Product Refresh And Global Expansion Will Empower Future Market Leadership

Lululemon's consensus price target was revised down to $202.60 as analysts cite weakening U.S. sales, stale product issues, heightened competition, earnings and guidance cuts, and new tariff pressures weighing on profit outlook.

Analyst Commentary

• Ongoing weakness in Lululemon’s U.S. business, with negative sales growth for the first time in years, persistent execution issues, and difficulty reigniting brand momentum amid intensifying domestic competition.
• Product assortment challenges deemed “stale” by multiple analysts, with efforts to drive U.S. recovery struggling to gain traction and few new catalysts expected in the near term.
• Significant earnings outlook cuts for fiscal 2025-2026 driven by recent earnings misses, lowered guidance, and a multiyear operating model revamp to address soft topline trends and deteriorating key performance indicators.
• Major downside from the end of the de minimis tariff exemption and new tariff impacts, causing EPS estimates to be revised sharply lower across the Street and adding further risk to medium-term profitability.
• Bearish analysts cite macroeconomic uncertainty, softer store traffic, rising discounting activity, and a highly competitive athleticwear landscape as reasons for valuation compressions, while some bullish analysts still view long-term value if Lululemon successfully executes a turnaround.

What's in the News

• Lululemon revised its 2025 full-year guidance downward, now expecting net revenue of $10.85–$11.00 billion (2%–4% growth) and EPS of $12.77–$12.97, citing a ~$240 million gross profit reduction from higher U.S. tariffs and regulatory changes despite mitigation efforts (Key Developments).
• Q3 2025 guidance projects net revenue of $2.47–$2.50 billion (3%–4% growth) and diluted EPS of $2.18–$2.23, assuming a 30% effective tax rate (Key Developments).
• Citi lowered its Lululemon price target from $270 to $220, maintaining a Neutral rating and forecasting a small Q2 earnings beat but warning of further guidance cuts due to pressure from higher tariffs (Periodicals).
• The company completed a share buyback tranche, repurchasing 1.53 million shares for $349 million from May to August 2025, and has now bought back 6.15% of its outstanding shares since December 2023 (Key Developments).
• Lululemon is expanding internationally with its first Italy store opening in Milan, while undergoing organizational changes including ~150 corporate job cuts; also notable, the stock was added to multiple Russell Value and Midcap indices and dropped from some Growth indices (Periodicals, Key Developments).

Valuation Changes

Summary of Valuation Changes for lululemon athletica

• The Consensus Analyst Price Target remained effectively unchanged, moving only marginally from $206.17 to $202.60.
• The Consensus Revenue Growth forecasts for lululemon athletica has fallen slightly from 5.4% per annum to 5.2% per annum.
• The Future P/E for lululemon athletica remained effectively unchanged, moving only marginally from 14.87x to 14.61x.