Lululemon Athletica (LULU) AI Stock Analysis

• Market Cap: $19.50B
• Dividend Yield: N/A
• Average Volume (3M): 2.17M
• Price to Earnings (P/E): 13.5
• Beta (1Y): 0.98
• Revenue Growth: 8.76%
• EPS Growth: 3.41%
• Country: US
• Employees: 39,000
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Apparel - Retail
• EPS (TTM): 5.01
• Shares Outstanding: 112,190,040
• 10 Day Avg. Volume: 2,566,136
• 30 Day Avg. Volume: 2,174,982
• PEG Ratio: -1.41
• Price to Book (P/B): 4.25
• Price to Sales (P/S): 1.92
• P/FCF Ratio: 23.12
• Enterprise Value/Market Cap: 0.95
• Enterprise Value/Revenue: 1.67
• Enterprise Value/Gross Profit: 2.87
• Enterprise Value/Ebitda: 6.28
• 1Y Price Target: $186.31
• Price Target Upside: 16.98% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 20
• EPS Forecast (FY): 12.51
• Revenue Forecast (FY): $11.50B

• Rating: 63 Neutral
• Price Target: $170.00 ▲(6.74% Upside)
• Action: Reiterated Date: 03/18/26
• Date: Action: Reiterated 03/18/26

The score is primarily weighed down by a weak technical setup (broad downtrend and negative momentum) and earnings-call guidance for a margin/EPS reset in 2026. Financial performance remains a key support given strong multi-year growth and solid balance-sheet/return profile, while the relatively low P/E provides additional valuation cushion.

Positive Factors

Scale & Margin Profile

Multi-year revenue scaling combined with structurally high gross margins (~55–59%) demonstrates durable brand economics and pricing power. That scale supports operating leverage, product investment and resilience through cyclical retail pressures, underpinning long-term profitability.

International & Store Growth

Rapid China and broader international growth materially expand Lululemon’s addressable market. Combined with plans for ~40–45 net new stores and strong store ROI, this geographic diversification reduces reliance on North America and supports multi‑year revenue cadence and square‑footage driven returns.

Balance Sheet & Capital Allocation

Manageable leverage, expanding equity and historically strong ROE provide financial flexibility to invest, weather tariff and margin cycles, and continue shareholder returns. Material cash, revolver capacity and sustained buybacks signal disciplined capital allocation and a buffer for reinvestment.

Negative Factors

Gross Margin Pressure

A large, multi-hundred basis point hit from tariffs and elevated markdowns materially compresses product margin. Even with mitigation plans, persistent tariff exposure and discounting risk meaningfully lower durable profitability and reduce margin headroom across the next several quarters.

Guidance & Margin/Earnings Reset

Company guidance points to a structural earnings reset: modest top-line growth and multi-quarter margin deleverage from tariffs, markdowns and SG&A timing. This implies lower cash conversion and constrained free cash flow relative to prior years while remediation initiatives take hold.

Governance & Leadership Uncertainty

Founder-led nominations and an active CEO search create boardroom and execution uncertainty. Governance disputes can delay strategic decisions (product, merchandising, hiring) and distract management, which risks slowing recovery of brand momentum and long-term product innovation.

Lululemon Athletica Business Overview & Revenue Model

Company Description

lululemon athletica inc., together with its subsidiaries, designs, distributes, and retails athletic apparel and accessories for women and men. It operates in two segments, Company-Operated Stores and Direct to Consumer. The company offers pants, shorts, tops, and jackets for healthy lifestyle and athletic activities, such as yoga, running, and training, as well as other sweaty pursuits. It also provides fitness-related accessories and footwear. The company sells its products through a chain of company-operated stores; outlets and warehouse sales; interactive workout platform; a network of wholesale accounts, such as yoga studios, health clubs, and fitness centers; temporary locations; and license and supply arrangements, as well as directly to consumer through mobile apps and lululemon.com e-commerce website. As of January 30, 2022, it operated 574 company-operated stores under the lululemon brand in the United States, Canada, the People's Republic of China, Australia, the United Kingdom, Japan, New Zealand, Germany, South Korea, Singapore, France, Malaysia, Sweden, Ireland, the Netherlands, Norway, and Switzerland. lululemon athletica inc. was founded in 1998 and is based in Vancouver, Canada.

