately preceding quarter, gross margin weakened as revenue increased but gross profit was lower. Compared to the same quarter one year earlier, gross margin also weakened, with revenue higher but gross profit unchanged.
Monitor the trajectory of cost of revenue relative to revenue, as its faster growth is the primary factor behind the margin compression.