Lululemon has posted another quarter of higher sales, but an analyst has warned of a slowdown in the company’s growth, especially in North America.

For the quarter ended July 28, the company’s net revenue rose 7 per cent to $2.4 billion, with Americas sales up only 1 per cent while international revenue surged 29 per cent.

Overall comparable sales increased 2 per cent, including a 3 per cent decrease of the Americas and a 19 per cent uplift of international markets.

According to GlobalData MD Neil Saunders, the company has had a good run of growth and has performed exceptionally in terms of adding sales and market share. However, the continued slowdown in the North American market raises the question of whether Lululemon has finally reached its ceiling.

Saunders cited the softer sports and athleisure category as a result of the more cautious consumer, as well as increasing competition from both “established players” and “newer upstarts”.

The company has tried to expand into new sporting categories, like golf, but was not able to gain much traction, the analyst continued. The core assortment which, while still impressive in terms of quality, is not good enough to drive growth among a more reluctant consumer and in a market where choice has been expanded, he added.

Overseas, the retailer has achieved certain success but still needs to make some serious gains, Saunders stated. “The company has not penetrated markets like the UK, China or most of Europe in anywhere near the same way it has done in the US,” he said.

Despite the more sluggish top line, Lululemon still reported a solid 15 per cent increase in net income.

The company expects net revenue to grow 8-9 per cent for the full year, or 6-7 per cent, excluding the extra 53rd week. 

“Overall, Lululemon remains a very good retailer and brand with an impressive track record. However, the miracle it has worked for so long seems to be fading,” Saunders concluded.