What CEOs Are Saying: Retail in America
Interesting takeaways from earnings calls by Lululemon, Dollar General, and Five Below
Three companies that sell to everyday Americans at very different price points all reported earnings this week. Value-focused retail appears to be growing while aspirational high-end retail is struggling to stabilize. Shoppers overall are spending, but with increasing selectivity about where and why… and meanwhile, tariffs are adding cost pressure across the board.
The companies winning in the midst of a chaotic landscape tend to know know exactly who their customer is and have rebuilt their operations around that persona or persona group.
Let’s get into each call and three interesting takeaways for each.
Lululemon Athletica (LULU)
Q4 FY2025 Earnings Call
Results: a decent quarter on earnings, with EPS of $5.01 beating expectations of $4.78, but North America comparable sales down 2%, U.S. revenue down 1%, and full-year 2026 guidance calling for North America revenue to decline further
Lululemon is a premium athletic apparel brand with roughly 800 stores globally and $11 billion in annual revenue. The call was run by two interim co-CEOs: Meghan Frank, who also serves as CFO, and Andre Maestrini, the company’s Chief Commercial Officer. Former CEO Calvin McDonald departed in January, and the board’s search for a replacement is ongoing.
Markdowns became a crutch in North America
Over the past year, Lululemon says it leaned too heavily on markdowns to move inventory in North America, a significant risk for a brand whose identity is built on premium pricing. Markdowns increased 130 basis points in Q4 alone. Said Frank:
