Balanced Near-Term Outlook and Long-Term Initiatives Support Hold Rating on Lululemon

Paul Lejuez, an analyst from Citi, maintained the Hold rating on Lululemon Athletica. The associated price target remains the same with $210.00.

Paul Lejuez has given his Hold rating due to a combination of factors related to Lululemon’s near-term performance and longer-term positioning. Management’s recent update for the fourth quarter implies results largely consistent with prior expectations, with sales and earnings guided to the high end of earlier ranges but not meaningfully above consensus. While China is providing some upside, U.S. and rest-of-world trends appear more muted, and the company is using somewhat higher markdowns to support demand, even though inventory exiting the holiday season is described as clean and unit growth is aligned with plans.
At the same time, Lejuez recognizes management’s efforts to improve fundamentals over the next couple of years, including tighter inventory discipline, a planned reduction in markdown pressure, and a greater emphasis on product innovation and lifestyle categories. Initiatives such as increasing the mix of new styles, innovating fabrics (including in key franchises like ABC pants and Lounge/Scuba/Define), and refining marketing and operational lead times could eventually support better sales and margin momentum. However, with more margin headwinds than tailwinds anticipated for 2026 and U.S. sales needing a clear turnaround, the risk/reward appears balanced, supporting a neutral, Hold stance rather than a more aggressive rating.

Lejuez covers the Consumer Cyclical sector, focusing on stocks such as TJX Companies, Urban Outfitters, and Under Armour. According to TipRanks, Lejuez has an average return of 11.3% and a 60.78% success rate on recommended stocks.

In another report released today, Barclays also maintained a Hold rating on the stock with a $203.00 price target.