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Lululemon Athletica Inc. (LULU), based in Vancouver, Canada, is a lifestyle-inspired athletic apparel company specializing in yoga, running, training, and other active pursuits. With a market cap of $23.7 billion, Lululemon is renowned for the comfort of its clothing and its ability to create transformative products and experiences.
The LULU stock has significantly underperformed the broader market over the past year. LULU has plunged nearly 24% over the past 52 weeks and 48.2% on a YTD basis, compared to the S&P 500 Index’s ($SPX) 14.3% gains over the past year and 8.7% returns in 2025.
Narrowing the focus, LULU stock has also underperformed the sector-focused Consumer Discretionary Select Sector SPDR Fund’s (XLY) 22.9% surge over the past 52 weeks and 1.4% uptick in 2025.
Lululemon Athletica’s stock prices plummeted 19.8% in the trading session following the release of its lackluster Q2 results on Jun. 5 and maintained a negative price trajectory for the five subsequent trading sessions. The company’s performance in international markets remained solid, but its comparable sales in the Americas dropped by 2% and net sales dipped 3%. Overall, its topline for the quarter came in at $2.4 billion, up 7.3% year-over-year, missing several estimates. Further, the company observed a significant 11.9% jump in SG&A expenses to $942.9 million, which hurt its margins. Alongside, Lululemon’s inventory at the end of Q2 stood at $1.7 billion, up 22.8% year-over-year. This is especially concerning as the company hasn’t been able to move inventory despite incurring higher selling expenses.
Meanwhile, driven by the impact of share repurchases, Lululemon’s EPS inched up 2.4% year-over-year to $2.60, surpassing the consensus estimates by a marginal 39 bps.
For the full fiscal 2025, ending in January 2026, analysts expect LULU to report an EPS of $14.35, down 2% year-over-year. On the positive note, the company has a robust earnings surprise history. It has surpassed the Street’s bottom-line estimates in each of the past four quarters.
The stock has a consensus “Moderate Buy” rating overall. Of the 31 analysts covering the stock, opinions include 13 “Strong Buys,” one “Moderate Buy,” 13 “Holds,” two “Moderate Sells,” and two “Strong Sells.”
This configuration is slightly less optimistic than a month ago, when 14 analysts gave “Strong Buy” recommendations.
On Aug. 11, Baird analyst Mark Altschwager maintained an “Outperform” rating on LULU, but lowered the price target from $340 to $260.
As of writing, LULU’s mean price target of $289.72 represents a 46.2% premium to current price levels. Meanwhile, the street-high target of $500 suggests a staggering 152.4% upside potential.
