LULU 3Q25 First Take: overall a beat against a low bar. Overall, the quarter came in better than muted expectations.

After two straight guide-downs, Q3 results topped the high end of guidance with revenue of RMB 2.57bn (+7.1% YoY; guide 3%-4%). Execution was stronger than the company had telegraphed.

On that basis, the company raised full-year revenue guidance. It moved from 2%-4% to 4%-6%.

1) Revenue: by category, core womenswear delivered RMB 1.65bn, up 5.7% YoY, slightly ahead of market expectations. However, growth continued to decelerate QoQ.

Dolphin Research believes that after organizational changes early this year, tighter design–merch coordination restored the product launch cadence to its historical norm. Newness contributed above expectations.

Menswear posted RMB 600mn, up 8.1% YoY. The trend ticked up slightly vs. the prior two quarters.

By region, North America, the home market, remained soft, down 1.5% YoY. AOV, conversion, and store traffic all continued to decline.

China was the standout at +43% YoY, the fastest pace in a year. Dolphin Research attributes the strength mainly to livestreaming on e-comm platforms.

2) GPM: tariffs and the removal of the de minimis exemption (effective Aug) drove a notable increase in supply chain costs. GPM fell 290bps YoY to 55.6%.

On opex, international expansion led to more hiring and higher compensation in overseas ops, nudging the opex ratio up 50bps. Core OPM was 17.1%, down 340bps. $Lululemon(LULU.US)