Lululemon stock tumbled Friday after the athleisure retailer cut its 2025 earnings guidance. A number of analysts slashed price targets on results, but abstained from full downgrades.
Lululemon reported Q1 earnings of $2.60 per share, up from $2.54 per share last year. Revenue increased 7% to $2.37 billion.
Analysts polled by FactSet expected earnings of $2.58 per share on $2.36 billion in revenue.
Comparable sales climbed 1%, well below analyst views for 4.1% growth.
Same-store sales for the Americas declined 2%. International comparable sales increased 6% for the quarter.
Inventories increased 23% to $1.7 billion at the end of the period.
For the second quarter, Lululemon trimmed its earnings guidance to between $2.85 per share and $2.90 per share. The company forecasts Q2 revenue to range from $2.535 billion to $2.56 billion.
The outlook was below FactSet views for Q2. Analysts anticipate second-quarter revenues of $2.94 per share on $2.549 billion in sales.
The retailer lowered its 2025 earnings guidance to range from $14.58 to $14.78 per share, down from its prior forecast for $14.95 to $15.15 per share. Full-year sales are expected to range from $11.15 billion to $11.3 billion.
Analysts polled by FactSet expect full-year earnings of $14.70 per share on $11.23 billion in revenue.
Analysts Cut Targets, Keep Ratings
A slew of analysts cut their price targets on Lululemon stock after results, but the company avoided any actual downgrades.
TD Cowen slashed its price target on LULU by 52, but kept a buy rating on shares, The Fly reported. The firm noted that tariffs and macroeconomic uncertainty continue to harm earnings.
Needham on Friday cut its target on LULU to 317 from 366 but maintained a buy rating on the shares. The firm said that the sell-off seems "aggressive" relative to the size of Lululemon's cut forecast, particularly since it was driven by tariffs. The company's domestic business remains sluggish, Needham said. However, international comparative sales growth slowed during the quarter, which raises questions about growth potential.
BMO Capital cut its price target by 52 to 250, noting that it was the first time Lululemon lowered its full-year earnings forecast in Q1 since 2014. The firm kept a market perform rating on the shares.
BofA, BTIG, Baird and Deutsche Bank also cut their price targets on Lululemon shares.
Lululemon Stock
LULU stock tumbled 19.8% Friday on results. That dropped shares to well below their 50-day line and other key moving averages.
Lululemon stock is down 30.6% in 2025. It has a 21-day average true range ratio of 3.07%.
The average true range is a metric available on IBD's MarketSurge that gauges the characteristic breadth of a stock's behavior. Stocks that tend to make large jumps or dives in daily action, the kind that can trigger sell rules and shake investors out of a stock, have a high ATR. Stocks that tend to make more incremental moves have lower ATRs.
With the S&P 500 and Nasdaq now in a power trend, investors can buy stocks with ATRs up to 8%, though they should be wary of being too concentrated in high-octane names.
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