Shares of Lululemon (LULU) fell in after-hours trading after the clothing retailer reported its Q4 earnings results. Adjusted earnings per share came in at $5.01, which beat analysts’ consensus estimate of $4.78 per share. In addition, sales increased by 1% year-over-year (6% when excluding the 53rd week in 2024), with revenue hitting $3.64 billion compared to the $3.57 billion that analysts were looking for.
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Interestingly, revenue was driven by strong International revenue growth of 17% compared to the year-ago quarter, whereas revenue from the Americas fell by 4%. Comparable sales told a similar story. Overall, they grew by 3%, while the Americas segment fell by 1% and the international segment grew by 20%. Nevertheless, Lululemon continued its long-term trend of opening new stores, as shown below, and now has 811 stores.
2026 Outlook
Looking ahead to the first quarter of 2026, the company expects net revenue to be between $2.4 billion and $2.43 billion, compared with analyst estimates of $2.48 billion. This outlook implies revenue growth of roughly 1% to 3% for the quarter. Meanwhile, diluted earnings per share are projected to fall in the range of $1.63 to $1.68, which is below the current consensus estimate of $2.07.
For the full year, the company expects 2026 net revenue to reach between $11.35 billion and $11.50 billion. That compares with analyst expectations of about $11.52 billion and represents annual growth of roughly 2% to 4%. Moreover, diluted earnings per share for the year are expected to range from $12.10 to $12.30, below the consensus estimate of $12.54.
Is LULU Stock a Buy?
Turning to Wall Street, analysts have a Hold consensus rating on LULU stock based on one Buy, 17 Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average LULU price target of $202.87 per share implies 27.4% upside potential. However, it’s worth noting that estimates will likely change following today’s earnings report.
