Lululemon Athletica (LULU)
NASDAQ:LULU
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Lululemon Athletica
(NASDAQ:LULU)
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Rating:69Neutral
Price Target:
$130.00
▼(-22.29% Downside)
Action:Reiterated
Date:04/29/26
The score is driven primarily by solid underlying financial strength (growth, high gross margins, strong ROE) tempered by recent cash flow/profitability deterioration. Technicals are a meaningful headwind given the clear downtrend and weak momentum. Valuation is supportive at a modest P/E, while earnings-call guidance and corporate updates indicate near-term margin/EPS pressure despite strong international and digital highlights.
Positive Factors
High gross margins and multi-year revenue scale
Lululemon’s premium brand and product economics have driven durable revenue scaling and structurally high gross margins. Strong margin structure supports cash generation and reinvestment capacity, helping sustain merchandising, innovation and retail economics through business cycles.
Negative Factors
Material gross margin compression
Significant tariff and markdown-driven margin erosion is a structural threat to profitability if sustained. Higher product cost pass-through limits pricing power and forces either margin sacrifice or more aggressive marketing/discounting, undermining long-term operating margins and ROIC.
Read all positive and negative factors
Positive Factors
Negative Factors
High gross margins and multi-year revenue scale
Lululemon’s premium brand and product economics have driven durable revenue scaling and structurally high gross margins. Strong margin structure supports cash generation and reinvestment capacity, helping sustain merchandising, innovation and retail economics through business cycles.
Read all positive factors
Lululemon Athletica Key Performance Indicators (KPIs)
Any
Revenue by Channel
Revenue distribution across various sales and distribution channels
Revenue distribution across various sales and distribution channels
Data provided by:
The Fly
The FlyLululemon Athletica (LULU) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$14.97B
Dividend YieldN/A
Average Volume (3M)3.03M
Price to Earnings (P/E)9.1
Beta (1Y)1.11
Revenue Growth4.86%
EPS Growth-8.97%
CountryUS
Employees39,000
SectorConsumer Cyclical
Sector Strength84
IndustryApparel - Retail
Share Statistics
EPS (TTM)13.27
Shares Outstanding109,318,985
10 Day Avg. Volume3,107,289
30 Day Avg. Volume3,025,764
Financial Highlights & Ratios
PEG Ratio-1.41
Price to Book (P/B)4.29
Price to Sales (P/S)1.92
P/FCF Ratio23.12
Enterprise Value/Market Cap1.00
Enterprise Value/Revenue1.35
Enterprise Value/Gross Profit2.38
Enterprise Value/Ebitda5.50
Forecast
1Y Price Target
$177.13Price Target Upside5.89% Upside
Rating ConsensusHold
Number of Analyst Covering21
EPS Forecast (FY)12.34
Revenue Forecast (FY)$11.47B
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, ...
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 generat...
Lululemon Athletica Earnings Call Summary
Earnings Call Date:Mar 17, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 28, 2026
Earnings Call Sentiment Neutral
The call presents a balanced picture: clear progress and strategic initiatives (product innovation, international strength, digital growth, store productivity, share repurchases and an actionable enterprise enablement plan) are offset by significant near-term headwinds (large gross margin compression driven by tariffs and markdowns, SG&A deleverage, guidance for modest revenue growth and lower EPS, and expected North America softness). Management outlines a credible multi-pronged plan and early green shoots in product and activations, but the company is guiding through a transitional year with meaningful margin and earnings pressure in 2026.Positive Updates
Revenue Growth and Comparable Sales
Total net revenue for Q4 rose 1% to $3.6 billion; excluding the 53rd week, net revenue rose 6% (4% in constant currency) and comparable sales increased 2%.
Negative Updates
Sharp Gross Margin Compression
Gross margin declined to 54.9% in Q4 from 60.4% a year ago, a 550 basis point decline driven primarily by a 560 basis point fall in product margin due to tariffs and higher markdowns; tariffs had a gross negative impact of ~520 basis points and markdowns increased ~130 basis points.
Read all updates
Q4-2025 Updates
Positive
Negative
Revenue Growth and Comparable Sales
Total net revenue for Q4 rose 1% to $3.6 billion; excluding the 53rd week, net revenue rose 6% (4% in constant currency) and comparable sales increased 2%.