How the Company Makes Money

Lululemon makes money primarily by selling branded athletic and lifestyle products at premium price points through two main channels: (1) company-operated retail stores and (2) direct-to-consumer e-commerce and mobile app sales. Revenue is generated from the sale of core apparel categories (e.g., leggings, tops, outerwear, shorts, sports bras), with additional contributions from accessories (e.g., bags, yoga-related items) and select footwear lines. The company’s model is vertically controlled on the brand and product side—Lululemon designs and markets products under its own brand while typically using third-party manufacturers for production—allowing it to capture retail margins and manage product assortment and pricing. Key revenue streams and drivers include: (a) direct product sales via physical stores, where Lululemon benefits from merchandising, store experience, and full-price selling; (b) direct product sales via digital commerce, which expands reach beyond store footprints and supports repeat purchasing; and (c) international expansion, which increases addressable market through additional stores and localized e-commerce. Earnings are influenced by product mix (apparel versus accessories/footwear), pricing and markdown levels, inventory management, store productivity, and shipping/fulfillment costs for e-commerce. Significant partnerships or licensing arrangements contributing to revenue: null.

Lululemon Athletica Financial Statement Overview

Summary

Strong multi-year revenue scaling with structurally high gross margins and solid ROE, supported by manageable leverage and expanding equity. Offsetting this, the latest year shows profitability and cash-flow pressure (lower net margin, net income decline despite higher revenue, and a material drop in operating and free cash flow).

Income Statement

Revenue has scaled strongly over the last several years (from ~$4.4B in 2021 to ~$11.1B in 2026), with consistently high gross margins (~55–59%). Profitability remains solid, but the latest year shows some margin and earnings pressure: net margin fell to ~14.2% in 2026 vs ~17.1% in 2025 and net income declined despite higher revenue. Overall, strong brand-level economics and growth, tempered by recent profitability compression.

Balance Sheet

Leverage looks manageable with debt-to-equity consistently around ~0.31–0.36 and equity expanding meaningfully (from ~$2.6B in 2021 to ~$5.4B in 2026). Returns on equity are strong (roughly ~27–42% historically, ~29.5% in 2026), indicating efficient capital use. The main watchout is that returns have come off peak levels and debt has risen in absolute dollars as the business has grown.

Cash Flow

Cash generation is generally healthy, with operating cash flow and free cash flow positive each year; however, 2026 shows a notable step-down (operating cash flow down to ~$1.6B from ~$2.27B in 2025, and free cash flow down to ~$0.92B from ~$1.58B). Free cash flow also covered a smaller portion of net income in 2026 (~58% vs ~70% in 2025), pointing to weaker cash conversion and/or higher reinvestment needs. Overall cash flow remains solid, but the recent decline reduces quality and consistency.

Breakdown	TTM	Jan 2026	Jan 2025	Jan 2024	Jan 2023	Jan 2022
Income Statement
Total Revenue	11.07B	11.10B	10.59B	9.62B	8.11B	6.26B
Gross Profit	6.47B	6.28B	6.27B	5.61B	4.49B	3.61B
EBITDA	2.95B	2.21B	2.95B	2.59B	2.02B	1.60B
Net Income	1.74B	1.58B	1.81B	1.55B	854.80M	975.32M
Balance Sheet
Total Assets	7.96B	8.46B	7.60B	7.09B	5.61B	4.94B
Cash, Cash Equivalents and Short-Term Investments	1.04B	1.81B	1.98B	2.24B	1.15B	1.26B
Total Debt	1.76B	1.80B	1.58B	1.40B	1.07B	881.05M
Total Liabilities	3.45B	3.44B	3.28B	2.86B	2.46B	2.20B
Stockholders Equity	4.50B	5.35B	4.32B	4.23B	3.15B	2.74B
Cash Flow
Free Cash Flow	1.13B	921.67M	1.58B	1.64B	327.81M	994.61M
Operating Cash Flow	1.86B	1.60B	2.27B	2.30B	966.46M	1.39B
Investing Cash Flow	-712.02M	-662.12M	-798.17M	-654.13M	-569.94M	-427.89M
Financing Cash Flow	-1.26B	-1.21B	-1.65B	-548.83M	-467.49M	-844.99M

Lululemon Athletica Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 159.27
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LULU, the sentiment is Negative. The current price of 159.27 is below the 20-day moving average (MA) of 173.24, below the 50-day MA of 183.00, and below the 200-day MA of 196.34, indicating a bearish trend. The MACD of -6.44 indicates Positive momentum. The RSI at 33.08 is Neutral, neither overbought nor oversold. The STOCH value of 12.75 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for LULU.

