Lululemon Athletica (LULU) AI Stock Analysis

• Market Cap: $22.26B
• Dividend Yield: N/A
• Average Volume (3M): 4.55M
• Price to Earnings (P/E): 12.3
• Beta (1Y): 0.96
• Revenue Growth: 9.16%
• EPS Growth: 12.74%
• Country: US
• Employees: 39,000
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Apparel - Retail
• EPS (TTM): 3.10
• Shares Outstanding: 113,468,080
• 10 Day Avg. Volume: 3,806,601
• 30 Day Avg. Volume: 4,546,950
• PEG Ratio: 1.40
• Price to Book (P/B): 11.74
• Price to Sales (P/S): 4.79
• P/FCF Ratio: 32.06
• Enterprise Value/Market Cap: 1.07
• Enterprise Value/Revenue: 3.26
• Enterprise Value/Gross Profit: 5.57
• Enterprise Value/Ebitda: 13.11
• 1Y Price Target: $195.00
• Price Target Upside: 8.35% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 25

• Rating: 71 Outperform
• Price Target: $197.00 ▲(9.46% Upside)

Lululemon Athletica's overall stock score reflects its strong financial performance and stable valuation, offset by technical analysis concerns and challenges highlighted in the earnings call. The company's international growth potential offers a positive outlook, but domestic market pressures and strategic execution risks need careful monitoring.

Positive Factors

International Expansion

Lululemon's strong growth in China and plans for further international store openings highlight its effective global expansion strategy, which diversifies revenue streams and reduces reliance on the U.S. market.

Membership Program Growth

The expanding membership base indicates strong brand loyalty and customer engagement, which can lead to increased sales and sustained revenue growth through repeat purchases and community building.

Performance Apparel Market Share

Lululemon's ability to gain market share in performance apparel, despite sector declines, underscores its competitive advantage in product innovation and brand strength, supporting long-term growth.

Negative Factors

U.S. Revenue Decline

The decline in U.S. revenue reflects challenges in the domestic market, potentially impacting overall financial performance and necessitating strategic adjustments to regain growth.

Impact of Tariffs

Increased tariffs and the removal of the de minimis provision pose a structural challenge, pressuring margins and requiring cost management strategies to protect profitability.

Inventory Management Issues

Rising inventory levels suggest potential inefficiencies and increased markdown risks, which could affect cash flow and necessitate improved supply chain management.

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 generates revenue primarily through the sale of its apparel and accessories, both in physical retail stores and online. The company operates a direct-to-consumer (DTC) model that allows it to maintain higher margins compared to traditional wholesale distribution. Key revenue streams include sales from its flagship stores, e-commerce platform, and outlet locations. Furthermore, Lululemon benefits from a loyal customer base and a strong brand identity, which drive repeat purchases. The company also engages in community-building initiatives, such as local fitness events and partnerships with yoga instructors and gyms, which enhance brand loyalty and customer engagement. Additionally, Lululemon has expanded its product lines and introduced collaborations, such as special collections, that help diversify its offerings and attract new customers.

Lululemon Athletica Financial Statement Overview

Summary

Lululemon Athletica shows strong financial performance with high profitability margins and efficient operations. The balance sheet is stable with prudent leverage, and the company demonstrates high returns on equity. However, the decline in free cash flow growth is a concern that needs monitoring.

Income Statement

Lululemon Athletica demonstrates strong financial performance with consistent revenue growth and solid profitability margins. The TTM data shows a Gross Profit Margin of 59.10% and a Net Profit Margin of 16.38%, indicating efficient cost management and profitability. The Revenue Growth Rate of 1.43% in the TTM suggests steady growth, although slightly slower compared to previous periods. Overall, the company maintains robust EBIT and EBITDA margins, reflecting operational efficiency.

Balance Sheet

The balance sheet reflects a stable financial position with a manageable Debt-to-Equity Ratio of 0.40 in the TTM, indicating prudent leverage. The Return on Equity (ROE) is impressive at 42.05%, showcasing effective utilization of shareholder funds to generate profits. The Equity Ratio stands at 58.29%, suggesting a strong equity base relative to total assets, which enhances financial stability.