Read all positive updates
Company Guidance
lululemon guided fiscal 2026 revenue of $11.35–$11.50 billion (growth of 2–4% vs. 2025) with North America down 1–3% (U.S. down 1–3%), China Mainland up ~20% (Q1 China expected +25–30%), and Rest of World growth in the mid‑teens; Q1 revenue is guided to $2.40–$2.43 billion (1–3% y/y) with North America down mid‑single digits and ~6 net new stores/6 optimizations. The company expects to open ~40–45 net new company‑operated stores in 2026 (≈15 in North America including ~8 in Mexico; 25–30 international, majority in China), complete ~35 optimizations, and drive low‑double‑digit square footage growth. Gross margin is forecast to decline ~120 basis points for the year (Q1 ≈‑380 bps), with tariff headwinds (management cited ~$380M gross tariff impact in 2026 with ≈$160M of offsets; FY tariff impact ~90 bps that management expects to largely offset) and markdowns expected to improve modestly (Q1 markdowns ~+30 bps, with improvement mainly in H2). SG&A is expected to deleverage ~130 bps for the year (Q1 deleverage ~330 bps), operating margin to decline ~250 bps for the year (Q1 ~‑710 bps), and FY diluted EPS to be $12.10–$12.30 (vs. $13.26 in 2025) with Q1 EPS $1.63–$1.68 (vs. $2.60); effective tax rate ~30% for the year (~31.5% in Q1). Capital expenditures are expected to be $725–$745 million (~6% of revenue), inventory dollar growth is guided to mid‑ to high‑single digits with units flat to slightly down, the company exited Q4 with ~$1.8 billion cash and ~ $600 million of revolver capacity, and ~ $1.2 billion remains on the share‑repurchase authorization (repurchases in 2025 totaled about $1.2 billion; 2026 repurchase cadence expected to be similar).Lululemon Athletica Financial Statement Overview
Summary
Income Statement
82
Very Positive
Balance Sheet
78
Positive
Cash Flow
70
Positive
| Breakdown | Jan 2026 | Jan 2025 | Jan 2024 | Jan 2023 | Jan 2022 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 11.10B | 10.59B | 9.62B | 8.11B | 6.26B |
| Gross Profit | 6.28B | 6.27B | 5.61B | 4.49B | 3.61B |
| EBITDA | 2.74B | 2.95B | 2.59B | 2.02B | 1.60B |
| Net Income | 1.58B | 1.81B | 1.55B | 854.80M | 975.32M |
Balance Sheet | |||||
| Total Assets | 8.46B | 7.60B | 7.09B | 5.61B | 4.94B |
| Cash, Cash Equivalents and Short-Term Investments | 1.81B | 1.98B | 2.24B | 1.15B | 1.26B |
| Total Debt | 1.80B | 1.58B | 1.40B | 1.07B | 881.05M |
| Total Liabilities | 3.49B | 3.28B | 2.86B | 2.46B | 2.20B |
| Stockholders Equity | 4.96B | 4.32B | 4.23B | 3.15B | 2.74B |
Cash Flow | |||||
| Free Cash Flow | 921.67M | 1.58B | 1.64B | 327.81M | 994.61M |
| Operating Cash Flow | 1.60B | 2.27B | 2.30B | 966.46M | 1.39B |
| Investing Cash Flow | -662.12M | -798.17M | -654.13M | -569.94M | -427.89M |
| Financing Cash Flow | -1.21B | -1.65B | -548.83M | -467.49M | -844.99M |
Lululemon Athletica Technical Analysis
Negative
167.28
Price Trends
148.33
Negative
168.19
Negative
174.97
Negative
Market Momentum
-9.03
Positive
36.31
Neutral
22.69
Neutral
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 167.28 is above the 20-day moving average (MA) of 130.89, above the 50-day MA of 148.33, and below the 200-day MA of 174.97, indicating a bearish trend. The MACD of -9.03 indicates Positive momentum. The RSI at 36.31 is Neutral, neither overbought nor oversold. The STOCH value of 22.69 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for LULU.
Lululemon Athletica Risk Analysis
Lululemon Athletica disclosed 38 risk factors in its most recent earnings report. Lululemon Athletica reported the most risks in the "Production" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Lululemon Athletica Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $70.16B | 23.35 | 36.70% | 0.90% | 7.67% | 4.66% | |
74 Outperform | $6.14B | 16.50 | 17.66% | ― | 11.07% | 18.69% | |
73 Outperform | $12.53B | 21.34 | 15.91% | ― | 36.00% | 32.77% | |
69 Neutral | $14.97B | 9.08 | 34.82% | ― | 4.86% | -8.97% | |
63 Neutral | $8.15B | 15.26 | 22.98% | 2.45% | 1.86% | -2.54% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
54 Neutral | $2.75B | 11.22 | 12.12% | 2.09% | 3.16% | -32.51% |
* Consumer Cyclical Sector Average
LULU
Lululemon Athletica
125.19
-195.27
-60.93%
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217.79
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URBN
Urban Outfitters
71.67
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ONON
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37.85
-20.97
-35.65%
Lululemon Athletica Corporate Events
Business Operations and StrategyExecutive/Board Changes
Lululemon Adds Veteran Executive to Refreshing Board
Positive
Apr 28, 2026
On April 26, 2026, lululemon athletica’s board appointed veteran consumer and beauty executive Esi Eggleston Bracey as an independent director, effective April 28, 2026, expanding the board to 11 members until the 2026 annual meeting. Her th...
Business Operations and StrategyExecutive/Board Changes
Lululemon Names Heidi O’Neill as New CEO
Positive
Apr 22, 2026
Lululemon Athletica announced on April 22, 2026 that its board unanimously approved the appointment of industry veteran Heidi O’Neill as chief executive officer and board member, effective September 8, 2026, following a comprehensive search....
Business Operations and StrategyExecutive/Board ChangesShareholder Meetings
Lululemon Adds Chip Bergh to Board Amid Refresh
Positive
Mar 17, 2026
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 mem...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.