Lululemon Athletica Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ROST	76 Outperform	$67.66B	28.12	36.25%	0.90%	3.71%	0.65%
URBN	68 Neutral	$5.86B	13.74	17.66%	―	11.09%	51.51%
ONON	66 Neutral	$13.17B	62.44	13.48%	―	38.94%	81.82%
GAP	64 Neutral	$8.87B	12.79	22.98%	2.45%	0.29%	3.65%
LULU	63 Neutral	$19.50B	13.49	38.27%	―	8.76%	3.41%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
AEO	54 Neutral	$2.97B	20.90	12.12%	2.09%	-1.15%	-0.98%

Lululemon Athletica Corporate Events

Lululemon Adds Chip Bergh to Board Amid Refresh

Lululemon Athletica announced on March 17, 2026, that former Levi Strauss & Co. president and CEO Chip Bergh has joined its board of directors as an independent director, following a March 13 board vote that temporarily expanded the board to 10 members. Bergh, who also serves on the boards of HP Inc., Pinterest, and e.l.f. Beauty and teaches at Harvard Business School, will sit on key governance and compensation committees and is expected to bolster Lululemon’s strategic capabilities in global branding and retail at a time of ongoing CEO succession planning.

Bergh will stand for election at the 2026 annual meeting in place of long-serving director and current lead director David Mussafer, who informed the company on March 13, 2026, that he will retire from the board at the end of his term, after first joining in 2005 and helping guide Lululemon’s international growth. With Mussafer’s planned departure and Bergh’s arrival, the board will revert to nine members after the annual meeting, underscoring Lululemon’s emphasis on board refreshment and governance continuity while it seeks to support long-term, sustainable growth and shareholder value.

The most recent analyst rating on (LULU) stock is a Hold with a $190.00 price target. To see the full list of analyst forecasts on Lululemon Athletica stock, see the LULU Stock Forecast page.

Lululemon Raises Q4 Outlook on Strong Holiday Demand

On January 12, 2026, Lululemon Athletica updated its outlook for the fourth quarter of fiscal 2025, saying it now expects net revenue and diluted earnings per share to come in toward the high end of its prior guidance ranges of $3.500 billion to $3.585 billion in sales and $4.66 to $4.76 in EPS. The company left guidance for gross margin, operating expenses and effective tax rate unchanged, indicating that better-than-expected performance over the holiday period is driving the improved top- and bottom-line expectations while its cost structure remains in line, which suggests resilient demand and supports its ongoing efforts to strengthen its U.S. business as it meets with investors at the ICR Conference.

The most recent analyst rating on (LULU) stock is a Hold with a $215.00 price target. To see the full list of analyst forecasts on Lululemon Athletica stock, see the LULU Stock Forecast page.

Lululemon Faces Founder-Led Board Challenge, CEO Search

On December 29, 2025, Lululemon Athletica responded to a notice from founder Dennis “Chip” Wilson, who has disclosed plans to nominate three director candidates and submit a proposal to declassify the board at the company’s 2026 annual meeting, signaling a potential proxy battle. The board stated it had long engaged with Wilson and had sought his nominees’ names earlier to avoid a costly, distracting contest, and now plans to evaluate his candidates under its governance process while emphasizing that shareholders need not take any action yet. Lululemon highlighted its board refreshment, noting that over a third of directors joined in the last four years, and underscored its decade-long growth under current oversight, with revenues rising from $2.1 billion in fiscal 2015 to an expected $11.0 billion in fiscal 2025, a near sixfold increase in operating income, and more than $5.5 billion returned to shareholders via buybacks. The company also disclosed that it has launched a search for a new CEO to lead its next phase of growth and transformation, stressing its continued industry leadership since Wilson’s departure a decade ago and its commitment to acting in the best interests of all shareholders as it prepares recommendations ahead of the 2026 annual meeting.

The most recent analyst rating on (LULU) stock is a Hold with a $215.00 price target. To see the full list of analyst forecasts on Lululemon Athletica stock, see the LULU Stock Forecast page.