Lululemon Athletica (LULU) AI Stock Analysis

• Market Cap: $25.31B
• Dividend Yield: N/A
• Average Volume (3M): 3.36M
• Price to Earnings (P/E): 13.8
• Beta (1Y): 0.90
• Revenue Growth: 9.39%
• EPS Growth: 17.28%
• Country: US
• Employees: 39,000
• Sector: Consumer Cyclical
• Sector Strength: 80
• Industry: Apparel - Retail
• EPS (TTM): 2.60
• Shares Outstanding: 114,729,430
• 10 Day Avg. Volume: 3,751,746
• 30 Day Avg. Volume: 3,359,970
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.34
• Enterprise Value/Revenue: 3.15
• Enterprise Value/Gross Profit: 5.31
• Enterprise Value/Ebitda: 11.79
• 1Y Price Target: $271.20
• Price Target Upside: 31.93% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 25

• Rating: 72 Outperform
• Price Target: $226.00 ▲(9.94% Upside)

Lululemon Athletica's strong financial performance and strategic international growth initiatives are key strengths. However, technical indicators suggest bearish momentum, and challenges in the US market and tariff impacts weigh on the outlook. The company's valuation is reasonable, supporting a balanced investment perspective.

Positive Factors

Growth Opportunity

The stock's selloff presents a particularly good opportunity to own a strong growth company with high margins.

Revenue and EPS Guidance

Lululemon is expected to meet the high end of both revenue and EPS guidance, with projected revenue growth of 8%.

Sales Growth

The company anticipates a high-single-digit increase in brick-and-mortar sales and a midsingle-digit increase in e-commerce.

Negative Factors

Americas Business Performance

LULU’s Americas business remains challenged by weak traffic/category trends, which is driving higher markdowns.

Market Sentiment

Sentiment on LULU skews negative, with investors expecting another cut to F25 guidance this quarter.

Tariff Impact

Management is expected to lower F25 EPS guidance driven by higher tariffs.

Lululemon Athletica Business Overview & Revenue Model

Company Description

Lululemon Athletica (LULU) is a leading athletic apparel company specializing in high-quality yoga, running, and workout clothing for both men and women. Founded in 1998 in Vancouver, Canada, the company has expanded its product offerings to include a range of accessories and lifestyle apparel. Lululemon’s commitment to quality, innovation, and community engagement has positioned it as a premium brand in the athleisure market, appealing to a health-conscious consumer base seeking both performance and style.

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 demonstrates strong financial performance with robust revenue growth, high profitability, and a solid balance sheet. The company maintains high gross profit margins and impressive return on equity, reflecting efficient operations and effective utilization of shareholders' funds.

Income Statement

Lululemon Athletica demonstrates strong financial performance with robust revenue growth over the years, particularly from $4.40 billion in 2021 to $10.75 billion TTM (Trailing-Twelve-Months) in 2025. The company maintains high gross profit margins consistently above 50%, reaching approximately 59.4% in TTM. Net profit margins have also been solid, around 16.8% TTM, indicating strong profitability. EBIT and EBITDA margins are healthy, reflecting efficient operations.

Balance Sheet

The balance sheet reflects a strong equity base with a debt-to-equity ratio of approximately 0.40 TTM, showcasing prudent leverage management. The equity ratio is around 63.9% TTM, indicating a stable financial structure. Return on equity is impressive at 42.1% TTM, reflecting effective utilization of shareholders' funds. The company has been able to manage its liabilities while growing its equity.

Cash Flow

Lululemon Athletica exhibits robust cash flow generation with consistent growth in free cash flow, demonstrating financial health and operational efficiency. The operating cash flow to net income ratio is strong, indicating effective conversion of net income to cash. The free cash flow to net income ratio also supports the company's ability to generate cash from operations. Free cash flow growth has been positive, reinforcing the company's capacity for reinvestment and returning value to shareholders.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	10.75B	10.59B	9.62B	8.11B	6.26B	4.40B
Gross Profit	6.38B	6.27B	5.61B	4.49B	3.61B	2.46B
EBITDA	2.88B	3.02B	2.59B	2.02B	1.60B	1.00B
Net Income	1.81B	1.81B	1.55B	854.80M	975.32M	588.91M
Balance Sheet
Total Assets	7.43B	7.60B	7.09B	5.61B	4.94B	4.19B
Cash, Cash Equivalents and Short-Term Investments	1.33B	1.98B	2.24B	1.15B	1.26B	1.15B
Total Debt	1.71B	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	4.29B	4.32B	4.23B	3.15B	2.74B	2.56B
Cash Flow
Free Cash Flow	1.32B	1.58B	1.64B	327.81M	994.61M	574.11M
Operating Cash Flow	2.03B	2.27B	2.30B	966.46M	1.39B	803.34M
Investing Cash Flow	-773.48M	-798.17M	-654.13M	-569.94M	-427.89M	-695.53M
Financing Cash Flow	-1.79B	-1.65B	-548.83M	-467.49M	-844.99M	-80.79M

Lululemon Athletica Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 205.57
• 50DMA: Negative
• 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 Neutral. The current price of 205.57 is above the 20-day moving average (MA) of 197.58, below the 50-day MA of 217.00, and below the 200-day MA of 304.46, indicating a neutral trend. The MACD of -4.53 indicates Negative momentum. The RSI at 49.04 is Neutral, neither overbought nor oversold. The STOCH value of 69.55 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for LULU.

Lululemon Athletica Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ROST	75 Outperform	$48.51B	23.43	37.98%	1.03%	1.92%	1.50%
URBN	75 Outperform	$6.84B	15.98	19.55%	―	8.38%	52.18%
AEO	74 Outperform	$2.11B	12.79	12.19%	3.78%	-0.95%	-10.51%
LULU	72 Outperform	$25.31B	13.82	42.49%	―	9.39%	17.28%
GAP	72 Outperform	$8.05B	9.37	29.16%	2.83%	1.07%	28.03%
ONON	69 Neutral	$14.58B	96.79	9.66%	―	39.16%	-14.16%
Sector *	61 Neutral	$17.75B	12.56	-5.49%	3.02%	1.43%	-14.12%

Lululemon Athletica Corporate Events

Lululemon Elects Directors and Ratifies Auditor

At Lululemon Athletica‘s 2025 Annual Meeting of Shareholders on June 11, 2025, several key decisions were made. Three Class III directors were elected, PricewaterhouseCoopers LLP was ratified as the independent public accounting firm for the fiscal year ending February 1, 2026, and executive compensation was approved. However, a shareholder proposal regarding a report on discrimination risks related to charitable partnerships was not approved.