New Product Lines And Store Expansion Will Fuel Global Momentum

Analysts have modestly reduced their fair value target for lululemon athletica to $276.45 amid concerns over U.S. sales softness, higher tariffs, and increased competition, partially offset by optimism regarding new product launches and resilient brand strength.

Analyst Commentary

• Bullish analysts see Lululemon’s recent stock selloff and historically low valuation as an attractive opportunity to own a strong growth company with high margins, contingent on successful execution of sales growth targets and new product rollouts.
• Bearish analysts highlight mounting challenges in the U.S., including soft in-store traffic, rising competition, increased markdowns, and inventory growth outpacing sales, raising concerns about U.S. sales and EPS declines.
• The expiration of the de minimis duty exemption is viewed as a material earnings headwind, with analysts anticipating a cut in guidance and increased risk to future earnings estimates.
• Several analysts lowered price targets due to a tougher macroeconomic environment, slowing international growth, pressures in merchandising outside core categories, and the need for international comp acceleration.
• Despite recent guidance cuts—primarily related to tariffs and macro factors—some analysts remain encouraged by consumer response to newness, strong product launches, and Lululemon’s continued premium positioning and ability to selectively raise prices.

What's in the News

• Lululemon athletica plans to cut approximately 150 corporate jobs as part of organizational structure changes, impacting staff at its store support centers (The Canadian Press).
• The company is expanding internationally with the launch of its first store in Italy, opening in Milan on July 19, 2025, featuring a locally inspired design and integrated omni-channel capabilities (Key Developments).
• Lululemon has undergone significant index reclassifications, being added to multiple Russell value and midcap indexes while being dropped from the Russell Top 200 Growth Index, signaling a shift in investor perception from pure growth to value (Key Developments).
• The company completed a share buyback of 1.56 million shares ($486 million) between February and May 2025, bringing the total repurchased shares to approximately 5% of outstanding shares under the current program (Key Developments).
• Lululemon reaffirmed 2025 guidance with expected net revenue of $11.15–$11.3 billion (5–7% growth) and EPS of $14.58–$14.78, with Q2 revenue expected to grow 7–8% and EPS of $2.85–$2.90 (Key Developments).

Valuation Changes

Summary of Valuation Changes for lululemon athletica

• The Consensus Analyst Price Target remained effectively unchanged, moving only marginally from $280.68 to $276.45.
• The Future P/E for lululemon athletica remained effectively unchanged, moving only marginally from 20.02x to 19.71x.
• The Consensus Revenue Growth forecasts for lululemon athletica remained effectively unchanged, at 6.4% per annum.