Cash Flow

Cash flow analysis reveals a mixed picture. While the Operating Cash Flow to Net Income Ratio is healthy at 1.23, indicating strong cash generation relative to net income, the Free Cash Flow Growth Rate shows a decline of 11.20% in the TTM. This suggests potential challenges in maintaining free cash flow levels, although the Free Cash Flow to Net Income Ratio remains solid at 0.61, indicating reasonable cash flow coverage of earnings.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	7.29B	10.59B	9.62B	8.11B	6.26B	4.40B
Gross Profit	4.26B	6.27B	5.61B	4.49B	3.61B	2.46B
EBITDA	1.81B	2.95B	2.59B	2.02B	1.60B	1.04B
Net Income	1.04B	1.81B	1.55B	854.80M	975.32M	588.91M
Balance Sheet
Total Assets	7.52B	7.60B	7.09B	5.61B	4.94B	4.19B
Cash, Cash Equivalents and Short-Term Investments	1.16B	1.98B	2.24B	1.15B	1.26B	1.15B
Total Debt	1.76B	1.58B	1.40B	1.07B	881.05M	798.68M
Total Liabilities	3.14B	3.28B	2.86B	2.46B	2.20B	1.63B
Stockholders Equity	4.39B	4.32B	4.23B	3.15B	2.74B	2.56B
Cash Flow
Free Cash Flow	1.74M	1.58B	1.64B	327.81M	994.61M	574.11M
Operating Cash Flow	510.38M	2.27B	2.30B	966.46M	1.39B	803.34M
Investing Cash Flow	-628.55M	-798.17M	-654.13M	-569.94M	-427.89M	-695.53M
Financing Cash Flow	-1.16B	-1.65B	-548.83M	-467.49M	-844.99M	-80.79M

Lululemon Athletica Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 179.98
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LULU, the sentiment is Positive. The current price of 179.98 is above the 20-day moving average (MA) of 174.16, above the 50-day MA of 179.10, and below the 200-day MA of 265.35, indicating a neutral trend. The MACD of 0.32 indicates Negative momentum. The RSI at 55.06 is Neutral, neither overbought nor oversold. The STOCH value of 75.82 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for LULU.

Lululemon Athletica Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
URBN	―	$6.03B	13.15	19.72%	―	9.63%	56.06%
ONON	―	$13.62B	90.42	9.66%	―	39.16%	-14.16%
ROST	―	$50.98B	24.89	37.98%	0.98%	1.92%	1.50%
LULU	―	$22.26B	12.32	42.42%	―	9.16%	12.74%
GAP	―	$9.05B	10.48	28.07%	2.65%	-0.05%	15.17%
AEO	―	$2.81B	15.95	12.17%	2.96%	-2.73%	-16.71%
Sector *	―	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%

Lululemon Athletica Corporate Events

Lululemon Updates Credit Agreement for Financial Flexibility

On October 15, 2025, Lululemon Athletica announced entering into the Second Amended and Restated Credit Agreement. This development is expected to impact the company’s financial strategy and operations, potentially enhancing its market position and providing greater financial flexibility.

The most recent analyst rating on (LULU) stock is a Hold with a $146.00 price target. To see the full list of analyst forecasts on Lululemon Athletica stock, see the LULU Stock Forecast page.

Lululemon’s Global Supply Chain at Risk Amid Political and Economic Turmoil

Lululemon Athletica faces significant risks due to global political and economic instability, which could disrupt their operations and increase costs. The company’s reliance on a global supply chain makes it vulnerable to trade disputes, changes in customs regulations, and governmental actions such as sanctions and embargoes. Compliance with legislation like the Uyghur Forced Labor Prevention Act adds further complexity, increasing due diligence requirements and the risk of shipment delays. Should additional trade restrictions or compliance requirements arise, Lululemon’s sourcing and distribution strategies could be severely impacted, leading to higher operational costs and potential disruptions.

Lululemon’s Earnings Call: Growth Amid Challenges

Lululemon Athletica’s recent earnings call painted a mixed picture, with international growth and robust performance in the apparel segment being overshadowed by significant challenges in the U.S. market. The company is grappling with revenue guidance reductions and adverse impacts from tariffs, while efforts to revitalize product assortments are still in progress. Inventory issues and increased markdown pressures further compound the challenges faced by the company.

Lululemon Reports Mixed Q2 Results Amid U.S. Challenges

Lululemon Athletica Inc. is a technical athletic apparel, footwear, and accessories company known for its innovative fabrics and functional designs, catering to activities like yoga, running, and training. In its second quarter of fiscal 2025, Lululemon reported a 7% increase in revenue, reaching $2.5 billion, although it faced challenges in the U.S. market. The company’s diluted earnings per share were $3.10, slightly down from $3.15 in the previous year. Key financial highlights include a 22% increase in international net revenue and a 1% rise in comparable sales. However, the Americas saw a 4% decrease in comparable sales. Lululemon’s gross profit increased by 5% to $1.5 billion, but its gross margin declined by 110 basis points to 58.5%. The company added 14 new stores, bringing the total to 784. Looking ahead, Lululemon remains optimistic about its long-term growth potential, despite revising its full-year outlook due to industry challenges and higher tariff rates. The company plans to continue investing strategically while maintaining financial discipline.

Lululemon Reports Q2 2025 Revenue Growth Amid U.S. Challenges

Lululemon Athletica Inc. reported a 7% increase in revenue to $2.5 billion for the second quarter of fiscal 2025, with comparable sales rising by 1% and a diluted EPS of $3.10. Despite positive momentum in international markets, the company expressed disappointment with its U.S. business results and certain aspects of product execution, indicating a need for strategic reassessment in these areas.

The most recent analyst rating on (LULU) stock is a Buy with a $324.00 price target. To see the full list of analyst forecasts on Lululemon Athletica stock, see the LULU Stock Forecast page.